The proposal changes the VAT scheme for farmers - What is foreseen for the sale and purchase of agricultural products?
The current VAT scheme has created significant inequality between local farmers and other economic operators operating in the same market, increasing informality. For this reason, socialist MP Erion Braçe, several years after the application of this scheme, according to which VAT is withheld at a rate of 20% on sales, while purchases by farmers are made at 0%, proposes a new mechanism for calculating VAT in cases where auto-invoicing transactions are carried out between farmers and taxable persons.
According to the report accompanying the draft law, the discrimination of domestic products in relation to imported ones, which are charged with VAT at a rate of 20%, creates an undeserved advantage for foreign products and harms competition for collectors of domestic products.
Specifically, the draft law proposes an addition to Article 69 of the existing law on Value Added Tax, which states that "The taxable person has the right to deduct from the VAT calculated for taxable transactions the VAT calculated on the final value of the transaction for the purchase of agricultural, livestock, (plant, animal), fishery, forestry products by the taxable person to farmers with self-invoicing."
In this case, the "final transaction value" is the value for all these products, in the transaction of purchasing products from farmers, documented with a legal invoice agreed upon between the parties, which includes the value of VAT.
VAT is calculated by dividing the "final transaction value" by the coefficient 1/6.
Auto-invoicing will be applied to agricultural producers exempt from the VAT scheme up to the limit set by law.
This proposal aims to unify the VAT scheme, formalize the circulation of agricultural products; Increase VAT collection through the formalization of the internal market for agricultural products and combat informality. Guarantee fair competition and fair taxation, by regulating the auto-invoicing scheme for processors of main products (milk, meat, vegetables, olives, cereals, etc.).
Referring to the relationship, the scheme applied so far, with a VAT rate of 0% on purchases and 20% on sales for agricultural products, has increased informality in the sector, discouraging full declaration of economic transactions and harming farmers.
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