Comparative review of the VAT exemption – Albania, the Region, and the EU member states

Open Data Albania is investigating into the value of exemption from VAT in Albania, the region, and EU countries. Article 117 of the Law on the Value Added Tax provides that taxable persons, who are residents in Albania, and whose annual turnover is under the minimum threshold required for VAT, are subject to the small business regime, benefitting an exemption from the selling VAT for the goods and services they supply. The exemption from VAT is determined by a decision of the Council of Ministers, and it is currently 5 million Albanian Lekë.

The legislation of other countries in the region, such as Montenegro, Serbia, Kosovo, and Macedonia also recognize an exemption from the VAT based on the companies’ annual turnover. Serbia exempts from VAT enterprises, whose annual turnover is RSD 8 million or Eur 67212. Second comes Albania (exemption as in 2017). The lowest threshold is marked by Macedonia with MKD 1 million or Eur 16269. It is worth mentioning that the threshold is decreased in Macedonia over the two last years from MKD 2 to 1 million.

The EU countries also have a threshold for business companies to register for VAT purposes. The highest is marked by the United Kingdom by Pound 83 thousand or Eur 92930. Next come Romania, Slovenia, Slovakia, Poland, and Lithuania, where such threshold is close to Eur 50 thousand.

The lowest threshold is found in Sweden with SEK 30 thousand or Eur 3123. The Netherlands and Albania do not apply a minimum threshold of registration for VAT purposes.

 

The data are extracted from the tables published on the website of the European Commission (Tax and Customs Union) updated in April 2017, which corresponds with the update of the fiscal year. There is a tendency in European countries to increase the minimum threshold, such as in Sweden, where a threshold was introduced for the first time, or in Malta, which is also in the process of increasing its VAT threshold. Countries in our region, on the other hand, are trying to decrease the minimum threshold, such as Macedonia or Albania, where such threshold is warned to be finally removed.