Legal Insight: New Compliance Requirements for International Companies Providing Electronic Services in Albania

Issued by: CLO Legal Solutions
Date: May 2025

Background

In alignment with the Medium-Term Revenue Strategy 2024–2027 and the Tax Administration Strategy 2024–2028, the Albanian General Tax Directorate has issued an official notice to international companies that provide electronic services to non-taxable persons (individuals or unregistered entities) within the territory of the Republic of Albania. This notice is part of a broader effort to increase fiscal transparency, broaden the tax base, and promote voluntary compliance.

Legal Basis

The requirements are grounded in:

• Law No. 92/2014 “On Value Added Tax (VAT)”, as amended, specifically Articles 29, 86, and 87.

• Law No. 9920 “On Tax Procedures”, Article 9.

These provisions mandate that foreign service providers offering electronic services to non-taxable persons in Albania must comply with local VAT obligations.

Scope of Affected Services

The following services fall under the definition of electronic services, when delivered to non-taxable persons in Albania:

• Telecommunications and broadcasting services;

• Website hosting and remote IT maintenance;

• Software supply and updates;

• Provision of digital content (texts, images, databases);

• Streaming music, films, games, and event broadcasts;

• Online gambling and betting;

• E-learning and distance education services.

Key Obligations for Foreign Companies

Foreign companies offering such services are now legally required to:

1. Appoint a Tax Representative in Albania;

2. Register for VAT purposes in Albania;

3. Charge Albanian VAT at 20% on sales to non-taxable persons;

4. File periodic VAT returns and remit the corresponding tax through their appointed representative.

✅ Note: If the services are offered to taxable persons registered for VAT in Albania, the obligation to account for VAT shifts to the customer via the reverse charge mechanism—in this case, no tax representative is required by the foreign supplier.

Legal Risks of Non-Compliance

The Tax Administration has clearly stated that failure to comply within a reasonable time frame will result in:

• Initiation of legal and administrative measures;

• Imposition of penalties as per the tax procedure law;

• Possible restrictions on business operations involving Albanian customers.

How CLO Legal Solutions Can Assist

CLO Legal Solutions offers end-to-end legal and tax compliance support for foreign businesses entering or operating in the Albanian digital services market, including:

• Legal assessment of service offerings for VAT exposure;

• Appointment and representation as Tax Representative;

• Full assistance with VAT registration, compliance, and filings;

• Ongoing advisory on tax legislation changes and obligations;

• Communication and representation before the Albanian Tax Authorities.

Conclusion

The Albanian Tax Administration is taking active steps to align with EU VAT standards and ensure a fair digital economy. Foreign digital service providers should act promptly to avoid administrative sanctions and ensure legal continuity in the Albanian market.

For tailored legal advice or assistance with registration and compliance procedures, contact CLO Legal Solutions today.

Contact Information
CLO Legal Solutions
“Bajram Curri” Boulevard, Building No. 110, 5th Floor, 1022 Tirana, Albania
Email: info@cenameri.com
Phone: +355 42 220 022 | WhatsApp: +355 67 600 0020
Website: www.cenameri.com

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Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Consult CLO Legal Solutions for tailored guidance on your specific circumstances.