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Albania's New VAT Law Explored At Deloitte Event

by Mary Swire, Tax-News.com, Hong Kong

20 February 2015


Albania's new value-added tax (VAT) law, which became effective at the start of this year, will be particularly attractive for foreign investors, especially those from EU member states, attendees at a recent event hosted by Deloitte Albania heard.

Olindo Shehu, Office Managing Partner and Tax and Legal Partner for Deloitte Albania and Kosovo, discussed some of the main features of the legislation at the event. He said that the main appeal is that "investors will be able to freely plan the purchase of goods and services beyond Albanian borders, being ensured that these transactions' treatment from [a] VAT perspective will be significantly comparable to the treatment according to the EU Directive."

The new VAT law no. 92/2014, which entered into force on January 1, 2015, was drafted with the assistance of the European Union (EU) as part of a project aimed at harmonizing Albania's tax legislation with Europe's. The new VAT Law and the corresponding VAT instructions replace and revolutionize the Albanian regime, introducing new definitions of the terms taxable person, taxable supply, and taxable basis, and implementing new place of supply rules and VAT exemptions.

Shehu explained that the new legislation brings numerous advantages for both Albanian and foreign companies operating in the country, as well as to the Albanian economy. "This legislation will entail a more uniform application of the VAT rules," said Shehu, "it will reduce risks of misinterpretation and abuse on the grounds that, now, we can make reference to the solid practice of the EU states and to the decisions of the European Court of Justice (ECJ) related to the VAT."

Shehu explained that, even though Albania is not a member of the EU and it is not obliged to fully comply with the ECJ rulings, they are expected to be widely accepted by the tax authorities and courts in Albania.

Pieter Wessel, Partner at Deloitte Romania and Indirect Tax Leader at Deloitte Central Europe, also discussed the implementation of the EU VAT Directive in European Union member states and in particular in countries in Central and Eastern Europe.

TAGS: court | compliance | Central and Eastern Europe | VAT rates | VAT tax authority guidance | tax | value added tax (VAT) | VAT legislation | law | Albania | Romania | tax authority | legislation | European Union (EU) | services | VAT compliance matters | Europe | Tax

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