Registration for VAT becomes mandatory when annual turnover exceeds 10,000,000 lekë, and the application must be submitted within 15 days of exceeding that threshold. Below this threshold, registration is optional, available for annual turnover above 5,000,000 lek, while notaries and court-appointed bailiffs must register regardless of turnover.
This page covers how the threshold is measured, the application deadline, the calculation for when voluntary registration makes sense, the de-registration restrictions, and the practical steps for transitioning from the small business regime to the VAT regime.
Read also: How VAT works: the full mechanism and the monthly calendar.
The threshold is 10,000,000 lek annual turnover. It is measured on the total supplies of the entity, not on profit and not on a single activity. If the same NIPT carries out trade and services, or has two units, the revenues are aggregated.
| Situation | Treatment |
|---|---|
| Annual turnover up to 10,000,000 lek | Small business regime, no VAT |
| Annual turnover over 10,000,000 lek | Mandatory VAT registration |
| Turnover over 5,000,000 lek, below the threshold | Possible voluntary registration |
| Notary and judicial bailiff | Registration regardless of turnover |
| New business with projected turnover above the threshold. | Registration from the start |
On the registration form, the projected turnover is declared. This figure determines the category in which the business starts, so it is filled out carefully. A rough projection for the remaining two months of the year, when converted to an annual figure, could exceed the threshold and have the business start with monthly obligations it didn't anticipate.
The turnover recorded is read from the sales book generated by the fiscalization system. The check is carried out at the end of each month. The six-month closing is the point at which it is actually assessed whether the figures will remain below the threshold until the end of the year.
Read also: Invoices, fiscalization, and the books that generate turnover.
Once the threshold is crossed, the registration application must be submitted within 15 days. The deadline doesn't start at the end of the year or when you notice it; it starts the moment your turnover exceeds 10,000,000 lek. That's why the monthly turnover check is a small task with big value.
From the moment of registration, every invoice issued includes VAT and every documented purchase entitles you to a deduction. The monthly cycle begins immediately: the sales and purchase books are due by the 11th, and the return and payment by the 14th.
A service business posts 10,000,000 lek turnover in September and registers for VAT. In its first month as a VAT-registered business, invoices to customers total 1,200,000 lek excluding VAT, i.e., 240,000 lek of VAT collected. Fiscalized invoice purchases amount to 700,000 lek without VAT, i.e. 140,000 lek of VAT deductible. The payment obligation is 240,000 minus 140,000, i.e. 100,000 lek, payable by the 14th of the following month.
If the price charged to the customer remains the same and the business starts to include VAT, the margin falls. For a sale of 1,200,000 lek, switching to the VAT regime without price adjustment leaves you with 1,000,000 lek in revenue and 200,000 lek in liability. Discussions with clients take place before the registration date, because after that the invoice includes VAT without asking.
Businesses with over 5,000,000 lek in turnover can voluntarily register. This is not a symbolic step. The election is valid for two years, and during this period the business has the same monthly obligations as any VAT-registered entity.
The assessment depends on two questions: who the clients are, and how much VAT remains as a cost on your purchases.
✔ When clients are VAT-registered businesses, they deduct the VAT from your invoice, so the actual price for them does not increase.
✔ When clients are individuals, VAT increases the final price and makes you more expensive compared to an unregistered competitor.
✔ When VAT-eligible purchases are substantial, without registration that VAT remains a net cost.
✔ When major clients request an invoice with VAT, registration is a practical requirement for working with them.
A studio that serves only businesses has annual revenue of 6,000,000 lekë and purchases of 4,000,000 lekë excluding VAT. Unregistered, it pays 800,000 lekë in VAT on purchases and treats it as a cost. When registered, it collects 1,200,000 lek VAT from clients, deducts 800,000 lek for purchases, and remits 400,000 lek. The VAT collected is not a cost for the studio, because business clients deduct it, and the 800,000 lek that was previously a cost has now been recovered.
When the clients are individuals, the same calculation is reversed, because the 1,200,000 lek VAT is not deducted by anyone and either reduces the margin or increases the price.
Read also: When is voluntary registration for VAT meaningful?.
Deregistration is not a business decision that can be made at any time. The law sets minimum periods to ensure the system is not opened and closed based on quarterly circumstances.
| Case | Condition |
|---|---|
| Voluntary registration | The election is held every two years. |
| Request for deregistration | It happens after six months. |
| Return to the small business regime | After 12 months |
| Discontinuation of operations | Deregistration follows the procedure for deactivating or registering out the entity. |
Until the date of deregistration, monthly obligations remain in full—namely books, returns, and payments. A taxpayer who has applied for deregistration and is awaiting a decision is not relieved of deadlines.
✔ Check the sales recorded in the sales book at the end of each month.
✔ Once the threshold is exceeded, submit the request within 15 days via e-Albania and e-Filing.
✔ Review the price list and notify customers before the registration date.
✔ Ensure that suppliers issue invoices to the business's NIPT, not in the administrator's name.
✔ Separate taxable supplies from exempt ones in accounting so that the deduction is calculated accurately.
✔ Set the 11th and the 14th in your calendar as permanent monthly deadlines.
✔ Check cash payments, because the limit between businesses is 100,000 lek.
Read also: Books, statements, and monthly VAT reporting..
When annual turnover exceeds 10,000,000 lek. The application must be submitted within 15 days of exceeding the threshold.
On turnover, that is, on the total of supplies. Profit has no role in the VAT threshold.
Together. The threshold applies to the subject, not to the activity, so the revenues of both are aggregated.
Yes, over 5,000,000 lek in revenue. The election is held every two years, so the decision is made based on calculations, not impressions.
Yes, regardless of turnover. For notaries and judicial bailiffs the threshold is zero.
The application can be made after six months, while the return to the small business regime occurs after twelve months. For voluntary registration, the election remains valid for two years.
Immediately. The tax period is the calendar month, so the sales and purchase book is submitted by the 11th and the return by the 14th.
If the clients are registered businesses, the VAT increase doesn't affect them because they can deduct it. If the clients are individuals, the decision is a choice between the margin and the price, and it is made before the registration date.
The obligation arises under the law, regardless of registration, and is accompanied by fines under tax procedures. The sooner the situation is corrected, the smaller the penalty. Write to us with the specific figures.