Automated VAT returns

Law No. 79/2025, published in Official Gazette No. 11 of 15 January 2026, amended Law No. 9920 of 2008 on tax procedures. The law provides that where a taxpayer does not submit a VAT return by the statutory deadline, the tax system may automatically generate and file the return within 24 hours using sales and purchase book data available through the fiscalization platform. Taxpayers may amend the auto-generated return, while late-filing penalties remain applicable.

The law also reduced the cash payment limit for B2B transactions from ALL 150,000 to ALL 100,000 per transaction and introduced a cash payment ceiling of ALL 500,000 for transactions involving individuals and self-employed persons. It also strengthened requirements for electronic communication with the tax administration.

POS terminal requirements

Albania continued the phased implementation of mandatory POS or POI terminal requirements. Accommodation structures, transport services, public institutions and state-owned companies were required to have terminals operational by 30 May 2026. A further deadline of 31 December 2026 applies to other businesses.

The rollout has raised implementation issues in sectors such as transport, including costs, bank commissions, connectivity and the absence of unified ticketing infrastructure. The Bank of Albania has announced measures intended to support implementation, including a temporary arrangement for free POS terminals and steps to reduce payment transaction costs.

Proposed zero VAT rate for basic foodstuffs

On 27 April 2026, the Albanian Parliament accepted for consideration a bill that would amend the VAT Act to introduce a zero percent VAT rate for certain basic household consumption items. The proposal covers categories including bread and cereal products, dairy products, eggs, fruit and vegetables, and meat products. The detailed list of qualifying goods would be determined by secondary legislation.

Albania currently applies a standard VAT rate of 20%, reduced rates of 6% and 10%, and zero-rating for specified supplies such as exports and international transport. The foodstuffs proposal remained under parliamentary consideration during the reporting period.

VAT compensation scheme for farmers

A new VAT compensation scheme for farmers is scheduled to apply from 1 July 2026. The scheme is intended for farmers who are not VAT-registered and therefore cannot deduct input VAT. Compensation is paid where produce is sold to VAT-registered collecting or processing entities and the required tax invoice is issued.

The Albanian Tax Administration indicated that approximately ALL 400 million could be transferred to farmers under the scheme in its initial phase. The administration also stated that it would monitor collecting and processing entities to verify compliance with invoicing requirements.

Digital services

The Albanian Tax Administration issued a notice concerning foreign suppliers of digital services to Albanian consumers. Foreign providers of services such as streaming, hosting, telecommunications and e-learning to non-VAT-registered customers in Albania are required to appoint a local tax representative, register for VAT, charge VAT at the standard rate and declare and pay VAT through the representative. For supplies to VAT-registered Albanian businesses, the reverse charge applies.

VAT rate framework

Albania’s main VAT rate framework remained unchanged in H1 2026. The standard rate is 20%. Reduced rates apply to specified sectors and supplies, including accommodation, agritourism services, books, advertising by audiovisual media, electric buses and certain agricultural inputs. The VAT registration threshold for domestic businesses remains ALL 10 million in annual turnover. No registration threshold applies to non-established businesses making taxable supplies in Albania.

VAT legislation, tax authority guidance and administrative decisions across Albania.

VAT Developments in Albania - 6 Months Into 2026

VAT Developments in Albania - 6 Months Into 2026