Who benefits from VAT compensation in agriculture? - Instruction/ Farmers must keep sales receipts, tax application
Farmers must collect all invoices for the sale of agricultural products from collectors in order to benefit from the 10% VAT compensation measure. The detailed instructions of the Ministry of Finance clarify how the scheme will be implemented.
Referring to the instruction, the collector, a taxable person registered for VAT, for each supply of agricultural products received from the farmer issues a fiscalized tax invoice in which it records as the seller, the farmer seller, the farmer's NIPT and other data required according to the invoice.
This invoice, which does not include VAT, is issued by the buyer at the time of delivery of agricultural products by the farmer.
The total invoice value represents the value of the supply paid by the collector on behalf of the farmer seller, on which the compensation rate is applied.
The request for VAT compensation will be made by farmers by December 31, for supplies made during the January-June period of the respective year and by June 30 of the following year, for supplies made during the July-December period of the previous year.
The farmer, through postal service or electronically, submits to the tax administration the standard request for compensation. The request must contain the total value of the invoices issued during the compensation period, as well as the farmer's bank account number.
This request is also accompanied by copies of invoices issued by the buyer which must be signed by the seller-farmer.
But who benefits from compensation? To benefit from compensation, farmers must meet certain conditions.
Specifically, the annual turnover must not exceed the minimum VAT registration threshold; have made supplies of agricultural products; have supplied taxable persons who do not benefit from the compensation scheme in the Republic of Albania, who are registered for VAT and carry out activities as a collector and/or processor of agricultural products or agrotourism certified according to the legislation in force on tourism; have been provided with a taxable person identification number; the invoices received from the buyer, on the basis of which compensation is requested, are fiscalized and registered in the database of the central tax administration.
The 10% compensation rate is applied to the value of the tax invoice(s) that the collector has issued to the farmer, during the six-month period for which compensation is requested.
The compensation aims to cover a portion of the VAT paid by farmers on the purchase price of goods and services purchased for the purposes of carrying out their agricultural production activity.
The tax administration conducts the relevant verifications and within 30 days pays the compensation amount directly to the farmer's account.
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