Starting July 1, 2025, Estonia‘s standard VAT rate will rise from 22% to 24%. This change will apply until December 31, 2028. For contracts signed before May 1, 2023 that didn't account for VAT changes, the previous 20% rate can only be used until June 30, 2025. The government shortened this transition period to ensure uniform tax application for security funding purposes.

The bottom line: No new transition provisions will be added for the upcoming increase. Estonia expects businesses to manage this risk in their agreements.