Data-Based Reporting in Estonia: What Changes for KMD and TSD

The Estonian Tax and Customs Board is preparing the biggest change to reporting in a decade. The return as a form — something an accountant fills in and submits through the portal — is going to disappear. In its place comes a machine interface: the accounting software sends the transaction data to the tax office itself.

This affects everyone: VAT-registered companies and employers alike. What follows is put together from the Board's own published material as of 11 September 2026. Some deadlines are still open, and those places are flagged separately.

What data-based reporting actually is

Today it works like this: the transactions already sit in the accounting software, but for the tax office a summary is calculated from them and transferred onto a return. The VAT return has boxes, the TSD return has annexes, and a person is answerable for the summary being right.

In the data-based model no summary is made. The tax office receives transactions one by one, in a standard format, straight from the software. The form goes, the data stays. In the Board's own framing the goal is to end the situation where the same data is entered in several places more than once.

• Format: XBRL GL — an international standard for transmitting accounting data
• Channel: X-tee, meaning direct exchange between the software and the tax office, with no portal login
• Principle: per transaction, not a summary for a period

The Tax and Customs Board estimates the change will save the Estonian business sector at least four million working hours a year.

When it happens

The move comes in two parts and starts with payroll data, not VAT. That is sensible: TSD data has a simpler structure, so the solution is tried on it before VAT is taken on.

• TSD — technical documentation promised for the fourth quarter of 2026, with the rollout following
• The VAT return and the employment register — technical documentation from the second quarter of 2027

Exact dates for when the old order finally disappears have not been published. In practice that means both routes will work side by side for a while. Worth re-checking the timeline in November, when the Board publishes its annual overview of next year's changes.

What changes for the accountant

The biggest change is not technical but substantive. When the tax office sees transactions one at a time, the option of quietly fixing an error at the end of the period disappears. A wrong account, a wrong VAT rate or a missing invoice shows immediately — not once the summary has been calculated.

• Data has to be correct at the moment of posting, not at month end
• A counterparty's registry code and VAT number become critical — they are what ties the data together
• Invoice descriptions and accounts have to be consistent, because a machine reads them
• The month-end check does not go away, but it moves earlier

Anyone who has been tidying up postings at the last moment before filing will feel the change in working rhythm most.

What an owner should do right now

The only thing that calls for action today is the accounting software. The Board has set out three situations here.

1. 1If you use Estonian accounting software, you probably need do nothing yourself — the provider will prepare the transition. Ask them in writing anyway whether and when.
2. 2If you use foreign software, contact the provider and ask directly whether they plan XBRL GL support under the Estonian taxonomy. A no means the software has to be changed, and that is better known a year ahead than a month ahead.
3. 3If the company is small and there is no software, look at e-Financials from the Centre of Registers and Information Systems, which is being prepared for this transition.

The third case covers more owners than it first seems: bookkeeping kept in a spreadsheet does not work in a data-based model, because there is nothing there to send into a machine interface.

What stays the same

The change concerns how data is transmitted, not what is taxed. Until the Board says otherwise, the existing rules apply.

• VAT rates of 24%, 13% and 9% are not changed by this reform
• The deadline for the VAT return and the intra-Community supply report is still the 20th of the month following the taxable period
• Parts A and B of KMD INF still declare invoices from €1,000 excluding VAT per transaction partner
• The registration obligation still arises at €40,000 of taxable supply in a calendar year

Is it worth preparing now

Yes, but without panic. Two things make sense today: get a written answer from your software provider, and tidy up counterparty data — registry codes and VAT numbers. The rest becomes clear when the technical documentation is published.

If the bookkeeping is with a firm, the transition is the firm's responsibility. For our clients we check the software readiness ourselves, and the owner does not have to deal with it.