Reconciling Back Taxes and Correcting Past VAT Returns in Albania

If you have discovered that you have underpaid VAT or missed filings in Albania, here is what you need to know about correcting your position.

Albania's Approach to Back Taxes

Albania does not have a formal Voluntary Disclosure Agreement (VDA) program the way some other countries do. Instead, Albania operates on a self-assessment model, where taxpayers can file corrected VAT returns and pay the outstanding tax plus interest before an audit is triggered.

Doing this proactively is strongly in your interest. Coming forward before the tax authority discovers an issue reduces your exposure to the upper range of penalties.

Important: Albania's Automated VAT Filing System

As of January 2026, Albania introduced an automated VAT return filing system under Law No. 79/2025. Under this law, if a VAT return is not submitted on time, the system will automatically generate a return within 24 hours using available transaction data.

This significantly narrows the window for self-correction. If you are behind on filings, acting quickly matters more than ever.

The Lookback Period

• Audit authority: The Albanian tax authority can audit back up to 5 years

• Self-correction window: Taxpayers can only file corrected returns within 3 years (36 months) of the original filing date, and only if that period has not already been audited

If more than 3 years have passed, you may no longer be able to self-correct and would need to engage with the tax authority directly.

Penalties and Interest

Albania does not have a formal penalty waiver program. However, proactively correcting your returns before an audit is initiated helps you avoid the upper range of the penalty band, which runs from 5% to 25% of the tax liability. Interest on unpaid VAT applies regardless of whether you self-correct.

How this Compares to a US Voluntary Disclosure Agreement

Albania's self-correction process is less formalized than a US VDA. There is no anonymity option, no negotiated lookback period, and no guaranteed penalty cap. The closest equivalent is simply filing amended returns before the tax authority contacts you. With Albania's new automated filing system, the window to do this quietly is closing faster than in most comparable jurisdictions.

What To Do Next

If you believe you have VAT exposure in Albania from prior periods, the best course of action is to:

1. Identify the periods where returns were missed or underpaid

2. File corrected returns as soon as possible, within the 3-year self-correction window

3. Pay the outstanding VAT plus any accrued interest

4. Consult a tax advisor for situations involving significant historical exposure

Kintsugi can help you get your filings current from this point forward. For questions about resolving historical back tax situations, we recommend working with a qualified tax advisor familiar with Albanian tax law.