Albania Vat

Albania VAT (TVSH), tax year 2026

Source-cited draft. Drafted from the consolidated texts of Law No. 92/2014 on VAT (amended to Law No. 80/2025), Council of Ministers Decision (VKM) No. 953/2014 (amended to VKM No. 612/2026), Instruction No. 6/2015 (amended to Instruction No. 6/2025), Law No. 87/2019 on invoices and fiscalisation (amended to Law No. 83/2025) and Law No. 9920/2008 on tax procedures (amended to Law No. 79/2025), all published by the General Directorate of Taxes and read on 2026-10-23. No accountant has reviewed it. Do not file from it without review by a qualified Albanian professional.

Tax period: the calendar month (Law 92/2014 art. 107(2)). Currency: Albanian lek (ALL). Authority: Drejtoria e Përgjithshme e Tatimeve (General Directorate of Taxes), tatime.gov.al; returns go through e-Filing. Albania is not an EU member: there are no intra-Community supplies, no EU OSS and no EC Sales List. Article numbers below are Law 92/2014 unless another act is named.

See also: albania-income-tax, al-corporate-tax, al-cross-border (tax representative, withholding), albania-payroll, albania-social-contributions, albania-tax-optimization.

Who this applies to

Taxable person. Anyone who independently carries on an economic activity, whatever its form, place, purpose or result (art. 3). VAT is charged on supplies of goods and services for consideration made in Albania by a taxable person acting as such, and on all imports of goods (art. 2).

Registration threshold. A resident taxable person whose turnover is below the minimum registration threshold is in the small business regime: no VAT is charged on sales and no input VAT is deducted (arts. 117, 121). The threshold is set by the Council of Ministers: ALL 10,000,000 of turnover in a calendar year (VKM 953/2014 art. 11(1), as amended by VKM 576/2020). The General Directorate of Taxes states the same figure: registration is mandatory for turnover above ALL 10 million.

Turnover for the test is all taxable supplies, including 0% exports and international transport (arts. 57, 59 to 62), measured excluding VAT (art. 119(1)). Sales of capital assets, incidental financial transactions and incidental real estate transactions are left out (art. 119(2)). Real estate and financial supplies that are the main business count, even though exempt (art. 119(3)). A new business pro-rates the threshold from its registration date to the year end (art. 119(4)).

Crossing the threshold. A small business whose turnover in any 12 consecutive months exceeds ALL 10,000,000 must apply to register within 15 days of the date of crossing. The date of crossing is the last day of the calendar month in which turnover went over the line (art. 122(1)). A person can go back to the small business regime if turnover in the last 12 calendar months falls below the threshold; deregistration then takes effect 12 months after the request (art. 122(2)).

Voluntary registration. A person below the threshold may opt into the normal VAT regime only if annual turnover is above ALL 5,000,000 (VKM 953/2014 art. 11(1); art. 120(1)). Once in, the person must stay in for at least 2 calendar years. A later request to leave takes effect 6 months after it is filed (art. 120(2), (3)). ALL 5,000,000 is the floor for opting in, not a registration threshold.

Zero threshold. Notaries and state and private bailiffs register for VAT whatever their turnover, even if they also make exempt supplies (VKM 953/2014 art. 11(2), added by VKM 128/2022). The text says "professions such as" these two; no other profession is named.

Who cannot use the small business regime: incidental supplies of immovable property, activities in the agricultural producers' compensation scheme, and services supplied by a non-established taxable person where Albanian VAT is due (art. 118). Persons whose activity is tax evasion under Law 9920/2008 art. 116 are also excluded (art. 117(3)).

Non-established suppliers. A taxable person not established in Albania that makes supplies where Albanian VAT is due, other than services reverse-charged by an Albanian business customer, must register through a tax representative (arts. 87, 88, 91(2)). See Cross-border points.

Every taxable person, VAT-registered or not, must declare the start of its economic activity and register within 15 days of starting (art. 91(1)). The tax administration can register a person who should have registered (art. 91(4)).

Special regimes that this skill names but does not work through: travel agents (arts. 123 to 128), second-hand goods, art and antiques margin scheme (arts. 129 to 137), auctions (arts. 138 to 144), agricultural producers' flat-rate compensation at 10% (arts. 145 to 150), investment gold (arts. 151 to 155), and electricity sold through the Albanian Power Exchange, which is exempt, with the buyer reverse-charging VAT on purchases from the exchange until 31 December 2026 (arts. 155/1 to 155/3).

Rates, bands and thresholds

Which 6% rule applies matters. The art. 49(3) rate covers only the sleeping service (and breakfast sold inside the room price). Food, drinks and other services in the same hotel are at 20%, and the accommodation must be shown separately on the invoice (VKM 953/2014 art. 11/1(1)). A taxpayer that runs other activities as well must register a separate taxable person for the accommodation business to use the 6% rate (VKM 953/2014 art. 11/1(1), (2)). The art. 49(4) branded 5-star special-status hotels are the exception: every service inside them is at 6%.

Exempt supplies (no VAT, no input deduction). The main ones (arts. 51, 53):

• medicines, active implantable medical devices and implantable medical devices; health services by recognised institutions and licensed medical, paramedical and dental professionals;
• education by recognised public and private institutions, and private school or university teaching by teachers;
• insurance and reinsurance, including brokers and agents; granting, negotiating and managing credit; deposit, payment, transfer, currency and securities transactions (debt collection is taxable); management of investment funds;
• supply of buildings or parts of buildings and the land they stand on, other than the construction process itself; supply of undeveloped land;
• letting of immovable property, except lettings of buildings up to two months, hotel and holiday accommodation, parking and vehicle storage, fixed equipment and machinery, and safe deposit boxes (these are taxable);
• printed newspapers and magazines, printing of newspapers, and advertising in print media;
• betting, lotteries and games of chance; postal universal service; agricultural machinery on the Council of Ministers list (VKM 953/2014 art. 8(3), Annex 1/A); veterinary services except for pets; new electric-only vehicles never registered before (other than the art. 49(7) buses).

The Minister of Finance may allow an option to tax certain financial and real estate supplies (art. 55).

The taxable base

Taxable amount. Everything the supplier receives or will receive from the customer or a third party for the supply, including subsidies linked directly to the price, excluding the VAT itself (art. 37). Other taxes and charges, and ancillary costs charged to the customer (commission, packing, transport, insurance), are included (art. 39(1)). Early payment discounts, discounts given at the time of supply, and disbursements recorded as suspense accounts are excluded (art. 40). On imports, the base is the customs value plus taxes and duties due on import other than VAT, and ancillary costs up to entry into Albania (art. 44).

Tax point. VAT arises when the goods or services are supplied (art. 32). An advance payment creates a tax point when it is received, and an invoice issued before supply creates one when issued (art. 33(3), (4)). Continuous supplies, including construction, are treated as made in the month the invoice is issued (art. 33(2)). Imports are taxed on import or on release from a suspensive regime (arts. 34, 35).

Input VAT. A registered person deducts VAT on purchases and imports used for taxable supplies, including 0% supplies (arts. 68 to 70). The deduction needs a valid invoice under arts. 96 to 105, a customs import document naming the person as importer, or the reverse charge formalities (art. 75). Since fiscalisation, an invoice is valid for tax only once it carries the NIVF fiscal number (Law 87/2019 art. 20(5)). Unused input VAT can still be claimed within 12 tax periods, counting the period the right arose (art. 76(4)).

Blocked input VAT (art. 74(1)):

• fuel, unless the business sells fuel or uses it for technological needs within ministerial norms;
• fuel of any kind for passenger cars (autoveturat);
• passenger cars and related services, unless the business resells cars or the cars are its only purpose (rental, taxi, ambulance);
• travel and per diem, hotel accommodation, recreation and entertainment, luxury and representation costs. Representation is also capped at the deductible limit in the income tax law (0.3% of annual revenue, see al-corporate-tax).

Partial exemption. A person with both taxable and exempt supplies deducts by a coefficient: taxable turnover over total turnover, excluding capital asset sales and incidental financial and real estate transactions (art. 72). The coefficient is set yearly, rounded up to the next whole percent, applied provisionally on the prior year's figures, and corrected in the first period of the next year. The provisional coefficient must be notified to the tax administration by 31 January, or by the first return in which it applies (art. 73).

Capital goods. Input VAT on capital goods is adjusted when their use changes between taxable and non-deductible activities: one fifth a year over 5 years for movable goods, one tenth a year over 10 years for immovable goods (art. 80).

Bad debts. VAT on an unpaid amount can be reduced once the debt is declared uncollectable by the courts, and not earlier than six months after the end of the period in which the VAT was charged. The seller issues an invoice marked "Borxh i keq" referencing the original invoice; the buyer reduces its input VAT by the same amount (art. 84).

Excess credit is carried forward to the next period (art. 76(2)) or refunded under art. 77 (see Deadlines and filing).

Deadlines and filing

The return. The tax administration pre-fills the monthly return from the electronic sales and purchase books (libri i shitjes, libri i blerjes) built from fiscalised invoices. The taxpayer checks it, corrects or completes it against its books, confirms it and submits it on e-Filing by the deadline (arts. 106(4), 109(2)). The return is filed electronically from the taxpayer's own account; if the deadline falls on a non-working day, it moves to the next working day (Law 9920/2008 art. 65(1), (3)). A registered person files every month, including nil months. Small business regime taxpayers do not file VAT returns but still issue fiscalised invoices (art. 110(1)).

Invoicing and fiscalisation (Law 87/2019). Every corporate and personal business income taxpayer and every VAT taxpayer must issue an invoice for every supply, whatever its turnover (Law 87/2019 arts. 4, 6). Each invoice is electronically signed and sent to the tax administration over the internet before it is given to the buyer. The administration returns a fiscal number (NIVF), and only then is the invoice valid for tax purposes (art. 20(1) to (5)). Cash sales get a printed fiscalised invoice handed over at the time of supply (art. 23(1)). Business to business invoices paid other than in cash, and all invoices to public bodies, must be issued, sent and received as e-invoices through the central invoice platform (arts. 24(1), 25(1), 26). Goods moved by transport need the e-invoice fiscalised before transport starts, with the printed QR code carried by the transporter (art. 24(4)). Invoices may be in any currency, but the total, the taxable value and the VAT must also be shown in lek at the Bank of Albania rate on the day of issue (art. 6(6)). Software, devices, business premises and operators must be registered in advance (Law 87/2019 arts. 14 to 16; Law 9920/2008 art. 122).

Refunds. A registered person can claim a refund of excess credit only if it has carried the excess forward for 3 consecutive months and the amount claimed is above ALL 400,000 (art. 77(1)). Exporters can claim once their excess is above ALL 400,000 (art. 77(3)). The claim goes on the form "Kërkesë për rimbursimin e TVSH-së" to the VAT Refund Directorate (Law 9920/2008 art. 75/1(1)). The administration decides within 60 days, or 30 days for exporters, and pays through the treasury within five days of approval; if it does not, the taxpayer may withhold payment of other taxes up to the claimed amount (Law 9920/2008 art. 75/1(1)). For exporters (VKM 953/2014 art. 10):

• exports above 70% of total sales in the claim period, active status, more than 1 year exporting and no unpaid social or health contributions: zero risk, refunded automatically within 30 days;
• exports above 50% up to 70% (or above 70% without all the other conditions): refunded within 30 days after risk analysis;
• other exporters: 60 days after risk analysis.

Claims are suspended while a criminal investigation for VAT fraud schemes or concealment of income is open (Law 9920/2008 art. 75/1(1/3)). Before refunding, the administration can require proof that the business aims to make taxable supplies (art. 77(4)).

Penalties and interest

All from Law No. 9920/2008 on tax procedures, as amended, unless another act is named.

Interest (kamatëvonesa). Unpaid tax carries interest from the due date to the payment date at 120% of the Bank of Albania interbank rate, set each quarter on the previous quarter's average. The General Directorate of Taxes publishes the rate it applies (art. 76(1), (3)). Interest cannot be waived or appealed except for calculation errors or a change in the underlying tax (art. 76(4)).

Caps and relief. Administrative fines linked to a tax liability cannot exceed 100% of that liability (art. 111(5)). Fines can be lifted for natural disasters, death or serious illness, or where the taxpayer followed written guidance from the tax administration (art. 111(4)).

Joint liability. A buyer who knew or could not deny that VAT on its purchase, or on an earlier link in the chain, went unpaid through fraud is jointly liable with the supplier (Law 92/2014 art. 86(7)) and loses the input deduction (Law 92/2014 art. 76(7)).

Cross-border points

Services: general rule. For business customers (B2B) the place of supply is where the customer is established (art. 24(1)). For private customers (B2C) it is where the supplier is established (art. 24(2)). Special rules override this for:

• services connected with immovable property in Albania (art. 25(a));
• passenger transport, by distance (art. 25(b));
• restaurant and catering, where performed (art. 25(c));
• short-term hire of means of transport, where made available (art. 25(d));
• B2B admission to events, where held (art. 26).

Services from abroad (reverse charge). When a non-established supplier provides services whose place of supply is Albania under art. 24(1) to an Albanian taxable person or VAT-identified legal person, the customer pays the VAT (art. 86(2)). The customer self-assesses output VAT and, if the purchase is for taxable supplies, deducts the same amount as input VAT. The Albanian buyer must also issue and fiscalise a self-invoice by the 10th of the following month, unless the foreign supplier issued an e-invoice through the Albanian central platform (Law 87/2019 arts. 7(2)(b), 8(3), 20(7), (10)). A non-taxable legal person that must self-assess files a return only to pay the VAT and has no deduction (Instruction 6/2015 art. 67(3)).

Non-established suppliers to non-registered customers (consumers, small businesses, unregistered public bodies) must appoint an Albanian tax representative to account for the VAT (arts. 87, 88; Instruction 6/2015 art. 27). The representative must have a place of business in Albania, registers separately under its own number, and is personally liable for the VAT and penalties (art. 88). If no representative is appointed, the Albanian customer pays the VAT and penalties (art. 88(3)). This covers telecommunications, broadcasting and electronically supplied services to Albanian consumers (art. 29), and the art. 30 list of services supplied to non-taxable persons in Albania, which includes consulting, legal, accounting, advertising, intellectual property, staff supply and movable equipment hire. Albania has no simplified OSS-style registration: the representative route is the only one in the law.

Selling services abroad. An Albanian business supplying services to a foreign business customer charges no Albanian VAT, because the place of supply is outside Albania under art. 24(1). Keep evidence that the customer is a business established abroad. The invoice is still issued and fiscalised (Law 87/2019 arts. 4, 20(1), 24(6)).

Goods. Imports pay VAT at customs at the domestic rate (arts. 50, 86(5), 90). Some imports are exempt under art. 56(38), for example machinery and equipment directly linked to investment contracts of ALL 500,000,000 or more, or to inward processing or agribusiness investment whatever its value (VKM 953/2014 art. 8(1)), with the eligible categories in VKM 953/2014 art. 9. VKM No. 612/2026 added to art. 8(3) a separate machinery list (Annex 6) for investment contracts of ALL 500,000,000 or more by or for entities licensed by the defence industry authority under Law No. 87/2024. Exports of goods transported outside Albania by or for the seller, or by or for a non-established buyer, are 0% (art. 57). Goods in a non-resident traveller's personal luggage count as exports if they leave Albania within the three months after the month of supply, the invoice is stamped by customs at the exit point, and the total including VAT reaches the minimum set by the Minister of Finance (art. 58).

Withholding and treaties on payments to non-residents are income tax, not VAT: see al-cross-border.

Worked examples

Example 1: monthly return with a reverse-charged foreign service

Drini SHPK, a VAT-registered Tirana company, sells goods in Albania in March 2026 for ALL 3,000,000 net, all at 20%: output VAT ALL 600,000. Its fiscalised domestic purchase invoices carry deductible input VAT of ALL 250,000 (no fuel, cars or entertainment). It also buys a software subscription from an Irish company for ALL 200,000 with no VAT. The supplier is not established in Albania and Drini is a business customer, so Drini self-assesses 20%, ALL 40,000, as output VAT and deducts the same ALL 40,000 as input VAT. It fiscalises a self-invoice by 10 April 2026.

The net VAT due is ALL 600,000 + 40,000 − 250,000 − 40,000 = ALL 350,000. The return and payment are due on 14 April 2026. If Drini files on time but pays 10 days late, the late payment penalty is 0.06% × 10 days × ALL 350,000 = ALL 2,100, plus interest at the published rate (not computed here). If it had also filed the return late, Drini, a corporate income taxpayer, would add one late filing fine of ALL 10,000 for that return (Law 9920/2008 art. 113(a)).

oaCopy code
name: Drini SHPK, March 2026, domestic sales plus reverse-charged foreign service, 10 days late payment
inputs:
  sales_net: 3000000
  domestic_input_vat: 250000
  foreign_service: 200000
  days_late: 10
steps:
  - output_vat: sales_net * 0.20
  - reverse_charge_vat: foreign_service * 0.20
  - total_output: output_vat + reverse_charge_vat
  - total_input: domestic_input_vat + reverse_charge_vat
  - vat_payable: total_output - total_input
  - late_payment_fine: vat_payable * 0.0006 * days_late
expected:
  output_vat: 600000
  reverse_charge_vat: 40000
  total_output: 640000
  total_input: 290000
  vat_payable: 350000
  late_payment_fine: 2100

Example 2: exporter with a refund claim

Shkodra Textile SHPK has been exporting for three years, has active status and owes no social or health contributions. In each of April, May and June 2026 it exports goods for ALL 4,500,000 (0%) and sells in Albania for ALL 1,500,000 net at 20% (output VAT ALL 300,000). Its deductible input VAT is ALL 480,000 a month. Each month leaves an excess credit of ALL 180,000, carried forward.

After three consecutive months the carried excess is ALL 540,000. That is above the ALL 400,000 floor, so a refund can be claimed (art. 77(1), (3)). Exports are 4,500,000 ÷ 6,000,000 = 75% of total sales, above 70%. With its other facts this puts the claim in the zero-risk category, refunded automatically within 30 days (VKM 953/2014 art. 10(2)). Had the export share been 60%, the claim would still be paid within 30 days, but only after risk analysis (VKM 953/2014 art. 10(3)).

oaCopy code
name: Shkodra Textile SHPK, April to June 2026, excess credit refund test
inputs:
  exports: 4500000
  domestic_sales: 1500000
  input_vat: 480000
  months: 3
  refund_floor: 400000
steps:
  - output_vat: domestic_sales * 0.20
  - monthly_excess: input_vat - output_vat
  - carried_excess: monthly_excess * months
  - above_floor: carried_excess - refund_floor
  - export_share: exports / (exports + domestic_sales)
expected:
  output_vat: 300000
  monthly_excess: 180000
  carried_excess: 540000
  above_floor: 140000
  export_share: 0.75

Ask the client first

1. Turnover in the last 12 months and this calendar year, measured excluding VAT and including exports. Above ALL 10,000,000 registration is mandatory within 15 days of the end of the crossing month; between ALL 5,000,000 and ALL 10,000,000 registration is optional with a 2-year lock-in.
2. What exactly is sold. Accommodation, agrotourism, books, audiovisual advertising, agricultural inputs and sports construction can be 6% or 10%; health, education, finance, insurance, land and long lets are exempt and limit input recovery.
3. Who the customers are and where they are. Foreign business customers take services outside Albanian VAT; Albanian consumers buying from a foreign supplier need that supplier to have a tax representative.
4. Purchases from abroad. Foreign services trigger reverse charge and a self-invoice by the 10th; imported goods pay VAT at customs and must be fiscalised within 7 days.
5. Fiscalisation set-up. Whether invoicing software, premises and operators are registered and every invoice gets an NIVF. An invoice without one gives the buyer no deduction and exposes the seller to the art. 123 fines.
6. Carried-forward credit and export share, to see whether a refund claim is open and in which category.

Sources

Not yet confirmed: the current quarter's late payment interest rate published under Law 9920/2008 art. 76(3); which art. 113 band (ALL 5,000 or ALL 3,000) applies to a late VAT return filed by a VAT-registered natural person who pays personal income tax on business income, since the law does not define "individual taxpayer" for art. 113(c) and Instruction 24/2008 predates that band; the minimum purchase value for the traveller export rule in art. 58 (set by ministerial instruction, not read); the item-by-item contents of VKM 953/2014 Annex 4 (agricultural inputs) and Annex 1/A (agricultural machinery), not read; whether "professions such as notary, bailiff" in VKM 953/2014 art. 11(2) reaches any other profession in practice.

Contributed by Michael Cutajar.

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Today's figures and who stands behind this skill

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