Albania: Changes To Tax Procedure Law

Last Updated: 7 December 2016
Article by Adriana Puleshi

1. Changes to Tax Procedure Law

Law no.112/201, dated 3.11.2016 "On some Additions and amendments to the Law no.9920, dated 19.05.2008 "On Tax Procedures", as amended" was adopted by the Albanian Parliament and is already published on 15 November 2016 in the Albanian Official Gazette. This law becomes effective 15 days after its publication except for some specific articles regarding the changes to the structure of the tax administration, tax appeal and articles related to the Taxpayer's Advocate that will become effective as of January 1, 2017. Some of the main changes are as follows:

  • Electronic money payment is considered a new payment method for purposes of tax compliance:

i. Taxpayers which will perform e-money payments through e-money institutions licensed by the Bank of Albania will not have the obligation to install fiscal cash registers and issue fiscal coupons;

ii. The e-money transactions performed through the platforms of e-money institutions, duly licensed by the Bank of Albania, are not considered as cash payments;

iii. Any taxpayer may pay the own tax liabilities also through electronic instruments provided by duly licensed financial institutions that have entered into specific relevant agreement with the tax administration.

  • Role of Taxpayers' Advocate:

i. Taxpayers' Advocate becomes a body under the dependency of the Ministry of Finance and is subject to civil servant legislation;

ii. Taxpayers' Advocate has the power to issue systemic recommendations with regard to issues identified during the exercise of its functions;

iii. Upon the request from a taxpayer, Taxpayers' Advocate has the right to recommend to the General Tax Directorate to issue technical decisions.

  • Changes related to tax appeal:

The Tax Appeal Directorate becomes part of the organigram of the Ministry of Finance with independent decision-making functions and which takes decisions on tax administrative appeals up to a specific amount as will be determined by a Decision of Council of Ministers. For the appeal of the tax claims above the threshold to be provided by the relevant Decision of Council of Ministers, a new body is established under the dependency of the Ministry of Finance which is named the Commission for the Assessment of Tax Appeals. This body will be composed of 7 (seven) members coming from the Ministry of Finance, General Tax Directorate, Director of Tax Appeal Directorate, and the institution of State Advocate.

2. Changes to the Law on Securing Charge

Law no.101/2016 dated 20.10.2016 "On some changes and addition to the Law no.8537, dated 18.10.1999 "On securing charge", as amended", was adopted by the Albanian Parliament and is already published in the Albanian Official Gazette on 4 November 2016 and becomes effective 15 days after its publication.

The new Amendment intends to reinstate once again the concepts abrogated with the Law 132/2013 and to bring back the relevant legal provisions almost to the original version of this law on securing charge.

Thus, such concepts as 'intangible property', 'titles', 'financial instruments', 'accounts' are reintroduced in the body of the existing provisions of Law on Securing Charge.

3. Changes to Civil Procedure Code

Law no.114/2016 dated 3.11.2016 "On some changes and additions on the Law no.8116, dated 29.3.1996 "Civil Procedure Code of Republic of Albania", as amended" was adopted by the Albanian Parliament and is already published on 15 November 2016 in the Albanian Official Gazette and becomes effective 15 days after its publication. Some of the changes to the Civil Procedure Code aim to align its provisions with the new Law on Bankruptcy, and one of the most important change is related to statutory limitation period of 30 days which is provided for the debtor to request from the court to declare the invalidity of the executive title or that the liability does not exist or that it is extinguished.

4. A new Law on Bankruptcy is approved

A new Law on Bankruptcy no.110/2016 dated 27.10.2016 was adopted by the Albanian Parliament on 27 October 2016. The new Law will become effective 6 (six) months after the publication in the Albanian Official Gazette. This new Law regulates only the procedures that will be initiated after the law becomes effective.

Some of the major changes provided by the new Law are as follows:

  • The new Law provides for special ranking of claims applicable in the bankruptcy process, where the distribution of bankruptcy estate satisfies before all the secured claims up to the value of the property used as collateral and prior to the repayment of preferred creditors, such as tax authorities, etc.;
  • Provides for the possibility of an out-of-court agreement between the debtor and creditors for an accelerated reorganization;
  • The new Law abrogates Article 104 of the Law no. 9920, dated 19.05.2008 "On tax procedures in the Republic of Albania", as amended, which provided for the right of the tax administration to initiate bankruptcy procedure for taxpayers which are commercial companies, even in the cases where tax administration did not qualify as a bankruptcy creditor.

5. Changes to Civil Code

The Law no.113/2016 dated 3.11.2016 "On some additions on the Law no.7850, dated 29.7.1994 "Civil Code of the Republic of Albania", as amended" was adopted by the Albanian Parliament and was published on 15 November 2016 in the Albanian Official Gazette and becomes effective 15 days after its publication. One of the major changes is that the ranking of creditor's claims as provided by Article 605 of the Civil Code does not apply to the bankruptcy procedure which is regulated by the special Law on Bankruptcy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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