Taxation of cryptocurrency transactions in Estonia
Crypto exchange is a VAT-exempt financial service.
There is no income tax applicable for companies earning revenue from crypto exchange transactions.
Companies in Estonia must pay corporate income tax on distribution of profit to owners.
If crypto companies with only revenues from exchange services have no VAT related income, that means they have no right to deduct VAT from purchase of services.
Obligation to register as taxable person with limited liability
If the Company has no VAT-related income (and no VAT-number) but purchased goods and services from EU/non-EU countries, it has an obligation to register as taxable person with limited liability and pay VAT 22% on purchase of goods and services to Estonian Tax Board.
Please refer to Value-Added Tax Act § 21 + § 16.
Taxable person with limited liability does not have a right to charge VAT on sale of goods and services.
Full VAT registration
There are possibilities to register crypto company as a full VAT company and deduct VAT proportionally.
If a company has monthly activity (purchases and payments) and VAT registration, then monthly accounting is required.
Please contact us for crypto accounting services in Estonia.
Requirements for accounting
Basics
Information required for crypto company accounting in Estonia:
If an Estonian crypto company has no VAT registration and no salary payments, monthly accounting is not needed. Every Estonian company must submit an annual report in six months after the end of the financial year.
If a crypto company has VAT registration or employees, monthly accounting and tax declarations are needed.
The basic accounting principle for a crypto exchange company with an Estonian FIU license is to record crypto assets as inventory, separate the company’s own assets and customer balances, commissions earned from crypto exchange transactions are recorded as revenue and exchange-related fees are recorded as costs.
All sales and purchase invoices;
Receipts/invoices for travel costs;
Bank statements for full month (pdf+ xls);
Salaries (if any)– contracts, payment information;
Loan and any other relevant agreements;
Wallet transactions (in excel) – date, currency, amount, value in EUR or USD, description of the transaction, commission fees, balance at the end of period (year, month)
Internal and external audit requirement
Due to the AML regulation amendment it is mandatory for the crypto license applicants or current holders to appoint an internal and external auditor for their company. Each year the companies have obligation to submit the audits to the Commercial Register. Our accounting team can assist you finding the auditors and assist you in further accounting. Please feel free to contact us for further information on the auditing requirements.
Accounting costs for crypto companies
Accounting service fee depends on the volume of transactions and the need of reporting frequency.
We set up accounting software for the customer together with the needs of reporting (one-time fee 150 – 250 EUR).
Monthly accounting fee starts from 150 EUR if the company has VAT registration or/and at least one employee. Annual report fee is 800 EUR/year. Additional fees will be calculated according to the number of transactions.
As all Estonian companies must submit annual report to Estonian Business Register, the minimum yearly accounting fee is 200 EUR/year if the company is dormant.
To receive a fee quote, please contact us and we will prepare an offer for you according to the number of transactions in your company.
Our experience
We have established over 300 crypto licensed companies and provided accounting services to crypto companies for over 3 years. Our portfolio includes crypto companies of different capacity.
Some companies need accounting services once a year for preparing mandatory annual report. Many crypto companies use our accounting services on monthly basis. We have also audited the financial statements of several crypto companies.
