The law introduces a new invoicing and monitoring model of transactions that are performed by taxpayers in Albania. It applies to all registered taxpayers that are required to issue fiscal invoices, public entities, banks, financial institutions and other intermediaries facilitating the payment of electronic invoices.
Albania’s abandoned system was based on the older version of fiscalisation devices which was not capable of reporting in real time and are not compatible with EU standards. With the recent changes, Albanian tax authorities aim to align legislation with EU Directive on Electronic Invoicing in Public Procurement and the VAT Directive. Achieving better collection of taxes, ensuring an efficient control of transactions and elimination of tax evasion and digitalisation of the economy are the main goals of the new fiscalisation model.
Main features of the fiscalisation model
There are not any changes regarding the taxation rules and obligations, in particular VAT and income tax. The latest changes mainly focus on the features of the new fiscalisation model, in particular the obligation to use certified devices and software, and requirements related to invoicing, archiving and registration. The new model is mainly software-based and uses internet connection.
The model requires taxpayers to implement a “fiscalisation system.” The main elements of the new fiscalisation system will include:
- fiscal devices for issuing invoices and a printer for printing them;
- certified software solution(s) for issuing and receiving electronic invoices, electronically signing invoices, transmitting data to the central invoicing platform, finalising the fiscalisation procedure and exchanging messages;
- the communication system between the taxpayer and the tax authorities through an encrypted electronic exchange network (internet) for electronic data transfer over the internet.
Taxpayers will be able to use existing fiscal devices if they fulfil or are adapted to fulfil the requirements of the law.
The central invoicing platform where data will be exchanged will be managed by the National Agency for Information Society (NAIS), but the data will be administered by the Albanian tax authorities. In order to issue invoices, taxpayers must obtain an electronic certificate issued by NAIS and store it to ensure the integrity of content.
Identification of fraudulent invoices
The model will allow tax authorities to more easily identify suspicious transactions by adopting a risk-based tax inspection approach. This means that some taxpayers´ transactions will be monitored more often, instead of the ones that seem to be compliant with the law. Furthermore, taxpayers will be able to verify invoices by scanning a unique QR code on their smartphones and sending it to the tax authority using internet. Tax authority will send back a confirmation if the QR code and associated invoice exists in its database.
The system will let taxpayers ensure that invoices are reported to the tax authority. Taxpayers are encouraged to report any fraudulent or non-reported invoices to the authorities in Albania to help the government reduce grey economy.
Timeline for the implementation of the law
The law will be implemented to the following groups according to the specified deadlines:
- 1 September 2020 – Cash transactions performed by taxpayers subject to VAT and corporate income tax (CIT) with an annual turnover exceeding ALL 8 million;
- 1 January 2021 – Cash transactions performed by taxpayers subject to VAT and simplified CIT with an annual turnover between ALL 2 million and ALL 8 million; cash transactions performed by taxpayers subject to simplified CIT with an annual turnover not exceeding ALL 2 million; and cashless transactions between taxpayers and public government bodies (B2G);
- 1 July 2021 – Non-cash transactions performed between taxpayers (B2B).
