VAT

VAT Exemption in Albania

VAT Exemption in Albania

What does VAT means?

VAT is an indirect tax on consumption that is financed by the final consumer. An indirect tax is the tax that is not perceived by the tax directly from the tax. VAT is charged by the seller at the time of any commercial transaction (transfer of goods or services). Vendors intermediaries have the right to be refunded the VAT they have paid other vendors that precede them in the marketing chain (tax credit), deducting the amount of VAT charged to customers (tax debit) and must deliver the difference to the Treasury. End users are required to pay the tax without reimbursement, which is controlled by the Treasury forcing the company to provide proof of sale to the end and integrate them back to the company accounts (Bird, Richard, et al, 2000, p. 753-761).

Value Added Tax (VAT) is a tax levied on the contribution of the enterprise (company) in the market value of its manufactured goods or services. Due to this method of levying the total taxes on each good or service consumed is going at all stages of production. In this sense, the VAT is not only a special kind of tax as a way to collect tax payments. Depending on how you treated amortization (depreciation of fixed capital), the VAT is equivalent to a proportional income tax expense (income value added, IVA), tax on consumption (consumption value added, CVA), or the final product, or gross value added (gross value added, GVA). Moreover, in its version of the consumption tax VAT, if it exists for a long time coming to a proportional tax on wages. These statements of equivalence are valid only if the VAT is applied in pure form (Bird, Richard, et al, 2000, p. 753-761). However, the considerations that is political in nature or related to tax administration, make the most probable deviation from the pure forms of tax (Williams, Walter, 2008). To the extent that this is the case, VAT is a special kind of tax. This fact is especially important in case of introduction of VAT by regional governments within the confederation. The first interest in VAT manifested in the 1920's, when it was seen as a kind of sales tax. Because the tax is applied only to the added value and not to the total revenue, it allowed avoiding the negative properties that were characteristic of many forms of sales tax. The main thing - to eliminate the multiple taxation of the same production costs while sales of intermediate products and final sale to the consumer (Williams, Walter, 2008). VAT is also advocated on the grounds that it provides a greater approximation to the tax on the basis of benefits received by than its main alternative - the corporate income tax. Companies use the services of the government regardless of whether they receive a profit or not. Thus, not only achieved greater equity in taxation, but also increases economic efficiency, because extent to which public services are ...