Official notice for multinational companies providing electronically supplied services to non-taxable persons located in the territory of the Republic of Albania

The Tax Administration, in the framework of implementing the priorities and measures of the Medium-Term Revenue Strategy 2024–2027, as well as the Tax Administration Strategy 2024–2028, has undertaken a series of initiatives aimed at increasing transparency, expanding the tax base, and strengthening voluntary compliance by all taxpayers.

A key focus of these initiatives is also raising awareness and encouraging voluntary compliance by multinational companies that provide electronically supplied/digital services to non-taxable persons located in the territory of the Republic of Albania, that may be individuals and/or businesses/entities not registered for VAT.

The Albanian Tax Administration reminds all these companies that, pursuant to the provisions of Law No. 9920 “On Tax Procedures”, Article 9, and Law No. 92/2014 “On Value Added Tax”, as amended, Articles 29, 86, and 87, they are required to appoint a tax representative in the territory of the Republic of Albania, apply VAT at the standard rate of 20% on their sales to non-taxable persons in the territory of Albania, and pay the corresponding VAT liability through the appointed tax representative. If electronically supplied/digital services are also provided to taxable persons registered for VAT in Albania, these recipients are responsible for charging and paying VAT through the reverse charge mechanism (i.e., in such cases, the foreign companies are not required to apply VAT through the tax representative).

Law No. 92/2014 “On Value Added Tax”, as amended, provides in Article 29 the list of electronically supplied/digital services to non-taxable persons, including:

1. supply of telecommunication services;
2. supply of radio and television broadcasting services;
3. website supply, web-hosting, distance maintenance of programmes and equipment;
4. supply of software and updating thereof;
5. supply of images, text and information and making available of databases;
6. supply of music, films, and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events;
7. supply of distance teaching.

Based on the above, the Tax Administration officially notifies foreign companies providing electronically supplied/digital services to non-taxable persons in the Republic of Albania of their obligation to comply with the legislative tax requirements in the Republic of Albania, including:

• Appointment of a Tax Representative;
• Registration for VAT purposes;
• Declaration and payment of VAT liability and compliance with any other obligation according to Law No. 9920 “On Tax Procedures”.

This notice is part of the Tax Administration’s efforts to increase awareness, encourage voluntary compliance, take the appropriate legal measures, prevent tax avoidance, and ensure equal treatment for all taxpayers and fair market competition.

In the event of non-response and failure to fulfill the legal obligations within a reasonable timeframe, the Tax Administration informs that it will undertake all administrative and legal actions provided for under the applicable legislation.