5 Things That Your Accountant Is Not Telling You

Usually an accountant’s job is to make sure your company’s numbers are correct and all declarations are submitted on time. What they do not often do is act as your personal mentor who explains every trick or detail. Not because they want to hide anything, their job is simply to follow the law and deliver the required reports. But as an entrepreneur, these small tips can help you make smarter decisions.

Here are 5 things that might seem obvious to an accountant, but can be very useful for you to know.

1. VAT registration. Obligation or opportunity?

Many entrepreneurs know that registering as a VAT payer becomes obligatory once your yearly turnover passes 40 000 €. What fewer people realise is that you can also register voluntarily before reaching that limit.

The main recommendation before registering voluntarily is to check whether the VAT you can get back is bigger than the time or cost of submitting the declarations.

Example:

You buy a laptop for 1700 €. As a VAT payer you get back 328.84 € (24% VAT). But if you rarely make such purchases and your clients are mostly private individuals, the monthly accounting cost may be higher than the gain.

2. Paying yourself a salary. Find the right balance

If you pay yourself a higher salary than the workload you actually complete, you simply create extra costs. For example, if you work in your company part time but pay yourself a full time salary, you end up paying more employment taxes than necessary. It is reasonable to keep your salary in balance with the real amount of work you do.

However, to keep your public health insurance active, you must pay at least the minimum monthly social tax, which in 2025 is 270.60 € per month. So if your full time salary would be 2000 € gross, but you only work one quarter of the workload and your salary is 500 € gross, the social tax from that amount is 165 €. This is not enough to keep your health insurance. The solution is to pay additional social tax so the total reaches 270.60 €.

3. Restricted VAT payer when buying foreign services

If your company is not registered as a VAT payer, but you buy certain foreign digital services such as Facebook Ads, Spotify, online consulting and similar from a non-Estonian company, you may be required to register as a VAT payer with limited liability. This gives your company a VAT number, but it does not make you a full VAT payer.

As a VAT payer with limited liability:

• you must declare VAT only on those foreign service purchases, 

• you do not charge VAT on your own sales, 

• you cannot get VAT refunds on your other expenses. 

• you only need to submit a declaration when such a purchase happens, not every month.

This detail is often missed and can lead to fines or interest. If you buy many foreign services, it may be easier to register as a regular VAT payer or to put the invoice under your personal name and reimburse the cost, because then no VAT declaration is required.

4. Using personal items for business. Do it correctly

When starting a business, it is common to use your personal laptop, phone or other equipment. This works fine, but it can be smarter to sell these items to your company. This makes it clear which expenses belong to the business and which to your private life, and it also compensates you for tools you originally paid for with your own money.

This creates only a small extra step. The company must record the purchase correctly, for example with an invoice or a simple purchase and sales agreement. As a private person, you do not need to declare any income if you sell the item for a reasonable price, because it is treated as selling used personal items, not business income.

However, the price must be close to real market value. If you sell an old phone for 1000 € when its actual value is around 200 €, the Tax Office may treat the difference as a hidden dividend and tax it.

This step is simple but gives you several benefits. Your accounting becomes clearer, your company expenses are correct, and you get fair compensation for your earlier investments.

5. The annual report is easier than you think

Every Estonian private limited company (OÜ) must submit an annual report even if there was no activity. Your accountant will remind you, but they might not tell you that there are easy tools for doing it yourself.

For example, you can prepare your report in ann. in about 30 minutes. You do not need to know all the rules because ann. guides you step by step. That feeling of doing it yourself, and doing it well, is very freeing. You do not always need to run to your accountant. Sometimes you can simply handle it yourself.

If you do not submit the report on time, your company can be removed from the register. Yes, you can restore it, but the restoration fee is 200€ + income tax. A silly and unnecessary cost, considering how quickly the report can be done.

Summary

These five tips are not something your accountant hides on purpose. Consulting is often not included in the normal bookkeeping fee, so an accountant simply does not see ongoing guidance as part of their job. As an entrepreneur, however, knowing these basics helps you make smarter decisions and avoid situations where money or time gets wasted for no good reason.

Entrepreneurship does not have to be complicated. When you know the main rules and use the right tools, everything becomes much easier and clearer.