On 1 January 2007, an amendment to the Value Added Tax Act will enter into force in Estonia, which will entail changes to imposing value added tax to financial services. Above all, this concerns the services related to the safekeeping and administration of securities and management of securities portfolio. Still, tax will not be imposed to securities transactions and opening and closing of securities safekeeping accounts.
The amendment of the Value Added Tax Act is due to harmonisation of the Estonian legislation with the Sixth Council Directive. The objective of the Sixth Council Directive is harmonisation of the laws of the Member States and ensuring the functionality of the European internal market through common system of value added tax and common tax base.
The rate of VAT shall be zero for a person liable to (value added) tax in an EU Member State, who submits his VAT number to SEB Eesti hispank and to a person in a non-European Community country.
“There will be no impact to institutions in EU that are eligible for zero tax as long as the VAT number is lodged with SEB,” says a spokesman for SEB.