- DPT publishes daily on its official website the updated list of entities with passive status and that of active farmers.
- Any transaction with a passive entity is considered an administrative violation under Article 44(7) of Law No. 9920/2008 “On Tax Procedures,” as amended, and is punishable for both the seller and the buyer.
- The seller, who was itself in a passive status, is subject to a tax assessment and penalty, while the buyer loses the right to deduct input VAT and to expense it.
- Even an active seller who transacts with a passive entity risks a penalty, unless the list was not updated by the administration for technical reasons.
Every day, the General Directorate of Taxes publishes on its official website the updated list of entities with passive status, as well as that of active farmers. The purpose is to inform third parties in advance whom they should not transact with, since under the 2019 Fiscal Package any transaction with a passive entity is considered an administrative violation for both parties to the transaction.
In our daily work, we often see businesses buy or sell without first verifying the other party's status, believing that liability falls solely on the entity in a passive position, when in fact the law also holds the other party to the transaction liable.
Read also: On the key changes to the law on tax procedures.
Legal basis, Article 44, paragraph 7
What does the provision say?
According to Article 44, paragraph 7, of Law No. 9920, dated 19.5.2008 “On Tax Procedures in the Republic of Albania,” as amended, any transaction carried out by taxpayers, natural persons or commercial legal entities, who are on the passive register, is considered an administrative violation. The provision specifically penalizes both the seller and the buyer who transacts with him.
Penalties for the seller and the buyer
When the seller is in passive status
If the seller himself is on the passive register, he is subject to a tax assessment and a penalty under Article 116 of the law. The buyer, in this case, also receives a tax assessment, since he is not allowed a deductible VAT or a tax-recognized expense, even though he himself may be in active status.
When the seller is active but the buyer is passive.
The active seller who transacts with a passive buyer is penalized under paragraph 2 of Article 128 of the law, except in cases where, for technical reasons, the list of passive entities had not been updated by the tax administration itself at the time of the transaction. The buyer in passive status, for his part, receives a tax assessment and penalty under Article 116.
How is the status of an entity verified today?
The 2019 links no longer work.
The original notice referred to lists of passive subjects and active farmers with shortened links that are no longer active. The safest way to verify a party's current status before engaging with them commercially is to check directly on the official website. taxes.gov.al, in the taxpayer search section, or through the Call Center.
Contact the Call Center
For any uncertainty regarding the status of an entity, DPT offers the toll-free green line 0800 00 02, Monday through Thursday from 8:30 AM to 6:00 PM, and on Friday from 8:30 AM to 4:00 PM, as well as a Live Chat service on its official website.
Every time there is a tax or financial change that affects your business, we notify you directly by email with a practical explanation.
Send me free notificationsActive farmers, a special case
Why is it important for collectors?
The list of active farmers is especially helpful to agricultural and livestock product collectors, since the law does not allow the issuance of a tax invoice for a farmer who does not have active status. Verifying status in advance prevents improperly issued invoices and the resulting tax consequences.
Why it Matters
A quick check avoids a costly penalty.
Verifying the other party's status before entering into a significant transaction takes just a few minutes, whereas the consequences of a transaction with a passive entity—loss of deductible VAT and recognized expenses, additional tax assessment—can weigh much more heavily on a business's accounting.
How we handle this with our clients
When our clients enter into transactions of significant value with new partners, we advise them to verify the taxpayer's status before signing the contract or issuing the invoice, in order to avoid the risk of an unexpected tax assessment.
Frequently asked questions
What happens if I didn't know that the other party was passive?
The law provides an exemption only when the list was not updated for technical reasons by the administration itself. Simple ignorance on the part of the buyer or seller does not automatically exempt them from tax assessment, so prior verification remains the safest approach.
How do I find the list of passive subjects today?
The shortened links from 2019 are no longer active. Verify the status of a specific entity directly on the official taxes.gov.al website, or contact the Call Center at 0800 00 02.
Am I always at risk as a buyer if the seller is passive?
Yes. Even if you yourself are active, purchasing from a passive entity deprives you of the right to deduct or reclaim VAT and may lead to additional tax assessments.
What does this have to do with the farmers?
The list of active farmers works in reverse; it verifies whether a farmer can receive a tax invoice from the aggregator. If the farmer is not active, the invoice cannot be issued to them.
The original DPT announcement describes the launch of this daily publication. Official DPT Announcement. The verification mechanism itself remains active even today, even though the specific links in that notification no longer work.
