Albania published Law no. 83 of 2022 in the Official Gazette on 21 December 2022, which contains amendments to the Law on Tax Procedures. The law entered into force on 1 January 2023.
One of the main amendments is the introduction of new rules on the use of alternative assessment methods in cases of tax avoidance and abuses of tax law principles. This includes that, in calculating taxable income and profit, the tax administration may ignore an arrangement, or a series of arrangements concluded between taxpayers that have the obtaining of a tax advantage/benefit as their main purpose or one of their main purposes. Such arrangements for tax purposes will be treated with reference to their economic substance.
To determine whether an arrangement or a series of arrangements lacks economic substance, the tax administration examines whether one or more of the following situations exist:
To determine whether an arrangement or a series of arrangements has obtained a tax benefit, the tax administration compares the amount of tax that a taxpayer is obliged to pay, taking into account the arrangement, with the amount that the same taxpayer would be bound to pay under the same circumstances in the absence of such an arrangement. For the purpose of the new anti-avoidance rule, the burden of proof rests with the tax administration.
Other important measures include the amendment of certain tax penalties, which are set as follows:
Failure to pay the advance installments of corporate profit tax and personal income tax from business and self-employment is punishable by a fine of 10% percent of the amount of the installment to be paid plus the late interest calculated for the delayed days, but not more than 365 days.
Taxpayers that fail to maintain accurate books, records, and documentation as required by the law are subject to a fine of ALL 10,000 for each violation if a natural person, and ALL 50,000 if a legal person.
Taxpayers who keep in storage, use, or transport goods not accompanied by tax documents are penalized as follows:
Taxpayers that fail to issue invoices for the second time in a year are subject to a fine of ALL 50,000 for natural persons, ALL 100,000 for natural persons registered for VAT, and ALL 500,000 for corporate taxpayers.
A taxpayer that directly or indirectly obstructs a tax audit or investigation by the tax administration is subject to a fine of ALL 100,000 for taxpayers classified as commercial or self-employed natural persons, and ALL 1,000,000 for legal entities and high-asset individuals.
Employers that fail to correctly declare the salary of their employees are subject to a fine equal to 200% of the undeclared amount if a legal entity, and 100% of the undeclared amount for other taxpayers.