Children's camps still in tax limbo as summer break nears
Just weeks before Estonian schools go on summer break, children's camp organizers are still waiting for clarity on VAT rules and whether they qualify for an exemption.
The uncertainty stems from a dispute over how youth and children's camps are classified — either as educational services or recreational activities. The designation determines their tax treatment.
Until recently, camps were widely considered VAT-exempt. But last fall, the Estonian Tax and Customs Board (MTA) said they must be taxed under current law, arguing camps do not qualify for existing exemptions tied to social or educational services.
With the end of the school year fast approaching, Prime Minister Kristen Michal (Reform) and Minister of Education and Research Kristina Kallas (Eesti 200) reiterated a promise at last week's government press conference that the issue will be resolved before summer.
Kallas said Estonia's ministries now agree the law should be amended to redefine camps as non-formal education, which would ensure their tax-exempt status.
"Camps are defined under the Youth Work Act as recreational programs, and recreational activities are not eligible for VAT exemptions," she explained.
Officials say the necessary bill is already in the works, and that talks with the MTA and Finance Ministry have reached an agreement in principle on the matter. The goal is to amend the law before summer.
But camp organizers say the timing is difficult as summer planning is already well underway.
Kaur Kötsi, head of the Estonian Camp Organizers Association (ELKL), said budgets were set before the issue resurfaced.
"Camp budgeting started at the end of last year and early this year already, before the application and decision deadlines for camp support through the Education and Youth Board (Harno)," Kötsi said.
By that point, camps already need a clear picture of expected participant numbers and daily fees. Changing the rules mid-cycle, he added, creates a lot of confusion.
Camps increasingly unaffordable
According to the association director, some 30,000 children and youth attend various camps each year.
He said rising costs are already pushing camp prices higher, with average daily fees now around €50 per camper. State support for camps hasn't increased since 2018 either, making them increasingly difficult for families to afford.
The MTA maintains that under current law, camps are taxable unless, for example, run by municipalities as non-commercial services at or below cost.
"There is no VAT exemption for camp services under current law," said Richard Kirves, head of the VAT Department at the tax authority. He did add, however, that taxable operators may deduct VAT paid on related input costs.
Camp organizers disagree, arguing that camps already function as non-formal education under existing rules and should qualify for exemption accordingly.
"So I don't actually understand why the law needs to be changed," Kötsi said.
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Editor: Aili Vahtla
