The Value Added Tax (VAT) is a general tax on consumption of goods and services, proportional to their price, which is charged at each phase of production and distribution process without tax price.
AREA OF APPLICATION
Value added tax is subject to:
- all supplies of goods and services, performed against payment, within the territory of the Republic of Albania, by a taxable person acting as such;
- all imports of goods in the territory of the Republic of Albania.
MINIMUM REGISTRATION LIMIT
The minimum registration limit for value added tax is the turnover of 10 000 000 ALL in a calendar year. The taxable person has the right to choose to apply the normal VAT regime, if the annual turnover is greater than 5 000 000 ALL.
STANDARD RATE
The standard rate of value added tax on supplies of goods and services, which is applied as a percentage of the taxable value, is 20%.
REDUCED RATE
The reduced rate of 6% VAT is applied:
- For the provision of accommodation service in accommodation structures, according to the categories defined in the legislation in the field of tourism.
- For each service supply offered within the accommodation structures "Hotel / Resort with five stars, special status", as defined in the legislation of the field of tourism and which are holders of a trademark registered and internationally recognized "brand name".
- For the structures, which carry out reception activities certified as "agritourism", according to the legislation in force in the field of tourism, for the provision of accommodation and restaurant services, with the exception of beverages.
- For the provision of advertising service by audiovisual media.
- For the supply of licensed public transport of passengers by bus with nine plus one seats or more, only with electric motor.
- For the supply of books of any kind.
The reduced rate of 10% VAT is applied:
- For the supply of agricultural inputs, including chemical fertilizers, pesticides, seeds and seedlings, with the exception of hormones classified in codes 2937 of the Combined Nomenclature of Goods.
0% rate:
The following are treated as zero VAT rate supplies:
- Exports
- Goods and services related to their international transport
EXCLUSIONS IN IMPORT
Import of machinery and equipment:
- in function of the realization of investment contracts with equal value or greater than 500 million ALL. (4,166,667 €)
- in order to implement investment contracts in the active processing and agribusiness sector, regardless of the value of the investment;
