Kosovo - VAT Amendments to Comply with EU Law

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Kosovo’s government has published a draft law containing amendments that would further align the country’s VAT legislation with the EU VAT directive, in light of Kosovo’s efforts to become a member of the EU.

Changes include:

- The introduction of new payment procedures and the deferment of VAT on imports

- The introduction of a flat-rate scheme for the agricultural sector

- A reduction in the VAT rate for public transport and milling services to 8% (standard rate 18%)

- A reduction in the minimum threshold for VAT input credit refund claims from EUR 3,000 to EUR 1,000

- A change in the VAT rules regarding bad debts, providing that an amount would not be considered a bad debt for VAT purposes unless collection procedures are initiated within 24 months from the payment deadline

- The introduction of new VAT compliance penalties ranging from EUR 1,000 to EUR 50,000

Subject to approval in parliament, the changes are to apply from 1 January 2019.

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