Draft Law on VAT, Excise Duties & National Taxes
During October 2023, the draft laws “For some additions and amendments to law no. 92/2014, “On value added tax in the Republic of Albania”, as amended; the draft law “For some amendments to law no. 61/2012, “On excise duties in the Republic of Albania”, as amended; the draft law “For some amendments to law no. 9975, dated 28.7.2008, “On national taxes”, as amended; and the draft law “For some additions and amendments to law no. 9920, dated 19.5.2008, “On tax procedures in the Republic of Albania”, as amended” were deposited in the Parliament of the Republic of Albania.
- Draft Law “On Some Additions and Amendments to Law no. 92/2014, ‘On Value Added Tax in the Republic of Albania'”, as amended.
The draft law proposes the exemption from value-added tax for the import of (i) purebred breeding animals (species: goats, sheep, cows, pigs, and poultry) and biological material used for artificial insemination, and (ii) insects (bees and others). The proposal aims to promote the import of these products to increase the number of livestock in our country, develop the beekeeping sector, stimulate organic production, and utilize innovative agricultural methods for the biological control of harmful insects.
- Draft Law “On Some Amendments to Law no. 61/2012, ‘On Excise Duties in the Republic of Albania’, as amended”
The draft law is proposed within the framework of the fiscal package 2024 and envisages indexing excise rates every two years to the extent of the inflation rate declared by INSTAT, but not exceeding 1.5%, with the exception of tobacco and its by-products (for which excise is applied according to a schedule).
- Draft Law “On Some Amendments to Law no. 9975, dated 28.7.2008, ‘On National Taxes’, as amended.
The draft law proposes an increase according to a schedule in the carbon tax for coal, as well as the inclusion of some by-products and other forms of coal in the carbon tax. The proposals come within the framework of the Albanian state’s commitments to environmental protection and mitigating climate change. The carbon tax is set at: 1.5 lek per liter for gasoline; 3 lek per liter for diesel; 3 lek per liter for kerosene; 3 lek per liter for heating oil; 3 lek per liter for fuel oil; 3 lek per kilogram for petroleum coke. Meanwhile, for coal, it is proposed to increase according to the following schedule: 3.5 lek per kilogram for the year 2024; 4.5 lek per kilogram for the year 2025; 6 lek per kilogram for the year 2026; 8 lek per kilogram for the year 2027; 10.3 lek per kilogram for the year 2028; 12.8 lek per kilogram for the year 2029; 15.3 lek per kilogram for coal for the year 2030 and beyond.
Draft Law on Tax Procedures
- Draft Law “On Some Additions and Amendments to Law no. 9920, dated 19.5.2008, ‘On Tax Procedures in the Republic of Albania’, as amended.” The draft law proposes:
- Inclusion in the tax procedural law of provisions for the establishment of the necessary legal framework for the exchange of reports for each country (country-by-country report) – within the framework of the implementation of the international project “BEPS”, of which Albania has been a part since 2019. The report for each country, prepared for multinational enterprise groups with total consolidated group revenue of over 105 billion lek, is submitted by the entity that is tax resident in the Republic of Albania and prepares the consolidated financial statements of the multinational enterprise group. This report contains data related to the economic activity of the group, such as: total revenue, profit (loss) before income tax, income tax paid, income tax accrued, declared capital, accumulated earnings, number of employees, and tangible assets, for each country/jurisdiction in which the multinational enterprise group operates.
- the setting of a deadline within which the decision of the Tax Appeal Directorate or the Commission for Tax Appeal Review must be implemented by the tax administration;
- the regulation of the form of calculation of penalties for non-payment of corporate income tax and personal income tax, in accordance with the principle of proportionality, based on which the penalty should be commensurate with the effect of the non-payment on the state budget within the tax obligation deadline;
- the imposition of appropriate penalties related to the untimely submission of documentation for the implementation of provisions of agreements for the avoidance of double taxation and the country-by-country report, in accordance with the provisions of the law;
- Maintaining the proportionality of penalties in accordance with the tax violation, related to violations for non-issuance of invoices and accompanying invoices, by the taxpayer;
- the compatibility of the terminology used in this law with the terminology used in the law “On income tax”.
