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New reimbursement procedures

21 March 2014

On 27 February 2014, the Minister of Finance approved Instruction No. 6 on Certain Amendments and Additions to Instruction No. 17 dated 13 May 2008 on Value Added Tax, as amended. The main changes consist of the following:

VAT reimbursement procedures

Following the amendments of Law No. 7928 dated 27 April 1995 on Value Added Tax in relation to value added tax (VAT) reimbursement procedures, the new Instruction specifies the steps to be taken by the taxpayer and tax authorities for the VAT reimbursement.

According to the amendments of the Law and the related Instruction, the Albanian Treasury Department is the competent authority to process the payment of the VAT amount to be reimbursed. Previously, the VAT reimbursement procedure was independently undertaken by tax authorities.

Based on the new procedures, all VAT reimbursement requests submitted by taxpayers from 1 January 2014 onwards are subject to a specific procedure to be undertaken by the Regional Tax Directorate and the Treasury Department. The Instruction provides that once the request for reimbursement is submitted by the taxpayer, the tax authorities should verify whether the information provided is correct and whether the amount claimed for reimbursement fulfills the conditions for reimbursement as set out by the VAT Law. The initial verification should be based only on the documents provided by the taxpayer for VAT reimbursement purposes.

If, during the initial verification, the tax authorities conclude that the request has not been correctly prepared, they should inform the taxpayer that the request is not acceptable and explain briefly the reasons why the request is deemed unacceptable. The taxpayer may resubmit the VAT reimbursement request after all issues considered inaccurate have been addressed.

If, during the initial verification, the request is considered correctly prepared, the tax authorities should notify the Treasury Department about the amount requested for reimbursement within 2 days as of the submission of the request. Afterwards, the taxpayer will be subject to a tax audit of the Regional Tax Directorate where the taxpayer is registered.

The Instruction sets out that the tax authorities should complete the reimbursement procedure within:

  • 30 days as of the date of submission of the request for exporters or entities carrying out projects financed under agreements ratified by the Albanian Parliament or grants approved by the Council of Ministers;
  • 60 days as of the date of submission of the request for other taxpayers.

Within the above periods, the tax authorities should perform an initial verification of the documents, the tax audit procedures, exchange of information between the tax authorities and the Treasury Department and transfer of the VAT claimed for reimbursement. The VAT claimed for reimbursement is transferred if the tax authorities conclude that all legal conditions set out by the Law are fulfilled. If, after the tax audit, the tax authorities conclude that the request for reimbursement does not meet the legal conditions and consequently the reimbursement is refused, the taxpayer has the right to appeal the conclusions of the tax audit report before the Tax Appeal Directorate.

The new Instruction also provides for detailed procedures to be followed in case of financial agreements ratified by the Albanian Parliament or grants approved by the Council of Ministers and for a specific group of exporters (classified as risk free). The steps in such cases are almost the same as described above, except that the tax audit procedure is not mandatory.

Entry into force

Instruction No. 6 dated 27 February 2014 was published in the Official Gazette No. 27 dated 10 March 2014 and enters into force 15 days after its publication date.

 

For Information

Arkadiusz Mierzejewski
Partner, Tax
Tel: +355 (4) 2274 524
Fax: +355 (4) 2235 534
arekmierzejewski@kpmg.com

Alba Paparisto
Senior Manager, Tax
Tel: +355 (4) 2274 524
Fax: +355 (4) 2235 534
apaparisto@kpmg.com

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VAT reimbursement procedures

Entry into force

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