Value Added Tax

This law establishes the implementation of the Value Added Tax in the Republic of Albania. Value Added Tax (VAT) is a general tax on the consumption of goods and services, proportional to their price, which is charged at each stage of production and distribution on the price before tax. All supplies of goods and services made for consideration within the territory of the Republic of Albania by a taxable person acting as such, and all imports of goods into the territory of the Republic of Albania, are subject to value-added tax. Its constituent parts provide a detailed presentation of the key aspects of implementing the VAT mechanism. Thus, the law provides clear definitions regarding the taxability of supplies, as well as the place of supply for both goods and services. A significant place is given to the detailed treatment of the internationalization of the supply of goods and services, viewed from the perspective of the VAT functioning scheme. Persons required to register, to maintain their records up to date, to declare and pay VAT, occupy a significant space in the structure of this law. Despite the obligations, the law also clearly establishes the right of every taxable person to benefit from VAT refund. For the first time, the law also addresses special schemes for VAT tax regimes applied in Albania. This tax has been in effect in the Republic of Albania since July 1996. The current Law No. 92/2014 of July 24, 2014, “On Value Added Tax” was drafted within the framework of the 2007 IPA Project “Support for the General Directorate of Taxes” of Albania for the approximation of domestic legislation with the Community Acquis. Source: General Directorate of Taxes.