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Kosovo drawing up a new draft of VAT rules

Kosovo’s VAT obligations for foreign suppliers of digital services, in place since September 2015, are expected to be amended during 2020.

kosovo-vat

Kosovo’s VAT obligations for foreign suppliers of digital services, in place since September 2015, are expected to be amended during 2020.

Kosovo’s VAT rules closely resemble those that are in place in neighbouring Albania. There is also an alignment with the European Union's (EU) VAT rules.

Despite not being a member of the Eurozone Kosovo uses the euro as its currency. This means that VAT returns and payments to the Kosovo tax authority must be made in euro. Filing returns and payments in euro simplify the foreign exchange (FX) obligations for businesses that transact in other currencies, e.g. US dollar. The FX source is also the European Central Bank (ECB) similar to the EU and it can simplify any potential integration.

Kosovo VAT system information

Here's some more information on Kosovo’s VAT system:

  • The standard VAT rate in November 2019 was 18%
  • VAT returns are required on a monthly basis with the deadline for payment set at the 20th day of the following month, e.g. February 20 for January returns.
  • There is a VAT threshold, for taxpayers registered with the tax authority, that is set at €30,000. However, this threshold does not apply to foreign businesses. These businesses are taxable from their first sale in Kosovo.

PLEASE REMEMBER THAT THIS INFORMATION HAS BEEN PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT PRESENTED AS SPECIFIC TAX OR LEGAL ADVICE. ALWAYS CONSULT A QUALIFIED TAX OR LEGAL ADVISOR BEFORE TAKING ANY ACTION BASED ON THIS INFORMATION. VERTEX INC. ACCEPTS NO LIABILITY FOR ANY LOSS RESULTING FROM ANY PERSON ACTING OR REFRAINING FROM ACTION AS A RESULT OF THIS INFORMATION.