--- title: VAT liability changes from 1 January 2018 date: 2017-11-16T09:04:06Z modified: 2023-03-01T10:59:29Z permalink: &quot;https://grow.ee/kaibemaksukohustus-muutub-2018-aasta-1-jaanuarist/&quot; type: post status: publish excerpt: In July 2016, the Government of the Republic approved an amendment to the law on VAT liability, which will simplify the activities of small businesses from 1 January 2018. wpid: 4786 timestamp: 2023-03-01T10:59:29Z tags: - Accounting --- In July 2016, the Government of the Republic approved an amendment to the law on VAT liability, which will **simplify the activities of small businesses** from 1 January 2018. Considering the rapid changes in the economy, this is an expected step – the previously valid VAT obligation of 16,000 euros was written into law back in 1995! But all&#039;s well that ends well and once again another step has been taken towards less bureaucracy. ## VAT obligation in 2018 – what will change? According to the change that will come into effect on January 1st of next year, companies whose annual turnover does not exceed 40,000 euros do not have to pay VAT (currently this limit is 16,000). At the same time, these companies will continue to be able to pay VAT if they wish. However, it must be noted that **not all companies will benefit from this**. Since the right to deduct input VAT plays an important role in the activities of many companies, such companies are not affected by the new law. However, it is worth bearing in mind that this is not the only [change that will come into effect soon](/?p=4663) and there are still legal changes that may affect the activities of companies. But which companies will benefit the most? Companies that sell goods/services to end consumers and companies whose service is the result of their own work (including intellectual work) will be particularly happy about this. **One benefit for small businesses is in the area of documents**. Companies that are not liable for VAT do not have to - keep VAT records; - submit declarations; - pay/claim VAT. ## How many companies will the change in law affect? The increase in the VAT liability rate affects small businesses whose previous annual turnover was between 16,001 and 40,000 euros. This means that as a result of the change, **approximately 3,000 current VAT taxpayers** may be added to the companies that are already not required to pay VAT. ## How to stay up to date with all the changes? Keeping up with constantly changing laws and requirements can be time-consuming and expensive. Therefore, it is often more practical to [buy in accounting services](https://grow.ee/wp-content/uploads/wp-mfa-exports/page/raamatupidamisteenus.md) for a company. The specialists of the accounting firm Grow are **always up to date with all the latest regulations** and our services may be needed by anyone, regardless of the size of the company and whether the company is VAT registered or not. If you would like to familiarize yourself with our services or receive a consultation regarding your company&#039;s activities, please contact us at <info@grow.ee> või telefonil 5629 3090