The Albanian Tax Administration has published a Official notice on May 27, 2024, as part of the 2024–2027 Medium-Term Revenue Strategy and the 2024–2028 Tax Administration Strategy. These documents provide measures to increase fiscal transparency, expand the taxpayer base, and improve the voluntary compliance of all taxpayers.
The AT notice specifically focuses on raising awareness and engaging international companies that provide electronic services in Albania toward untaxable persons (individuals and small businesses not registered for VAT). The aim is to inform businesses and the general public about the tax obligations that arise in these cases.
Legal obligations for foreign companies
According to Law No. 9920/2008 “For tax procedures” (Article 9) and Law No. 92/2014 “For Value Added Tax” (Articles 29, 86, 87), international companies providing electronic services to non-taxable persons in Albania have certain specific obligations. These include:
- Appointment of a Tax Representative in Albania to represent the company before the tax authorities.
- VAT charging (20%) of electronic service sales made to non-taxable persons, including the standard 20% rate on the invoice.
- Registration for VAT and the the declaration of her payment, by fulfilling the respective tax obligations through the tax representative.
Tax treatment by client type
The liability varies depending on the client in Albania. If the client is a taxable person registered for VAT (for example, a business or institution), then that client is required to apply the reverse‐charge mechanism. VAT and pay it through the self-billing mechanism. In this case, the international company is not required to charge VAT on the invoice.
On the other hand, when the client is a non-taxable person (usually a private consumer or a small business not registered for VAT), the international company must charge them the standard 20% VAT and pay it to the authorities through the appointed representative. This changes the way taxes are paid depending on the client's status in Albania.
What services are included as “electronic”?
Law No. 92/2014 Article 29 specifies the list of electronic services offered to non-taxable persons. They include, but are not limited to:
- Telecommunications services (e.g. internet, cell phone);
- Radio and television broadcasting services (e.g., radio stations, subscription TV);
- Website maintenance and hosting services (web hosting, remote software maintenance);
- Software supply and its updates (e.g. applications, cloud software);
- Services for images, texts, and digital content, including access to databases;
- Offering music, movies, and video games, including gambling and online betting, as well as the broadcasting of various cultural, artistic, sporting, etc. events;
- Distance Learning Service (e-learning, online courses).
These categories include the most common digital economy experiences (streaming, apps, online games, etc.) consumed by individuals in Albania.
The importance of transparency and fair competition
This AT notice reflects an ongoing effort to increase fiscal transparency and to include all taxpayers in the tax system. By calling on global companies to comply with Albanian law, it establishes equal treatment for all entities operating in the market.
This will ensure that local and international businesses operate under fair competition conditions, without unfair advantages for unpaid providers of electronic services. The measure also contributes to broadening the tax base by including profits derived from the global digital economy in Albanian public revenues.
In summary, the AT Notice serves to give foreign companies a clear signal: tax obligations in Albania must be fulfilled in accordance with national laws. This increases correctability in the Albanian tax system, strengthens trust between taxpayers and authorities, and promotes fair competition in the digital marketplace.