Accounting in Estonia remains one of the main reasons international founders choose to establish an OÜ. Estonia’s digital-first infrastructure, predictable compliance rules, and deferred corporate income tax system make it especially attractive for e-residents and remote-first businesses.

This guide explains how accounting in Estonia works in 2026, what obligations apply to OÜs, and how professional accounting services help founders stay compliant with minimal administrative effort.

Why accounting in Estonia appeals to international founders

Estonia offers a uniquely streamlined accounting and tax environment compared to most EU countries. The key differentiator is the corporate income tax system, where profits are not taxed until they are distributed. As long as profits are reinvested or retained, the corporate income tax rate is effectively 0%.

From an operational perspective, Estonian accounting is built around:

• Fully digital reporting via the Tax and Customs Board (e-MTA)

• Online annual reporting through the Business Register

• Standardised accounting formats under Estonian GAAP

• Clear, predictable filing deadlines

For international founders, this means accounting can be managed remotely without physical presence in Estonia.

Core accounting obligations for Estonian OÜs in 2026

All Estonian private limited companies (OÜ) must comply with the following accounting requirements, regardless of the owner’s residence.

Monthly accounting

Companies must record all transactions accurately and chronologically. This includes sales invoices, purchase invoices, bank movements, and expense documents. Accounting must follow Estonian GAAP and be retained for at least 7 years.

VAT accounting (if registered)

VAT registration becomes mandatory once taxable turnover exceeds €40,000 in a calendar year. VAT-registered companies must submit monthly VAT returns and maintain compliant VAT documentation.

Payroll and tax reporting

If the company has employees or pays management fees, payroll taxes must be declared monthly using the TSD return. This includes income tax, social tax, and unemployment insurance contributions.

Annual report (Aastaaruanne)

Every OÜ must submit an annual report by 30 June following the financial year. Even dormant companies are required to file a simplified annual report.

Accounting services in Estonia: What is typically included

Professional accounting services in Estonia usually cover the full compliance cycle, not just “bookkeeping”.

Typical accounting services include:

• Monthly accounting and reconciliation

• VAT return preparation and submission

• Payroll calculation and TSD filings

• Annual report preparation and submission

• Ongoing compliance monitoring and support

Accounting in Estonia for e-residents

E-Residency allows founders to manage an Estonian OÜ fully online, but it does not remove accounting obligations. E-resident companies are subject to the same accounting, tax, and reporting rules as locally owned OÜs.

Professional accounting support is especially important for e-residents due to:

• Language barriers (official filings are in Estonian)

• Differences between Estonian and home-country tax logic

• VAT and cross-border transaction complexity

• Director liability for incorrect filings

Most e-residents therefore outsource accounting in Estonia to licensed service providers.

Step-by-step: Setting up accounting in Estonia (2026)

1. Company registration
   Register the OÜ via the Estonian Business Register using e-Residency or local representation.

2. Accounting system setup
   Define chart of accounts, reporting periods, and document flow in line with Estonian GAAP.

3. VAT registration (if applicable)
   Apply for registrations once the VAT threshold is exceeded or voluntarily if required.

4. Monthly compliance routine
   Submit documents, reconcile accounts, and file VAT or TSD returns if applicable.

5. Annual reporting
   Prepare and submit the annual report by 30 June.

This process remains largely unchanged for 2026 in Estonia.

Accounting in Estonia compared to other EU countries

Compared to many EU jurisdictions, Estonia offers:

• Deferred corporate income tax on retained earnings

• Lower administrative costs

• Fully digital accounting and tax filing

• Transparent public company data

• Simplified reporting for micro and small companies

These features significantly reduce the compliance burden for startups and international founders.

Common questions about accounting in Estonia

Do dormant Estonian companies need accounting?

Yes. Dormant OÜs must still file an annual report, although the reporting requirements are simplified.

What is the VAT threshold in Estonia in 2026?

VAT registration is mandatory once taxable turnover exceeds €40,000 in a calendar year.

Is accounting in Estonia required to be in Estonian?

Official filings must be submitted in Estonian, which is why most foreign founders use local accounting providers.

How long must accounting documents be retained?

Accounting records must be stored for at least 7 years.

Can accounting in Estonia be handled fully online?

Yes. Accounting, tax filings, and annual reporting can all be managed digitally.

Accounting services in Estonia by 1Office

1Office provides professional accounting in Estonia for local and international companies, including e-residents. Services are designed to ensure full compliance with Estonian accounting and tax law while keeping administration efficient and transparent.

Support includes monthly accounting, VAT and payroll reporting, annual reports, and ongoing compliance guidance managed by local specialists.