Netflix, Airbnb and Booking, in the VAT "network"

2025-07-12 08:42:00, Ekonomi CNA

Tax authorities have started collecting VAT from large companies such as Netflix, Airbnb and Booking.com, which provide services to Albanian citizens. These companies are now required to register and pay taxes in Albania. But will prices increase for users? What will happen to property renters on Booking.com and AirBnb?

Anyone who uses the Netflix platform and pays, for example, a fee of 9.99 euros per month, will not have their fee change even though Netflix has opened a tax subsidiary in Albania, which pays 20% VAT to the Albanian state on the income it generates from local users. Even a parent who buys electronic games for their children on the Roblox platform will continue to pay the same fee of 3.49 euros for the service.

Netflix, including other international rental companies, such as AirBnb or Booking.com, are among the first to have already registered tax offices in Albania, in order to pay 20% VAT on the income they provide from Albanian users.

VAT for the Albanian state is calculated on the commissions or fees paid by local users of these platforms and is paid by the company itself, through a tax representative registered in Albania.

So the consumer will not be charged an additional fee.

The General Directorate of Taxes (GDT) claims that during the first phase of the process, the aim is to register tax representatives of international companies whose services are used by Albanians. To identify them, the Tax Administration claims that it has used only open sources, such as the internet and the media.

The GPT clarifies that by registering subsidiaries for the purpose of collecting VAT, the Albanian user will not be affected by the increase in fees. In the case of Netflix, by registering the company's tax representative in Albania, no increase in monthly subscription fees paid by users is expected in the future, since the VAT collected by the Albanian state is predetermined and deposited by the company.

"Due to the lack of a tax representation in Albania, the Tax Administration has taken steps to force these entities to register for tax purposes, with the aim of increasing formalization and collecting revenues derived from their economic activity on Albanian territory. Although some foreign companies have registered to pay taxes in Albania, users will not pay more."

"There will be no price increase for those who have a monthly subscription to Netflix or similar services. The monthly fee remains the same, for example 9.99 euros for Netflix. No increase in fees is expected in the future, as this VAT is predetermined and deposited by the company," the General Tax Directorate explained.

The Tax Department has so far identified 24 international companies that generate income from Albanian users, for which measures are being taken to register their subsidiaries in Albania, in order to collect VAT. According to the Tax Department, the companies operate in the tourism, digital entertainment technology, independent employment and online education sectors.

The measures taken for VAT collection are based on the implementation of the law "On Tax Procedures" and on Value Added Tax. Its continuation is also being undertaken within the framework of the implementation of the priorities and measures of the Medium-Term Revenue Strategy 2024–2027, as well as the Tax Administration Strategy 2024–2028.

One of the main priorities is to reduce the VAT gap, one of the measures to achieve this objective is the formalization of online trade and services.

Earlier, through a distributed announcement, Taxes reminded international companies to fulfill the obligation to register a tax subsidiary in Albania.

Taxes, pilot project for identifying property landlords on Booking and AirBnb

After completing the first phase for the registration of tax representatives of international companies, whose services are used by Albanians, Taxes will further take initiatives to fully identify the number of Albanian landlords who generate income through AirBnb or Booking.com.

The Directorate of Investigation is drafting a pilot project to record this data through tax representatives in Albania who rent out properties on Booking or AirBnb platforms.

The project foresees that the number of landlords identified through paid commissions, for formalization, will be cross-referenced with a series of data, including declarations in the Annual Individual Income Tax Declaration (DIVA) for 2024, with the aim of withholding 15% of the withholding tax on untaxed income.

For 2024, a novelty was the obligation to declare in DIVA, even income over 50 thousand lek that an individual has earned during the year, for which no final tax was withheld at source.

Even if this individual did not have a total annual income of over 1.2 million lek (only if the income is over 1.2 million lek does the individual have an obligation to complete DIVA), but had over 50 thousand lek per year in income that was not taxed, he had an obligation to complete DIVA.

So they may not have earned a total income of over 1.2 million lek, but they have earned over 50 thousand lek and are not taxed, in which case they will have to declare DIVA.

Such income may be: Income from rental, when the lessee is an individual not registered as a commercial taxpayer, self-employed or entity; Income generated outside the territory of Albania, regardless of whether it has been taxed or not; any other income, for which the payer has not withheld tax at source, although he may have had a legal obligation to withhold tax at source.

How does the scheme for paying VAT by tax offices work?

International companies that earn revenue from users in Albania (such as Netflix, Airbnb, Booking, etc.) must pay 20% VAT on the revenue they receive here.

According to the Taxes, VAT is not collected from the citizen, but from the international company itself, through a registered representative in Albania. The Taxes clarify that VAT is paid on the commission or fee provided as income from the Albanian user.

For example, Albanian individuals who publish houses or apartments for rent on Booking.com pay the company a commission of 12% on the total monthly rental income for the service provided.

So if the monthly rental income is 524 euros, the value of the commission paid to Booking.com is calculated at 62.8 euros. On this commission provided by Albanian users, Booking.com is obliged to pay 20% VAT to Albanian Taxes, after registering the tax representative office in the country.

"For services provided by international companies, Albanian individuals pay a fee or commission. The Tax Administration requires 20% VAT on the total of this commission paid, which constitutes the income that the company provides in Albania.

The commission or fee is paid by individuals within the country. VAT is calculated every month by tax representatives registered in the country, based on the income collected from Albania on the basis of commissions or reconciliation fees,” the administration explains.

VAT revenues collected by tax offices

According to GPT data, in total for the last 4 years, namely from 2021 to 2024, 1.8 billion lek, or about 18.5 million euros of VAT, has been collected from tax representative offices of foreign companies. For 2024, VAT worth 748 million lek was collected. Compared to 2023, collections have increased by 55%.

The data shows a significant increase in tax liabilities paid by international companies that collect income through Albanian users, reflecting the effect of the measures being taken.

"Positive results have been achieved during this process, especially in the registration of tax representatives of international companies that deal with the rental of apartments."

Companies like Booking.com and Airbnb are already registered with tax representatives in Albania. Among the first to register was AirBnb, Booking.com was registered two years ago. Netflix also has a tax representative in Albania and carries out regular activities.

"Also, the administration has recently approached TripAdvisor for registration. We also have taxpayers who have notified us and are requesting that they be given time to register with a tax representative in Albania, but there are also taxpayers who have not yet responded," explains the DPT./ Monitor Magazine