What investors & companies need to know!
What tax changes will 2021 bring in Albania? What should investors pay attention to in the future – and which decisions will benefit them? TPA’s experts have summarized the most important tax news for Albania for you.
E-invoicing and tax filing Albania
Government passed a law that will implement a new online billing system to prevent businesses from circumventing tax payments and to boost revenue in the country. The Albanian authorities hope to increase VAT revenues by 15 % with this new e-invoice initiative. Recently, Italy stated that it had closed its VAT gap by over 10 % with its new SdI e-invoice initiative this year.
Taxpayers registered as businesses will be required to submit B2G, B2B and B2C invoices in real-time from 1 January 2021 as follows.
||Type of Transaction
|1. January 2021||Cashless transactions between taxpayers and public government bodies;|
|1. July 2021||Cashless transactions between taxpayers;|
|1. September 2021||Cash transactions by taxpayers subject to VAT and corporate income tax with an annual turnover exceeding ALL 8 million;|
|1. September 2021||
All invoices must be live reported to the tax authorities. All filings and supporting records must also be processed electronically.
Amendments on the Law “On income tax”
The main objective of the changes in this law is extending the base of income taxable in Albania and relieving the tax burden for certain categories and promoting production.
Corporate income tax
Starting from 01.01.2021, Income Tax for businesses with an annual turnover of ALL 14 million will be reduced to 0 % in an attempt to promote SME’s. Previous to this amendment, Income tax for businesses with an annual turnover between ALL 5 million and ALL 14 million was 5 %.
Amendments on the Law “On VAT”
Starting from 01.01.2021, the minimum limit for VAT registration will be the annual turnover of ALL 10 million (until 31.12.2020, the minimum limit will continue to be the annual turnover of ALL 2 million).
Taxpayers with annual turnover of less than ALL 10 million will have the right to choose to register for VAT (or continue to be registered for VAT) only if their annual turnover will exceed ALL 5 million. The above will also apply to persons providing services through the exercise of freelance professions, for which the VAT registration limit is currently zero.