Preparation and creating of invoices

An invoice is a document, which confirms the execution of a business transaction – the sale of goods or the provision of services. Persons required to maintain accounting (enterprises and self-employed persons) are obliged to document their transactions and issue invoices. It is also important for legal persons to receive invoices to prove purchases made. An invoice has to be issued for sold goods or for a provided service within seven calendar days since the day when the goods were sent to the purchaser or when they were made available or the service was provided.

An invoice in Estonia must include data as follows:
1) name and number of the document;
2) date of compilation;
3) business content of the transaction;
4) numbers of the transaction (quantity, price, sum);
5) names of the transaction parties;
6) addresses of parties’ locations and residences;

The person required to maintain accounting has to mark in the invoice in addition:
7) the signature/signatures of the person representing the person required to maintain accounting, which confirms that the business transaction has taken place;
8) the corresponding number of the accounting record.

An enterprise or self-employed person is obliged to register as a person liable to VAT, when the turnover exceeds the limit of 40 000 EUR as of the beginning of the calendar year. When a legal person is not liable to VAT, he/she may not add VAT in the invoices irrespective of the fact whether the person who receives the invoice is a person liable to VAT or not.

A person liable to VAT has to add in the invoice in addition to the above-said also:

1) his/her VAT payer's registration number;
2) the registration number of the person liable to VAT, who receives the invoice, when he/she acquires the goods or receives services;
3) the price of services or goods without VAT, together with the VAT, and the price together with the VAT.

A reference number may be added in the invoice, which enable the person sending out invoices handle them automatically. When using a reference number while transferring payments, the workload of the person who prepares the invoices is decreased, and the person paying can be sure that the payment transferred is definitely related to the paid invoice. Therefore it is a good idea to be especially careful when entering the reference number while making payments. If the reference number is missing or is wrong, the person issuing the invoice and the recipient have to be matched manually, which is rather complicated in big companies, where the workload is already big enough. A reference number can be generated by using the reference number calculator of the Estonian Banking Association

A lot has been said about e-invoices. They are invoices, which can be read by the recipient’s program or in other words- e-invoices are read by the machine. As of July 1st 2019, invoices to the public sector can be sent only in the format of e-invoices. It must be pointed out that generally the submitted invoices are in PDF format, which are not e-invoices. In order to send out e-invoices, a legal person must be capable to receive e-invoices, i.e. have a corresponding software.

When using the services of, the proper invoice template is already available and one must be sure that the recipient of the invoice has all necessary information about the conducted transaction. In addition, the contracting entity can have invoices as e-invoices if necessary.

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