Albania
Standard rate
The standard rate of the added value tax for goods and service supplies is applied as a percentage of the taxable value.
The standard VAT rate in Albania in 2024 is 20%.
Reduce rate is 10%
Supply of agricultural inputs, including chemical fertilizers, pesticides, seeds, and seedlings.
Reduce rate is 6%
- Supply of books;
- Delivery of buses with an electric motor designed for use as public transport and with a capacity of more than 8 people.
Zero rate
- Export of gоods;
- Delivery of goods for non–profit organizations;
- The delivery of goods and services in the form of work engaged for imported goods to be developed in Albania and that are later on exported to other countries;
- Some activities related to the international delivery of goods and transportation of passengers;
- The delivery of goods and services for an international company and for its members;
- Delivery of goods, within the framework of diplomatic and consular agreements;
- The delivery of goods and services for the armed forces of other nations joining the North Atlantic Treaty Organization;
- Cooperation with the Bank of Albania, such as the supply of gold;
- As in many countries, this list includes supplies directly related to imports and export.
VAT Standard rate
The standard VAT rate in Albania in 2024 is 20%.
Threshold
A “foreign business” is a business that does not have a fixed office/branch in Albania.
No VAT registration threshold applies to taxable supplies made in Albania by a non-established business. A non-established business must register for VAT in Albania if it engages in any of the following collections:
- Supply of goods situated in Albania at the time of supply;
- Import and export activities in Albania.
Deductible VAT
An entity registered as a VAT taxpayer has the right to deduct earlier paid VAT amounts on purchased goods and services. At the same time, it should be taken into account that the purchased goods and services must be used for business purposes (for example, goods for resale), and not for personal consumption.
To deduct, you must have documents confirming the payment. Such as tax invoices, a customs declarations for import.
VAT registration procedure in Albania
To register, you need to fill out an application form in the Albanian language. It can be found on the website of the tax agency of Albania. Additionally, the passport of the director of the company, a tax certificate, and other constituent documents may be requested.
Tax representative
If the company/individual entrepreneur responsible for declaring and paying VAT is a taxpayer who does not incorporate in Albania as the place where VAT is paid, then it must appoint a tax agent in the Republic of Albania as the person responsible for paying VAT.
The tax agent must be registered with the regional office of the tax department.
VAT returns filing and VAT payment date
You should be very careful not to miss the last day of filing the VAT return and paying the tax. In Albania, such a day is the 14th of the month following the reporting period. For most companies, the tax period is a month.
Threshold
The threshold for registration of digital service providers is not set.
Pieces of evidence
As a rule, the same criteria are used in all countries to determine the place of delivery. You can see the main ones below:
- Customer’s address;
- The address to which the invoice is issued;
- Phone code (phone code of Serbia +355);
- Buyer’s IP address;
- The location of the customer’s fixed landline through which the service is supplied to him.
The legislator leaves the list open to quickly adapt to various conditions for the provision of digital services.
E-services list
Digital services in Albania mean services that require minimal human intervention and are carried out through an electronic network or the Internet. The following list of digital services isn’t exhaustive.
- Telecommunication services;
- Radio and television broadcasting;
- Websites, web hosting, software and hardware maintenance;
- Software and updates for it;
- Images, texts, information, evaluation, and reliability of databases;
- Gambling;
- Audio, video, and audiovisual content;
- Online training.
VAT registration procedure in Albania
To register, it is necessary to appoint a fiscal representative, fill out the registration form “Formula ii regjistrimit” in Albanian, and submit it for consideration together with a set of documents. After checking the information provided by you, the tax agency may request additional explanations/evidence of conducting business.
Tax representative
Yes, according to the rules established in Albania, foreign entities are required to engage a tax representative.
VAT returns filing and VAT payment date
The same rules apply to filing declarations and paying VAT for an overseas entity that supplies digital services as for remote sellers – it is necessary to file a return and pay the tax due no later than the 14th day of the month following the reporting period. A monthly tax period applies to most taxpayers. The tax is paid in Albanian Lek (ALL).
The currency must be converted according to the exchange rate set by the Bank of Albania.
Keeping records
You need quality financial records to prepare your tax returns. These records should confirm the income, expenses, and loans that you report. As a rule, these are the same records that you use to track your business and prepare financial statements. It is necessary to keep records for 10 years.