ALBANIAN TAX INSIGHT – CHANGES AFFECTING YOUR BUSINESS IN ALBANIA FOR YEAR 2017

Read our summary of changes in the tax and related regulations affecting your business in Albania for year 2017. Changes include new laws and key amendments introduced during the year 2016 for: VAT, Social Securities, Excise and Tax Procedures. In addition new and amended IFRS-s have been published in Albanian language, several changes in the audit law and there is a new National Accounting Standard for Micro-entities (NAS 15).

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ALBANIAN TAX INSIGHT – THIN CAPITALIZATION RULES

Starting from 1 January 2018, in determining the amount of interests as deductible for CIT purposes, the 4:1 debt equity ratio will no longer be used. The amount of “surplus interest expenses” exceeding 30% of the EBITDA (earnings before interest, taxes, depreciation and amortisation) will now be considered as non-deductible for CIT purposes.

 Surplus interest expenses is the difference between the interest expenses and interest income.

 Interest expenses not deducted as per the above requirements are carried forward for future tax periods, provided that not more than 50% of direct or indirect ownership of the share capital or voting rights of the company are transferred.

 The thin capitalization rules do not apply to banks, non-banking lending financial institutions, insurance and leasing companies

ALBANIAN TAX INSIGHT – TAX AMNESTY 2017

The Albanian Parliament passed the Law The Law No. 33/2017 dated 30 March 2017 “On the payment and waive of the tax and customs liabilities, and deregistration of the automobiles from circulation after the deletion the tax liabilities” published in the official gazette No. 85, dated 21 April 2017 which will be entered into force starting from 6 May 2017

Such amnesty law provides incentives for reporting and settling any outstanding tax, social security or custom duty liability and related penalties and default interests.

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