VAT Deferral for machinery/equipment imports in Albania

Albania/September 2014

The Law no. 7928, dated 27.04.1995 “On Value Added Tax”, as amended, implemented a scheme of deferral and exemption from the payment of VAT.

Based on paragraph 2.1 of Article 26 of the Law no. 7928, for machinery and equipment imported by taxable persons, which is directly related to their economic activity,  the scheme of postponing the payment of VAT for a period of up to twelve months applies, under which VAT is not payable to the customs at the time of import.

This scheme of VAT deferred payment applies to machinery and equipment imported by the taxable persons who are registered as taxpayers for VAT. The condition is that imports carried out are related to the economic activity of the taxable person, and that such economic activity depends on the particular machinery and equipment.

The taxable person benefiting from this scheme is liable to present to the customs authority the documentation required, based on the  tax legislation.

The taxable value of machinery and equipment imported also includes:

a) costs of transport and insurance and other costs involved in the importation of machinery and equipment, up to the moment of entry in Albania.;

b) fees, taxes and duties payable as a result of the export of machinery and equipment from countries from which they are exported, or payable as a result of their import, except the VAT amount.

The customs authority, after determining the value of taxable machinery and equipment, with all its constituent elements, applies to this value the VAT rate, which is in force at the time of importation of machinery and equipment.

VAT calculated by the customs authority is not paid by the taxable person at the time of clearance of imported machinery and equipment; rather it is paid within twelve months from the time of importation of machinery and equipment.

In cases where the investment development cycle, the start of production or the start of the delivery service is longer than 12 months, the Minister of Finance has the authority to extend the period for deferral VAT payment, depending on the investment development cycle defined by the relevant agreement or contract.

Erion Lena (
Eurofast Global, Tirana Office
Tel: +355 69 533 7456