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Amendments to Albanian tax legislation

Amendments to Albanian tax legislation

On 29 July 2020, the Albanian Parliament approved some amendments to the Law on Invoice and Circulation Monitoring Systems and Law on the Tax Procedures in Albania.

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Apart from the changes in the abovementioned law, on 22 July 2020 the Albanian Council of Ministers determined new registration threshold for VAT purposes and unified the declarations deadlines for all VAT registered taxpayers.

The majority of the changes introduced will become effective starting from 1 January 2021.

Amendments to Law on Invoice and Circulation Monitoring Systems

The recent economic factors due to Covid-19 situation were taken into consideration and the Albanian Parliament approved some changes regarding to the deadlines for implementation of the recently approved Law on Invoice and Circulation Monitoring System. The change of deadlines has impacted also the rollout of the taxpayers required to implement first the electronic invoicing procedure. According to the changes approved, the provisions of implementation of the new invoicing rules will be mandatory from:

  • 1 January 2021 for business to government (B2G) supplies;
  • 1 July 2021 for business to business (B2B) supplies; and
  • 1 September 2021 for business to customer (B2C) supplies. Previously, the timeline for implementation of electronic invoicing provisions for B2C supplies was divided in three different intervals depending on the annual turnover of the supplier.

Amendments to the Tax Procedures Law

Adoption of the existing fiscal devices for the purposes of new invoicing procedure

Existing fiscal devices, which could ensure issuance of invoices in accordance with the provisions of the Law on Invoice and Circulation Monitoring Systems will continue to be in use and maintained by the companies authorized to sell certified devices. Authorized entities for distribution of the fiscal certified devices will continue to provide maintenance services until the entry into force of provisions of the new invoicing law provided that all requirements of this law are met.

Revocation of activity’s suspension in case of failure to issue the fiscal coupon

Taxpayers evidenced to not issue the fiscal coupon (more than once) are subject to a penalty and immediate suspension of activity. The suspension of activity will be revoked if the taxpayer settle the penalty imposed no later than 30 days from the suspension date.

Amendments to VAT registration threshold and compliance deadlines

New registration threshold for VAT purposes

Starting from 1 January 2021, the VAT registration in Albania will be required if the annual taxable turnover is above ALL 10 million. However, taxpayers may register voluntarily for VAT purposes if their annual turnover is above ALL 5 million.

The new VAT registration threshold will be uniformly applied to all categories of taxpayers. Currently, any entrepreneur acting as regulated profession is required to register for VAT purposes irrespective the annual turnover or nature of activity. Starting from 1 January 2021, the VAT threshold will be applied for registration of entrepreneurs providing services considered as regulated profession (such as notaries, lawyers, dentists, nurses, doctors, pharmacists, engineers, architects, accountants, auditors, etc).

In addition, the new VAT registration threshold will apply to agriculture producers from 1 January 2021, who currently are obliged to register only if the annual taxable turnover exceeds ALL 5 million.

The existing registration threshold of ALL 2 million taxable turnover applied for the majority of taxpayers and other specific VAT registration thresholds for certain categories will continue to apply until 31 December 2020.

Unification of the VAT declarations deadlines

Starting from 1 January 2021, all VAT registered taxpayers will be obliged to submit on a monthly basis the VAT purchase/sales books and the related VAT return. The VAT registered taxpayers will be obliged to submit the VAT purchase/sales books no later than 10th date of the following month, while the monthly VAT return will be due no later than 14th date of the following month.

Quarterly VAT reporting for VAT taxpayers with an annual turnover between the interval ALL 2 million – ALL 5 million will continue to apply until 31 December 2020.

Entry into Force

Law no. 108/2020 dated 29 July 2020 on “Amendments of the Law on Invoice and Circulation Monitoring Systems” and Law no. 110/2020 dated 29 July 2020 on “Amendments to the Law on Tax Procedures in Albania” published in the Official Gazette 146 dated 7 August 2020 and are effective 15 days after the publication.

Decision no. 576 dated 22 July 2020 on amendments to the Decision no. 953 on “Implementing provisions of the VAT Law” is published in the Official Gazette 139 dated 29 July 2020. The provisions of this Decision become effective from 1 January 2021.

© 2020 KPMG Albania Shpk, an Albanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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