Value added tax factoring, Tax Representative

In cooperation with major Estonian banks IMG Konsultant AS provides value added tax factoring to support the companies' cash flow through purchasing their claims for overpaid amounts of value added tax. Such optimisation of the use of current assets helps speed up the rate of turnover and increase liquidity.

The factoring advance constitutes 80 - 90% of the refundable amount of value added tax. The advance is remitted to the company’s bank account within one banking day after acceptance of the value added tax return. The Tax and Customs Board refunds the overpaid amount of value added tax to the bank account of the factor. The factor deducts interest and the factoring advance from the overpaid amount of value added tax received from the Tax Board and Customs Board and remits the remainder of the sum to the company’s bank account.

Description of the value added factoring scheme

  • IMG Konsultant AS conducts an audit with the company, assessing its tax risks;
  • The company prepares the value added tax return and submits it to the factor and the Tax and Customs Board;
  • The factor forwards the value added tax return to IMG Konsultant AS for assessment;
  • The factor pays the factoring advance to the company, subject to acceptance of the value-added tax return;
  • The Tax Board refunds the value-added tax overpaid by the company to the factor;
  • The factor pays the reserve held to the company.

Tax Representative

A person of a third country engaged in business with no permanent establishment in Estonia must appoint, upon registration as a taxable person, a tax representative.

The tax representative of a non-resident is a person to whom a corresponding activity licence has been issued by the Tax and Customs Board and whom a non-resident may authorise to represent the non-resident for the performance of the obligations arising in Estonia from an Act concerning a tax or from the Taxation Act.

AS IMG Konsultant has the activity licence from the Tax and Customs Board and provides the services of a tax representative for foreign clients in matters related to value added tax.

Please contact us, if you are interested in value added tax factoring.

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