Albania: Changes to tax legislation effective 2022

Key changes to tax legislation become effective at the beginning of 2022

Key changes to tax legislation become effective at the beginning of 2022

Several key changes to the Albanian tax legislation (approved in late 2021) become effective at the beginning of 2022, with the exception of changes relating to the taxation of the employment income which will enter into force in July 2022.

  • Postponement of electronic invoicing for certain category of taxpayers: The Albanian Government decided to postpone for a six-month period the application of the penalties for certain categories of taxpayers which have not implemented yet the electronic invoicing procedure.
  • Revaluation of the immovable property: The deadline for revaluation of the immovable properties by individuals and entities is again postponed to 30 April 2022. Individuals and entities electing to reevaluate real estate properties must file the application with the State Agency of Cadaster not later than 30 April 2022 and pay the tax for registration of such revaluation before 31 July 2022.
  • Individual (personal) income tax on salaries: Starting from 1 July 2022, the progressive taxation scheme of employment income in Albania will change by introducing new level of the non-taxable salary and adding more taxable layers in the taxation scheme.
  • Value added tax (VAT): The list of the supplies to which a VAT reduced rate applies is extended by adding the sale of agricultural inputs that will be taxed at 10%, instead of the VAT exemption applicable before. Moreover, the farmer’s compensation rate has changed from 6% to 0%. Also, imported machinery and equipment used for investment contracts of ALL 500 million or more will be VAT exempt. Previously, the investment contracts value benefiting the VAT exemption on import of machinery and equipment was ALL 50 million.
  • National taxes: The Law on National Taxes in Albania is amended by adding five new categories of products which will be regulated by this law.
  • Excise law: The excise law has also passed several changes that affect the increase of the excise tax on all products and subproducts subject to this tax. The changes of the excise law introduce a new method of indexing the excise tax every two years based on the inflation rate of the two proceeding years, and introduce increased penalties for certain excisable products

Read a January 2022 report prepared by the KPMG member firm in Albania


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