A recent amendment to the existing Article 41 of the Instruction no.6, dated 30.01.2015 "On VAT in the Republic of Albania" as amended, has been adopted by the Minister of Finance with the Instruction no.13 dated 17.05.2016.
An important principle of the existing VAT legislation concerning VAT exemption of the specific financial services only when such services are supplied by duly established and licensed financial institutions in the Republic of Albania, has been affected with this recent change.
Therefore, according to the new Article 41 of the VAT Instruction are exempted from VAT the financial services expressly and exhaustively set forth in the relevant Article 53 of the Albanian VAT Law, regardless whether such transactions are performed or not from a financial institution. In addition, any other transaction which is not expressly provided in the Article 53 of the VAT Law, whether it is supplied by a bank or financial institution or it is supplied to a bank or financial institution will be not exempted from VAT.
To conclude, the application of VAT exemption is directly linked to the nature of the services and not to the entity or the service provider or the person who receives the service. Also, it is not relevant to the exemption if such service is offered by electronic means, manually or automatically.
The Instruction no.13 dated 17.05.2016 is effective as of May 30, 2016.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.