In imports, VAT is paid at customs upon clearance and then deducted on the period's return; for a business with taxable activities, it is a temporary payment, not a cost. In exports, the supply is taxed at the zero rate and the right to deduct is fully preserved, so the exporter usually ends up with a VAT credit surplus.
This page covers the place of supply, VAT on imports and its deductibility, zero-rated exports and the documentation required, services received from abroad via self-billing, the fiscalization of imports, and customs regimes.
Read also: How VAT works: collected, deductible, and liability.
Before the rate, the question is where the supply is taxed. The VAT law determines the place of supply separately for goods and separately for services, and it is precisely this determination that decides whether the transaction is included in the Albanian VAT return.
| Transaction | VAT treatment |
|---|---|
| Goods imported into Albania | VAT is paid at customs and deducted on the tax return. |
| Goods exported outside Albania | Zero rate, with a full right to deduct. |
| Service obtained from a foreign supplier | Self-billing by the Albanian recipient |
| Service performed for a client abroad. | The treatment depends on the place of supply under the law. |
| International transport | Zero degree |
For cross-border services, the verification of the place of supply is carried out before issuing the invoice, because any subsequent correction affects both the books and the return.
Read also: Tax obligations for electronic services from abroad.
VAT on imports is calculated and paid at customs upon release from customs, and is calculated on the customs value together with customs duties and excise duties, when applicable.
The customs duty is not a cost for the business making taxable supplies. It is entered in the period's purchase ledger and deducted on the return, just like the VAT on a domestic invoice. The real impact is on liquidity. Cash goes out at customs and is returned through the deduction on the period's return.
An importer clears goods with a customs value of 5,000,000 lek and pays 1,000,000 lek in VAT at customs. In the same period, it sells domestically for 7,000,000 lek without VAT, i.e., 1,400,000 lek VAT collected, and makes domestic purchases of 500,000 lek without VAT, i.e., 100,000 lek VAT deductible. The total deductible VAT is the 1,000,000 from imports plus the 100,000 from domestic purchases, i.e., 1,100,000 lek. The payable amount is 1,400,000 minus 1,100,000, i.e., 300,000 lek.
Imports are fiscalized within 7 days, an extended deadline from 3 days due to the invoice law changes. Without this step, the transaction will not be properly recorded in the purchase ledger, and deducting the VAT paid at customs becomes difficult.
Article 56 of the law contains a long list of exempt imports, with more than thirty items, including imports under investment contracts, personal effects, inherited goods, traveler's baggage, specified gifts, and pharmaceutical products. The exemption depends on formal requirements and the accompanying document, so it is verified before the shipment departs, not at the customs counter.
Read also: VAT Exemptions and the Effect on Deductions.
The export of goods is taxed at a zero rate under Article 57. The invoice does not include VAT, while the right to deduct purchases remains full. This is why the exporter is the classic case of a credit surplus.
A producer exports goods worth 5,000,000 lek at the zero rate, so the VAT collected is zero. Domestic purchases during the period—raw materials and services—amount to 3,500,000 lek excluding VAT, so 700,000 lek of VAT is deductible. No tax liability arises and the credit surplus is 700,000 lek. Once 400,000 lek have been used, a refund can be requested, with a 30-day deadline for the exporter.
The zero rate is not applied on the invoice; it is applied on the goods' exit documents. If the customs documentation does not match the invoice and the sales book, the supply risks being treated as domestic and VAT is charged at the standard rate.
✔ The export customs declaration is kept with the invoice and reconciled with the sales book.
✔ The export invoice is issued and fiscally registered according to the general rules.
✔ In an export to an individual, the buyer's identification and address are noted on the invoice.
✔ The contract, the transport document, and the payment are kept as a single chain of proof.
✔ Currency values are converted according to the specified rate, and a record of the rate used is kept.
Read also: VAT refund for the exporter, conditions and a 30-day deadline.
| Article | Category |
|---|---|
| 57 | Export of goods |
| 58 | The traveler's luggage |
| 59 | International transport |
| 60 | Supplies similar to the export |
| 61 | Gold supplied to the Bank of Albania |
| 62 | Brokerage services |
| 63 to 67 | International Trade and Customs Regimes |
Customs regimes, such as warehousing, processing, and transit, are addressed in Articles 63 through 67. For a business operating with customs warehouses or under active processing, the VAT treatment is read together with the chosen customs regime, because the two systems interact.
When an Albanian business receives a service from a foreign supplier, the foreign invoice does not include Albanian VAT. The obligation to calculate VAT shifts to the recipient, who issues a self-invoice by the 10th of the following month and records the transaction simultaneously in the sales book and the purchase book.
A company pays 800,000 lekë for a software service from a foreign supplier. Self-billing results in 160,000 lekë of VAT collected and 160,000 lekë of VAT deductible. When the activity is fully taxable, the net effect is zero and no additional liability arises. When the activity is exempt, the 160,000 lekë remain a real liability that is paid without deduction.
This is why expenses for third-party platforms, digital advertising, hosting, and software subscriptions must be tracked by accounting every month and not excluded just because the invoice isn't in Albanian.
Read also: VAT on digital services from non-resident companies.
Read also: Books, declarations, and self-billing every month.
On import, the applicable supply rate is applied—usually 20%—and it is calculated on the customs value together with customs duties and excise, when applicable.
For a business with taxable activities, yes. It is entered in the purchase ledger and deducted on the period's statement, so it is a temporary payment, not a cost.
The export of goods is taxed at a zero rate, so the invoice does not include VAT, while the right to deduct purchases is fully preserved.
Self-billing is due by the 10th of the following month. VAT is recorded as collected in the sales book and as deductible in the purchases book.
The treatment follows services obtained from abroad, i.e., self-billing. For a fully taxable business the net effect is zero, whereas for the exempt activity a real liability remains.
Within 7 days, an extended deadline from 3 days due to changes in the billing law.
Request a refund when the surplus exceeds 400,000 lek. For the exporter, the refund period is 30 days, without having to wait three consecutive periods.
Article 56 contains over thirty cases, including imports under investment contracts, personal effects, inheritance, traveler's baggage, specified gifts, and pharmaceutical products. The full list is set out in the text of the article.
It depends on the place of supply under the law and on the nature of the service. This point is verified for the specific case before issuing the invoice, because it affects the period's declaration.