WB6 IIP
Western Balkans Six
Investment Incentives Platform
The Western Balkans Six Investment Incentive Platform is the first of its kind in the region, providing detailed information on available incentives in each of the WB6. It is one of the key measures under the Regional Investment Area, which is part of the Common Regional Market Action Plan 2021-2024.
Developed with input from Investment Promotion Agencies (IPAs) across the region, the platform includes both financial and non-financial incentives, categorized by type, sector, and target audience.
It provides comprehensive information for investors looking to invest in the WB6. As an evolving resource, the platform will be updated every six months to ensure it remains current and relevant.
Value Added Tax (VAT) Deductions
- Economy name
- Albania
- ID
- A33
- Incentive name
- Value Added Tax (VAT) Deductions
- Brief description
- In addition to the previous VAT incentives, the Law on VAT in Albania (92/2014) allows deductions in specific situations that are accessable to investors when the deduction becomes claimable
- Legal reference name
- Law No. 92/2014 dated 24.07.2014 "On VAT in Albania"
- Legal reference
law section / article -
Article 69-73 Article 69
1. The taxable person has the right to deduct from the VAT calculated for
taxable transactions the following amounts of VAT, to the extent that supplies of goods
and services received are used by the taxable person in function of these transactions
taxable:
a) VAT paid or to be paid in Albania for the supplies of
goods and services that have been supplied or will be supplied to him by another
taxable person;
b) VAT to be paid for actions similar to sales of goods and
the performance of services, in accordance with the letters "c" and "ç", of point 2, of article 9, and
letter "c", point 2, article 12, of this law.
c) VAT paid for goods imported into Albania.
2. For the immovable property, which is part of the business property of the person
taxable and used at the same time both for the purposes of his economic activity and for
other purposes other than those of economic activity, VAT on supplies e
received, directly related to this asset is deductible in proportion to the use thereof
property for the purposes of the economic activity of the taxable person.
3. VAT of received supplies of other goods, other than those in point 2, of
of this article, and which are part of the business property, is deductible in proportion to
the use of this property for the purposes of the economic activity of the taxable person.
Article 70 Other deductions
The taxable person also has the right to deduct the VAT amounts
provided for in Article 69, of this law, to the extent that those goods and services are used for
following transaction needs:
a) supplies made within the economic activity of the taxable person
outside the territory of Albania, which if they were to be carried out within the economy would
to grant the right of VAT deduction to the taxable person.
b) supplies of the taxable person, according to point 37, of article 56, and supplies of
zero rate of VAT according to articles 57, 58, 59, 60, 61, 62, and 64, 65 and 67, of this law.
c) supplies of the taxable person, exempted from VAT, in accordance with
Article 53, letters from "a" to "dh", when the taxable person to whom the services are intended
is located outside Albania or when such transactions are directly related to
related to goods destined to be exported outside Albania.
SECTION 2 PARTIAL VAT DEDUCTION
Article 71 General rule
If supplies of goods and services are used by a taxable person, as per
carrying out taxable transactions that bring the right to VAT deduction, on the basis of
articles 69 and 70 of this law, even for transactions that do not bring this right, then
only the part of VAT related to the first category of transactions is deductible.
The part of the deductible VAT is determined on the basis of articles 72 and 73 for the entirety of
transactions carried out by the taxable person.
Law no. 92/2014, dated 24.07.2014, "On VAT"
28
Article 72 Calculation of the VAT deduction coefficient
1. The VAT deduction coefficient is calculated from the following ratio:
a) in the counter, the total amount of the volume of the annual turnover, excluding VAT, related to
transactions that bring the right of deduction, according to articles 69 and 70, of this law.
b) in the denominator, the total amount of the volume of the annual turnover, excluding VAT, related to
the transactions included in the counter and the transactions that do not bring the right of deduction.
2. In contrast to point 1 of this article, for the calculation of the VAT deduction coefficient, the following amounts are not taken into account:
a) the turnover value realized from the supplies of capital goods, used by
the taxable person for his business needs;
b) turnover value, realized from financial and property transactions
real estate if these transactions are incidental;
c) turnover value, realized from transactions defined by letter "b" to
in "e", of Article 53, of this law, if these transactions are random.
Article 73 Rules for the application of the VAT deduction coefficient
1. The VAT deduction coefficient is determined on an annual basis, it is determined in
percentage and rounded up to the highest unit.
2. The VAT deduction coefficient, provisionally applicable for one year, is
initial discount coefficient and this coefficient is calculated on the basis of the transactions of the year
previously under the terms of Article 71 of this law.
- Incentive group
- Financial
- Incentive category
- Value Added Tax (VAT)
- Economy-wide/Sector-specific
- Economy-wide
- Sector (Simplified)
- All sectors
- Sector (NACE)
- N/A
- Size of firm that can use incentive
- All sizes of firms
- Level at which incentive is available
- Economy-wide
- Ownership of firm that can use incentive
- Any
- Incentive location
- General
- Main objective of the incentive
- Increase competitiveness
- In case of grant, share of grant in investment (in %)
- Contact Info
- Street "Dëshmorët e Kombit" Nr.3, Tirana 1001
- Weblink to Incentive information in English
- Weblink to Incentive information in local language
- Click to open
- Eligibility criteria
description -
In order to be able to exercise the right to deduct VAT, the taxable person must
meet the following criteria:
a) for deduction, according to the definition of letter "a", point 1, article 69, of this law,
related to the sale of goods and the performance of services, to have an invoice drawn up in
compliance with articles 96 to 105 of this law;
b) for deduction, according to the definition of letter "b", point 1, article 69, of this law,
related to actions similar to the sale of goods and the performance of services, must
the formalities determined by instructions from the Minister of Finance are fulfilled;
c) for VAT deduction, according to the definition of letter "c", point 1, article 69, of
of this law, regarding the importation of goods, the taxable person must possess a document
that proves the import, issued at the time of release for free circulation of goods in
the territory of Albania, as defined in the Customs Code of
Albania, in which he is qualified as the recipient or importer of the goods and where the amount should be written
VAT paid and the method of its calculation;
ç) when the buyer is obliged to pay VAT, according to the definition of point 2, of article 86, of
Law no. 92/2014, dated 24.07.2014, "On VAT"
30
of this law, the relevant formalities must be fulfilled, determined by instructions from the Minister of
Finances.
- Eligibility criteria
weblink - Click to open
- Awarding Authority (Name)
- Ministry of Finance, General Directorate of Taxes and Council of Ministers
- Application procedure + Weblink (where available)
-
The taxable person/legal entity must submit an application for VAT deduction to the relevant body with all additional documentation including invoices. If the taxable person does not deduct VAT in the tax period
which the right of deduction arises, he can deduct this amount of deductible VAT after
tax period, but not later than 12 tax periods including the period in question.
- Implementing Authority (Name)
- Ministry of Finance, General Directorate of Taxes and Council of Ministers