VAT Rate in Albania (TVSH) — 2026 Guide

Albania’s Value Added Tax — TVSH (Tatimi mbi Vlerën e Shtuar) — uses a 20% standard rate and a narrower 6% reduced rate. Whether you price a Tirana agency fee, reverse-engineer a shop receipt, or compare Albania with Kosovo (18%) and Italy (22%), you need the correct rate and a clean net/gross split, not a rounded guess.

Standard VAT rate: 20%

Most goods and professional services in Albania are taxed at 20%: electronics, clothing, furniture, software and consulting billed under Albanian TVSH, digital marketing retainers, ordinary B2B supplies, and most hospitality outside the reduced-rate carve-outs. When a seller lists €120 as “TVSH included” at 20%, €100 is the taxable base and €20 is tax. The customer pays €120; the seller remits €20 (net of recoverable input VAT) through the periodic return.

For freelancers and SMEs, 20% is the rate you model on domestic quotes. Do not silently swap in Kosovo’s 18% because the markets feel similar — a €1,000 net fee becomes €1,200 in Albania versus €1,180 in Kosovo, and the gap scales on larger projects.

Reduced VAT rate: 6%

A reduced rate of 6% applies only to categories defined by Albanian VAT law. Typical examples include:

• Accommodation services in qualifying accommodation structures
• Qualifying services at special-status five-star hotels and resorts
• Accommodation and restaurant services, excluding drinks, at certified agritourism businesses
• Books of all types
• Specific audiovisual advertising, licensed electric public transport, and qualifying sports-infrastructure works

Always confirm the invoice VAT code against the latest guidance from the Albanian Tax Administration. Mixing 20% and 6% on one document is normal in hospitality — subtotal by rate, never invent a blended percentage for the whole bill.

Zero-rated and exempt supplies

Exports and certain international supplies may be taxed at 0%. Other supplies — including qualifying public-interest, financial, insurance, education, healthcare, and universal postal services — may be exempt under Articles 51–56 of the Albanian VAT law. Exemption is not the same as a 0% rate: recovery of input VAT can differ, and invoice wording still matters. Cross-border service and import flows need a place-of-supply analysis; start with VAT on services (Kosovo, Albania, EU) and import VAT and customs.

Formulas: add and remove Albanian VAT

At 6% use the factor 1.06 instead of 1.20. Round to the cent and adjust the VAT line so Net + VAT equals Gross exactly. For the general arithmetic across the region, see how VAT is calculated and net vs gross.

Worked EUR examples

Strip check: a client pays €1,200 TVSH included at 20%. Net = 1,200 ÷ 1.20 = €1,000.00; VAT = €200.00. If you wrongly multiply €1,200 × 20%, you invent €240 of tax. That single mistake is how quotes and purchase-order matches drift on mid-size projects. More invoice templates: practical invoice examples.

VAT registration threshold in Albania

VAT registration is generally mandatory when annual turnover exceeds 5 million ALL. Certain professions, hospitality activities, and import situations can require registration regardless of turnover. Voluntary registration may be available below the threshold. Once registered, you charge output VAT, reclaim eligible input VAT, and file periodic returns — see how to register for VAT, VAT returns in Albania, and fiscalization in Albania.

Official source: Albanian Tax Administration — Value Added Tax.

Albania vs Kosovo vs Italy

Standard rates side by side: Albania 20%, Kosovo 18%, Italy 22%. A €1,000 net service costs €1,200, €1,180, or €1,220 respectively before place-of-supply rules change who accounts for the tax. Reduced-rate baskets also differ (Albania’s narrower 6% cases, Kosovo’s 8% essentials, Italy 10/5/4). Country detail: VAT in Kosovo, IVA in Italy, Kosovo vs Albania VAT. Freelancers: freelancer VAT in Albania.

Common mistakes

• Applying 20% to a gross figure instead of dividing by 1.20.
• Using Kosovo’s 18% or Italy’s 22% on an Albanian domestic invoice.
• Treating a VAT exemption as a 0% rate (or the reverse).
• Blending 6% and 20% lines into one incorrect average rate.
• Ignoring fiscalization / e-invoice rules once you are a registered payer.

TVSH.AL is an independent calculator and reference site, not the Albanian Tax Administration. This guide is general information only — confirm rates, thresholds, and invoice wording with official sources or a licensed accountant before filing or charging TVSH.