VAT cash Accounting. The opportunity of implementation in Albania

 MSc. Ikbale Tota, MSc. Juliana Imeraj, MSc. Jonida Lamcja
University “Aleksandër Moisiu”, Durrës


In Albania, VAT is accounted on accrual basis. Meanwhile as Albania aims to be a member of EU, this will be accompanied with amendments of the tax legislation in order to implement EU Directives, among which the EU VAT Directives (2006/112/EC and 2010/45/EU). The latest directive defines the optional use of VAT cash accounting in order to help small and medium enterprises. Under the VAT cash accounting scheme businesses account for VAT on the basis of payments received and made, rather than on invoices issued and received. This article considers the main principles of VAT cash accounting, advantages and disadvantages of this scheme. It also considers the possible effect on businesses operating in Albania.

Keywords: Vat, Vat cash accounting, Vat accrual accounting