The government’s proposal for the 2023 fiscal package: Guarantees trading in the organized market

Imported energy that will be traded through the Albanian Electricity Exchange will be excluded from Value Added Tax. This is one of the proposed changes to the law “On value-added tax” as part of TV SCAN’s fiscal package for 2023.

According to the report associated with the draft law, the purpose of this measure is to guarantee the trading of electricity in an organized market. More specifically, it has been proposed to exempt from VAT the import or domestic supply of electricity, chosen to be sold through the Albanian Energy Exchange, as well as the transfer of responsibility for the payment of VAT to the taxable person for whom the supply of electricity is carried out through the mechanism of reverse-charge (self-charging).

Also, the report specifies that the proposal was made by the Albanian Electricity Exchange as a result of the start of operational function by 23.11.2022. Further, the report explains how energy trading through the exchange works as an electronic trading platform, as well as the role of the exchange in billing transactions. Said that, after the announcement of the result, for all the winners in the position of seller or buyer, BSHEE is the Central Counterparty for invoicing and guaranteeing the repayment of obligations and claims related to energy sale-purchase transactions.

From transactions on the exchange, BSHEE will invoice the sale of electricity to any buyer who turns out to be a winner and the purchase of electricity to any seller who turns out to be a winner. Meanwhile, in addition to the exemption from VAT, the legal changes specify the self-charge mechanism, where VAT is charged to the person for whom the supplies are made.

To calculate the VAT, the buyer of electricity from the Albanian Electricity Exchange carries out the reverse charge of VAT in the capacity of the person responsible for the payment of it. According to the report, this policy has no net effect on the state budget as the VAT excluded on imports will be credited within the country.

Ola Mitre / SCAN

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