White Book Albania 2013
usually insured in their country of origin and do not benefit from payment of social charges in Albania. (7) Appointment of tax representative for VAT purposes. According to article 15 of the VAT Law and the Instruction no. 25, dated 08.11.2011 “On VAT”, for services related to immovable property in Albania, irrespective of the annual turnover (i.e. whether the VAT threshold is met or not), the foreign entity is liable for VAT in Albania and must be registered through appointment of a tax representative or establishment of a branch depending whether the services give raise to a permanent establishment (PE) of the foreign supplier. The Instruction of Minister of Finance “On VAT” (Instruction no. 17, dated 13.05.2009), provides for examples of services related to immovable property as follows: designing, construction, reconstruction and maintenance of immovable property, supervision, expertise, renting, services from real estate agencies, etc. The tax authorities have taken a very restrictive approach in regard to determination of services related to immovable property. According to them, any service. rendered to an entity which scope of activity relates to an immovable property is considered as “related to immovable prop erty” and therefore the service provider becomes subject to VAT in Albania.
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(7) We would suggest that in the VAT instruction is clearly determined an exhaustive/ closed list of services which fall under the category of services related with immovable property. In addition, the VAT Instruction should be amended in order that the obligation for appointment of a VAT representative applies only if the value of the services exceeds the VAT registration threshold.