5 things that your accountant is not telling you
Summary
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Your accountant knows more than they tell you, and it’s not because they are jealous. Here are five things that you should know about doing your own accounting.
This guest post about tips from accountants was written by ann. - a simple-service annual report preparation tool, and a trusted member of the e-Residency Marketplace.
Usually, an accountant’s job is to ensure your company’s numbers are correct and declarations are submitted on time. What they don’t do is act as your personal mentor, explaining 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 five things that might seem obvious to an accountant, but can be very useful for you to know.
Many entrepreneurs know that registering as a VAT payer becomes mandatory once your annual turnover exceeds 40,000 €. What few people realise is that you can also register as a VAT payer voluntarily before reaching that limit.
The main rule before registering voluntarily is to check whether the VAT you can recover exceeds the time or cost of submitting the declarations.
Example: You buy a laptop for 1700€. As a VAT payer, you receive 328.84 €. But if you rarely make such purchases and your clients are mostly private individuals, the monthly accounting costs may exceed the gain.*
If you pay yourself a higher salary than the workload you actually complete, you create extra costs. For example, if you work in your company part-time but pay yourself a full-time salary, you pay more employment taxes than necessary.
Keep your salary aligned with the actual amount of work you do.
However, to keep your public health insurance active, you must pay at least the minimum monthly social tax. The minimum monthly social tax for health insurance in 2025 is 270.60 €. If your full-time salary is 2000€ gross, but you work only one quarter of the workload, your salary is 500€ gross. The social tax from that salary is 165€. This is not enough to keep your health insurance. The solution is to pay an additional social tax to bring the total to 270.60€.
If your company is not registered as a VAT payer but you purchase certain foreign digital services, such as Facebook Ads, Spotify, or online consulting, from a non-Estonian company. You may then be required to register as a limited liability VAT payer. This gives your company a VAT number, but it does not make you a full VAT payer.
As a VAT payer with limited liability:
This detail is often overlooked and can result in fines or interest charges. If you purchase many foreign services, it may be easier to register as a regular VAT payer or issue the invoice in your personal name and reimburse the cost, as no VAT declaration is required.
When starting a business, people usually use their personal laptop, phone or other equipment. This works fine, but a smarter move would be to sell these items to your company. It is now clear which expenses belong to the business and which to your personal life. It also compensates the tools you originally paid for with your own money.
This creates only a small extra step. The company must correctly record the purchase. For example, with an invoice or a simple purchase-and-sale 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 the real market value. If you sell an old phone for 1000€ when its actual value is 200€, the Tax Office may treat the difference as a disguised dividend and tax it accordingly.
Correct purchase records are simple yet offer several benefits.
Your accounting becomes clearer, your company expenses are correct, and you get fair compensation for your earlier investments.
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 there are easy tools for doing it yourself.
For example, you can prepare your report in ann. in about 30 minutes. You don’t 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 don’t always need to run to your accountant; 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 256€. A silly and unnecessary cost, considering how quickly the report can be done.
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.
Check out ann. from the e-Residency Marketplace!
*The content of this article is based on Estonian tax laws valid in December 2025. It is intended for general guidance only and should not be considered legal or financial advice.
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