Value Added Tax (VAT) – Kosovo

18% VAT applies to most goods and services in Kosovo. Lower than many EU countries (20-27%). Applied to imports and domestic supplies. Businesses can deduct input VAT. Registration mandatory when turnover exceeds €30,000/year.

8% reduced VAT for essential goods: water supply (except bottled), electricity, heating, waste collection, grains, bread, milk, eggs, fruits, vegetables. Helps keep basic living costs low. Specific list defined by law.

Exports of goods and services taxed at 0% - meaning no VAT charged but input VAT fully refundable. Encourages international trade. Diplomatic/consular supplies also 0%. International transport services 0%.

Businesses must register for VAT when turnover exceeds €30,000 in calendar year. Voluntary registration allowed below threshold. Foreign businesses providing services to Kosovo consumers must register immediately (no threshold).

VAT returns filed monthly. Due by 20th of following month. Electronic filing through TAK portal. Payment due same day. Late filing penalties apply. Keep VAT records for 6 years. Simpler than quarterly in some jurisdictions.

For B2B services from non-residents, Kosovo buyer accounts for VAT (reverse charge). Supplier doesn't charge VAT. Common EU mechanism. Simplifies cross-border services. Buyer must be VAT-registered to use reverse charge.

Non-resident digital service providers (software, streaming, etc.) must register for Kosovo VAT from first B2C sale. No threshold. 18% VAT applies. B2B sales use reverse charge. Fiscal representative may be required.

VAT paid on business purchases fully deductible for registered businesses. Arises when VAT becomes chargeable. Some restrictions: yachts, private aircraft, recreational vehicles not deductible. Advertising, meals, employee transport deductible.