Instruction No. 16 on fiscalization

Instruction No. 16 from the Minister of Finance and the Economy “On invoice and turnover monitoring system,” dated 3 April 2020 and published in the official gazette on 10 April 2020, provides guidance on the implementation of the law on fiscalization (“the law”). This article covers only the provisions of the instruction that determine how the principles of the law are to be implemented in a more specific way or in special circumstances. It does not cover provisions of the instruction that merely duplicate or explain the provisions of the law.

Entry into force

The provisions of the instruction will be implemented gradually, following the same deadlines as for the implementation of the provisions of the law (which were postponed from their initial deadlines by a law published in the official gazette on 7 August 2020). The deadlines are:

• 1 January 2021 for B2G cashless transactions;
• 1 July 2021 for business-to-business (B2B) cashless transactions; and
• 1 September 2021 for all cash transactions (B2G, B2B, and business-to-consumer (B2C)).

Scope

The instruction sets forth the rules and procedures for the issuance of invoices and the implementation of the fiscalization procedures, in accordance with the provisions of the law. The purposes of the provisions in the instruction are to clarify the provisions of the law and to set forth the procedures for the proper and consistent implementation of the law.

Taxpayers not required to issue electronic invoices

In line with the provisions of the law, the instruction provides further guidance on two of the categories of taxpayers that are exempt from the obligation to issue electronic invoices:

• Although taxpayers providing public transport are not required to issue an invoice in accordance with the fiscalization requirements for sales of tickets in vehicles, they must notify the tax authorities of the total amount of tickets sold each day by the end of the following day, through a summary fiscalized invoice.
• Based on the law, taxpayers making supplies that qualify for a VAT exemption under the law on VAT will be exempt from the obligation to issue electronic invoices. The instruction clarifies that taxpayers falling within this category are those providing VAT-exempt supplies in accordance with article 53(a) to (e) of the law on VAT.

Invoice elements

The instruction provides further details on the elements an invoice must have to comply with the requirements of the law. Among other elements, it provides details on the following:

• Payment methods: The payment method is one element of an invoice. For fiscalization purposes, payment methods are divided between cash payments (those made through coins, banknotes, debit/credit cards, taxpayer cards, single-purpose vouchers, etc.) and cashless payments (those made through transfers from a bank account; set-offs of receivables against payables, write-offs of bed debts, clearing, factoring, etc.). It is not possible to issue an invoice for a combination of cash and cashless payments.
• Invoice number: There are three methods for assigning the invoice number. The taxpayer should select the method that is most appropriate for its circumstances.

Fiscalization procedure for sales invoices

Based on the law and the instruction, taxpayers will be required to follow the fiscalization procedure for all sales invoices. The instruction provides further details on the fiscalization of sales invoices, including the format of the messages to be exchanged with the tax authorities and the controls the tax authorities will carry out, which include real-time controls and secondary controls.

The errors that may be discovered through real-time controls include the following:

• Technical errors that should be corrected by the software provider;
• Material and substantial errors that should be corrected by the taxpayer; and
• Errors due to server connections that require the fiscalization procedure to be repeated.

In the case of errors identified through real-time controls, the fiscalization procedure will not be considered as finalized and the tax authorities will not issue the NIVF code (the unique identifying number for the invoice) until the error is corrected. In contrast, a NIVF code will be generated in the case of errors discovered through secondary controls, but the taxpayer still has an obligation to correct the error identified.

Fiscalization procedure for fiscal invoices/orders

The instruction provides specific rules for the issuance of a “fiscal invoice/order” and its use. In cases where the taxpayer carries out different activities at the same address (for example, a hotel that also has a restaurant, spa, nightclub, etc.) and the customer pays for all services at the time of departure, the taxpayer must issue separate fiscal invoices/orders at the time of each supply of goods or services and each invoice must list “order” as a method of payment and be titled “fiscal invoice/order.” When the customer pays, the taxpayer must issue a summary invoice with reference to all the separate invoices issued and fiscalized. The fiscal invoices/orders included in the summary invoice will not be recorded in the taxpayer ‘s sales ledger. The summary invoice will be recorded in the sales ledger and will be used for the purpose of calculating VAT.

Fiscalization procedure for single-purpose vouchers

Taxpayers that supply or resell single-purpose vouchers (for example, fuel supply vouchers) must issue an invoice and fiscalize it when the voucher is issued and for each resale of the voucher. The invoice may be printed on paper or sent electronically. The voucher number will be assigned based on the NIPT (tax identification number) of the issuer, the year of issuance, and the serial number of the voucher.

When a single-purpose voucher (which is declared in the sales ledger of the issuer and fiscalized at the time it is sold by its issuer or voucher reseller) is used for a supply of goods or services by the final consumer, the recipient of the voucher (i.e., the taxpayer that supplies the goods or services) must issue and fiscalize a sales invoice and list “single-purpose voucher” as the method of payment, along with the voucher’s serial number. The invoice will not be taken into account for purposes of the VAT calculation in the buyer’s purchase ledgers or the seller’s sales ledgers.

Fiscalization procedure for purchase invoices

Specific rules apply for services rendered by nonresidents and for imported goods:

• Services rendered by nonresidents: Taxpayers subject to VAT, corporate income tax, or the simplified profit tax on small businesses must fiscalize, through the central invoicing platform, each invoice received from nonresident service providers. The foreign invoice data will be available in the taxpayer’s account in the central invoicing platform and the data will be exchanged through the platform in compliance with the Albanian standards. The Albanian buyer, after accepting the invoice, also must add a description of the services in the Albanian language directly in the platform, as well as the code of the place where the economic activity is conducted for which the services are provided. The resident taxpayer must calculate the VAT and declare the invoice it issued as a “reverse-charge” invoice, in accordance with the law on VAT.
• Imported goods: The fiscalization procedure for imports of goods must be carried out through the central invoicing platform by the taxable buyer of the goods within three days of the goods entering free circulation. The taxpayer’s account in the central invoicing platform will display the data from the invoice of the foreign supplier based on the customs declaration, and the taxpayer must fill in the missing data, i.e., the seller’s name, address, tax identification number, the type of invoice (paid in cash or through a cashless payment), etc. and carry out the fiscalization procedure.

VAT ledgers and returns

The instruction provides the procedures that should be followed to amend purchase and sales ledgers.

Based on the instruction, the taxpayer may include additional information in the VAT ledgers when the need arises, but cannot make any changes to the invoice data or the invoice amounts. If the invoice data or amount is not accurate, the seller must issue a corrective invoice.

If the buyer rejects an electronic invoice, the invoice will be automatically deleted from the purchase ledger of the buyer in the central invoicing platform, but it will remain in the sales ledger of the seller. The seller must issue a corrective invoice that will offset the value of the original invoice rejected by the buyer. The corrective invoice will be registered in the seller’s ledger only (and not included in the buyer’s ledger) in the month when the corrective invoice is issued.

The VAT return in the existing “e-tax” platform will be populated automatically from the data registered in the VAT sales and purchase ledgers.

Special provisions of the fiscalization procedure

The instruction provides specific guidance on various situations that taxpayers may encounter:

• Interruption of the internet connection: If the taxpayer is disconnected from the internet and cannot restore access within 48 hours, the taxpayer must notify the tax authorities using the form “Reporting the impossibility of establishing a connection with the fiscal service.” This form, along with documentation supporting the reason why an internet connection cannot be established, may be delivered through the central invoicing platform or in person at the office of the relevant tax authority. After the notification to the tax authority, the taxpayer may continue to issue invoices in offline mode (without performing the fiscalization procedure and by issuing invoices without the NIVF code) until the connection is re-established. Once the internet connection is re-established, the taxpayer must fiscalize the invoices that were issued in offline mode, for which the fiscalization procedure was not carried out, no later than the 10th day of the following month.
• Malfunction of the fiscal device: In the case of a malfunction of the “fiscal device” (an electronic device for issuing invoices), taxpayers will be required to issue invoices in duplicate from a special block of invoices, printed in line with the Decision of the Council of Ministers (DCM) “On printing tax documentation.” Such invoices must be issued by the taxpayer without the NIVF code and the “NSLF code” (the unique number attached to each invoice generated by the invoicing system of the taxpayer) and the words “Interruption of work of fiscal equipment” should be written on the invoice. In addition, the initial balance of cash on hand at the beginning of each working day, as well as changes in the cash balance during the day, must be noted in the special block of invoices.
• No internet connection available: Specific rules are provided for the application of the fiscalization procedure for taxpayers operating in areas where no internet connection is available. The taxpayer must notify the tax authorities that an electronic connection (internet) cannot be established for the exchange of data with the tax authorities’ information system. The notification must be sent at least 24 hours before the taxpayer begins issuing invoices, via the central invoicing platform or by submitting the form “Information on the place of business” in person or by mail. In addition, the taxpayer must submit documentation supporting that an internet connection cannot be established, such as confirmation from the internet providers operating in the territory, etc. The invoices issued from business places with no internet access should be marked “Works in offline mode.”

Other guidance on the implementation of the law

To clarify and further explain some of the provisions of the law, the additional guidance described below has been published.

DCM No. 220

The decision “On determining the category of taxpayers and the criteria for using the simplified fiscalization procedure,” dated 12 March 2020 and published in the official gazette on 19 March 2020, provides that taxpayers carrying out cash and/or cashless transactions that fulfill all of the following criteria may follow a simplified fiscalization procedure:

• The taxpayer is not subject to VAT;
• The taxpayer has not been penalized in the last three years in relation to a failure to issue invoices; and
• The taxpayer has no more than one place of economic activity.

Under the law, taxpayers eligible to use the simplified fiscalization procedure will be able to issue invoices directly from the central invoicing platform and are not required to install any software solution or fiscal device.

DCM No. 239

The decision “On the technical and functional requirements of the software solution for the invoicing and fiscalization procedure, as well as the procedure and criteria for the registration of producers and maintainers of software solutions,” dated 20 March 2020 and published in the official gazette on the same date, sets forth the technical and functional conditions and registration criteria for developers and providers of software solutions.

Instruction No. 20

The instruction “On basic and technical elements, issuance and exchange of electronic invoices and accompanying invoices,” dated 1 June 2020 and published in the official gazette on 4 June 2020, sets forth the following:

• The basic and technical elements of an electronic invoice and an “accompanying invoice” (an invoice issued to support the transportation of goods from one place to another within Albanian territory, where there is no change of ownership);
• Requirements for issuers and recipients of electronic invoices and accompanying invoices;
• Procedures for issuing and exchanging electronic invoices and accompanying invoices; and
• Procedures for receiving and sending messages for electronic invoices in accordance with the law.

DCM No. 431

The decision “On the central invoicing platform,” dated 3 June 2020 and published in the official gazette on 8 June 2020, sets forth the rights and obligations of the National Agency for Information Society (NAIS) regarding the connection and presentation of information relating to issuers and recipients of electronic invoices in the central invoicing platform.

Instruction No. 24

The instruction “On registration of payments of electronic invoices,” dated 16 June 2020 and published in the official gazette on 22 June 2020, sets forth the technical elements for recording electronic invoice payments, as required by the law, for cashless transactions between taxpayers and cashless transactions between taxpayers and public bodies.

Source: Deloitte