Law. Tax. Transparency

The situation of VAT Refunds in Albania during 2008 to 2011

The level of VAT in Albania and VAT refunds in the fiscal years 2008-2011

Pursuant to the law for each year's budget, approved by Parliament, the Ministry of Finance

delivers VAT target to be collected for each year on the basis of criteria determined by

economic development, public investment and foreign funds etc., and the level of imports and

trends.

The delivering program for revenue collection, based on tax types includes three tax types, for

which the customs administration (CA) is in the agent's role in collecting them at the time of

passage of goods and services into the administrative border of the Republic of Albania.

The taxes are:

- VAT on import;

- Excise on import;

- Ores Tax on import.

Generally, the level of contribution to budget revenues collected from CA keeps the value

added tax (VAT) and excise and Ores tax.

Meantime, the Central Tax Administration (CTA), pursuant to Article 52, Section 53 under

Article 75/1 "reimbursement of taxes paid," and Article 76 of Law No. 9920, dated 18.05.2008

"tax procedures in Republic ", should make the specified actions of refund.

Law. Tax. Transparency

The table below explains the situation of VAT collected by CA and CTA and VAT refunds by CTA.

VAT collected and refunded, 2008-2010 billion Leks

No. Items 2008 2009 20101 VAT collected from CTA 34.60 35.79 35.402 VAT collected from Customs 74.93 77.37 84.793 TOTAL VAT collected 109.53 113.16 120.194 VAT refunded 2.42 3.08 6.155 Net VAT 107.11 110.08 114.046 Refunds / TOTAL VAT collected 2.2% 2.7% 5.1%

Source: Ministry of Finance, Fiscal Bulletins 2008-2010

These data we see above, the ratio of collection from VAT between the CTA and CA is 1: 3.

Meanwhile, the refund is obliged to be performed only by the CTA.

For the period 2009-2011 it was an improvement in the comparison with previous years, the

CTA has marked increase in VAT refunds. In 2011 the share of refund of VAT it was 19.7% as a

share of the gross VAT collected.

CTA's performance in the collection and refund of VAT

Since 2009, CTA began using new criteria for the selection of taxpayers for audit based on risk

in relation to check the accounts that are based the claim for VAT refund. As a result it was

doubled the amount of refunds made in 2010 versus 2009. CTA, in terms of level of refund has

committed a growing volume of VAT refunds.