Ministry of Finances outlines new penalties on VAT violations

By Gajtis Bejleri
TIRANA, June 23 – The Ministry of Finances has issued guidelines concerning fines and penalties for businesses failing to pay or declare their VAT taxes. The punishable offences include not issuing sale receipts, as well.
Opposed to their Balkan and European counterparts, most Albanian businesses, except for bars and restaurants, tend not to issue sales receipts to customers. A law on VAT, passed in 1996, provides that a sales receipt is to be issued by all businesses upon the sale of goods and services. However, the law was never followed.
The new guideline provides for forcing a business to issue receipts if it is found not to be doing so. Moreover, the business will have to pay the VAT of the goods and services sold without a receipt and a fine amounting to the value of the VAT. When the offence is repeated, the Ministry of Finances authorizes the Tax Authorities to confiscate goods and other materials with the purpose of closing of the business.
Further, the law states amounts for fines to be issued to businesses that fail to declare or pay their taxes. If the amount of the VAT is not declared within 15 days or is misrepresented, the fines amounts to 20 percent of the VAT value, or no less than ALL 10.000 when the VAT is less than ALL 50.000. If the period amounts to 30 days, the fine will be half of the VAT value, or no less than ALL 25.000.
In cases when a business fails to pay all or part of the VAT obligations within 15 days, the fine will amount to 20 percent of the amount remaining to pay, or 50 percent of the amount left to pay if the delay continues to 30 days. All these fines include late payment interest rates as well, which account for two percent of the VAT amount for the first month, and one percent for each of the subsequent months.
As for when the VAT obligation is declared and paid in lesser amounts than the actual VAT, the business is subject to a fine of 50 percent of the undeclared and unpaid amount.