From VAT to Plastics, How Much Will Albania Pay into the EU Budget? Government Prepares Draft on the “Bill” for Its Contribution After Accession

The government is preparing the legal framework for how it will calculate, plan and transfer its contribution to the European Union budget after accession. At least, that is the aim of a draft law from the Ministry of Finance that has been released for public consultation.

The draft law “On the National Contribution of the Republic of Albania to the Budget of the European Union” sets out the rules for calculating, financing, reporting and making the contribution available, as well as the responsibilities of the Albanian institutions involved in the process.

The contribution will be linked to the EU’s “Own Resources” system. The draft defines it as Albania’s contribution to the European budget, comprising “traditional own resources, the resource based on value-added tax (VAT), the resource based on gross national income (GNI)” and other resources established by EU legislation.

In its other provisions, the draft law also specifically includes the resource linked to non-recycled plastic packaging waste.

The Ministry of Finance must include in budget planning the projected value of the contribution, as well as “the fiscal space necessary to cover potential financial adjustments” and liabilities that may arise from statistical, methodological or financial revisions.

Payments will not be determined unilaterally by the Albanian authorities. According to the draft, they will be made on the basis of requests from the European Commission.

“Payments of the National Contribution for the Own Resources components shall be made on the basis of calls for funds (‘Call for Funds’),” the draft law states, adding that these notices will specify the amounts and deadlines for transfers.

A special account at the Bank of Albania is envisaged for managing the financial flows. The “National Contribution Account” will be owned by the Republic of Albania, opened and administered by the ministry responsible for finance, and used to make transfers to the EU budget.

The Ministry of Finance will serve as the National Coordinating Authority and will coordinate the institutions that produce and verify the data, carry out the relevant calculations, plan payments in the state budget and report to the European Commission.

The draft law also requires the data used for the contribution to be traceable, verifiable and documented, with records retained for up to 10 years.

INSTAT will be responsible for producing Gross National Income according to the ESA 2010 methodology and transmitting the relevant data to Eurostat.

The Customs Administration will administer and report traditional own resources, while the Tax Administration will provide data for the harmonized VAT base. The ministry responsible for the environment will cover data on non-recycled plastic packaging waste.

Another element is the creation of the National EU Own Resources Data Repository, which will be administered by the Ministry of Finance. It will collect customs, VAT, GNI and plastic-waste data, as well as methodological documentation, audit trails, corrections, unpaid liabilities and late-payment interest.

The draft also envisages consequences for late reporting or inaccurate data. Violations include failure to submit information within the deadline, reporting inaccurate or incomplete data, failure to retain documentation and failure to cooperate during audits.

The Ministry of Finance may request that violations be corrected within 15 days, while cases resulting in financial consequences will incur administrative, disciplinary, civil or criminal liability under the legislation in force.

Obligations to pay the contribution will be activated only when Albania becomes an EU member. The draft stipulates that the transfer of the National Contribution and other financial obligations “shall apply from the date of the accession of the Republic of Albania to the European Union.”

However, the institutions must establish the relevant structures, information systems, database and procedures within 24 months of the law’s entry into force.

The explanatory report accompanying the draft law states that, before accession, the contribution itself is not expected to have any direct financial effects on the EU budget.

The institutions’ additional duties are expected to be covered by their existing funds, while for the establishment of the National Data Repository and the adaptation of information systems, “the assessment of the related costs will be carried out during the later stages of implementation.”

The explanatory report links the initiative to Albania’s preparations for Chapter 33, “Financial and Budgetary Provisions,” stating that there is currently no horizontal framework defining coordination among the customs, tax, statistics, environmental and public finance administrations for managing the contribution to the EU budget./Monitor