The General Directorate of Taxes in Albania has published an official notice on May 14, 2025, reminding the non-resident providers of digital services of their VAT responsibilities when providing listed remote services to customers residing in Albania.
The VAT compliance framework for non-resident providers of digital services is principally based on the following legal acts:
- Law on Tax Procedures, Law No.9920 (Article 9);
- Value-Added-Tax Law, Law No. 92/2014 (Articles 29,87 and 87).
Timeline
The official notice, issued by the tax authority, is effective immediately. It reminds cross-border digital service providers to act following their VAT responsibilities.
Voluntary Compliance
Instructions
The Albanian tax framework clearly defines that non-resident providers of digital services to end customers residing in the country should register for VAT, charge VAT, and report VAT to the tax authority. Considering that there is no simplified registration system in place (so far), the non-resident providers of digital services should acquire services of a local tax representative, who will register the foreign provider, and fulfill all other VAT requirements (mainly submission of tax declaration and payment of VAT).
For B2C digital services, the standard VAT rate of 20% should be charged. Regarding the reporting obligation for B2B transactions, the local taxable person or non-VAT legal person is obliged to self-assess its VAT obligation using the reverse-charge mechanism.
The official circular from the tax authority clearly emphasizes that the primary focus of the notice is to expand the scope of taxable persons that should have been registered for VAT in the first place since the adoption of applicable tax provisions.
Considering that VAT revenue from non-resident providers of digital services is much lower than it should be (based on the reviews conducted by tax officials), the tax authority is reaching out to all interested stakeholders in this manner.
If the accountable foreign providers aren’t registered for VAT and aren’t operating following the law, the tax authorities will initiate legal audits against such businesses.
How to stay compliant
The cross-border providers of digital services to end customers based in Albania should:
- Acquire the services of the local tax representative;
- Charge VAT on their invoices;
- Collect and remit VAT to tax authorities via tax proxy.
If you have any questions concerning the registration process and your VAT compliance responsibilities for your business operations in Albania, don’t hesitate to contact us. Our tax team would be happy to assist you.
Respective cross-border suppliers of digital services should seriously consider the official notice of the Albanian tax authority within the scope of the current tax regulations. As the experience of some other countries shows, they used the same official reminder to the businesses to respect their tax duties; if that were not the case, the tax audit would soon follow the non-compliant providers with accompanying fines and penalties.
Aleksandar Delic
1stopVAT Indirect Tax Manager – E-Commerce