The following fiscal incentives are available to the investors in the agriculture sector:
VAT exempt for the following activities:
- Supply of agricultural machineries.
- Supply of agricultural production inputs, such as fertilizers, seeds, etc.
The compensation scheme is applied to the agriculture producers, whose inclusion in the regular VAT regime poses difficulties. For all supply of agricultural production by farmers to collecting companies or agro-processing ones, 6% of the invoiced VAT amount is reimbursed.
Exemption from VAT on import for the importation of machineries and equipment serving to:
- a) investments over 50 million ALL.
- b) investment project in the inward processing and agro-business.
- c) importation of production machineries from the business that are subject to simplified profit tax.
Ownership Transfer Tax: The tax on the right of transfer of ownership title over immovable property is imposed also on transfer of the agriculture land. The tax rate is set as a percentage and its indicative level is 2% of the property sale price.
Property tax: The owners of “agricultural land” are charged with property tax over the agriculture land. The property tax base on agricultural land is the surface of agricultural land (per hectare). The tax level depending on the categories ranges from 1800 ALL/HA up to 5600 ALL/HA. Agriculture land which are planted with fruit trees and harvest are not subject to the property tax for the first five years starting from the time of planting. Agriculture is not the sector within the focus of Law no.9374, dated 21.04.2005 “On State Aid”, as amended. However, through the Decision of Council of Ministers no.1443 “On the establishment, organization and functioning of the Agency for Agricultural and Rural Development (ARDA)”, the latter operates pursuant to Law no.9817, dated 22.10.2007 “On determining the basic criteria of the sectors that will be supported and the measures of benefit from the program fund for agriculture and rural development”.