Albania: Tax News - Fiscal Package 2016

Last Updated: 27 May 2016
Article by Olindo Shehu

We have presented below some of the most important amendments brought by the Fiscal Package of 2016, published in two different Official Gazettes: the Official Gazette no. 244, dated 11.01.2016 and no. 252, dated 22.01.2016. Almost all of these changes enter into force as of 1 January 2016.

I. Amendments to the law no. 9975, dated 28.07.2008 "On national taxes", as amended (in force as of 1 January 2016)

Royalty tax on non-metal minerals

According to appendix 2 of the amended law, royalty tax for the major part of the minerals of Group III "Coal and bitumen" and of group IV "Minerals and constructing materials" is determined in ALL per quantity of mineral sold. Previously, royalty tax for these minerals was determined as a percentage of the wholesale price.

Tax on insurance premiums

Tax on insurance premiums, except for insurance premiums on life products, travel health insurance and the green card police, increases from 3% of the premium value to 10% of the premium value.

Taxation on luxury cars

A vehicle with a capacity of 4+1, which meets at least one of the following conditions, will be considered a luxury vehicle:

  • Cylinder equal or more than 3,000 m3;
  • Price/value equal or more than ALL 7,000,000.

Luxury vehicles will be subject to two new taxes:

  • Initial registration tax of ALL 70,000 and;
  • Annual tax of ALL 21,000.

The law provides also a list of exemptions from payment of the initial registration tax and the annual tax.

II. Amendments to the law no. 9632, dated 30.10.2006 "On local tax system", as amended (in force as of 1 January 2016)

Simplified profit tax on small business

  • For taxpayers with annual turnover from ALL 0-5 million, the simplified profit tax on small business will be zero ALL per year (previously, for taxpayers with annual turnover from ALL 0-2 million, it was ALL 25,000 per year).
  • For taxpayers with annual turnover from ALL 5-8 million, the tax rate of simplified profit tax on small business will be 5% of the taxable profit (previously, for taxpayers that generate an annual turnover from ALL 2-8 million, the tax rate of simplify tax on small business was 7.5% of the taxable profit, but not less than ALL 25,000 per year).

The declaration procedure for taxpayers with annual turnover from ALL 5-8 million remains the same. Meanwhile, taxpayers with annual turnover from ALL 0-5 million, should declare within the same deadline but upon a procedure to be provided by an expected Instruction of the Minister of Finance.

Amendments related to the territorial and new administrative reform in Albania

In the context of the new territorial reform (please refer to our Legal News of May 2015), the previous local administrative sub-divisions 'communes' have been abolished. Such amendment is reflected in the law through revising the labels of the annexes that determine the rates of tax on buildings, transfer tax, the tax on occupation of public areas, table tax and hotel accommodation tax.

Property tax on construction land

The amended law adds as object of the property tax also the "construction land" (non-agricultural and non-public property land, approved for building on it). The tax base is the surface of the construction land in square meters, under ownership or use. The tax rates are determined in annex 2.1 of the law and are expressed in ALL/m2/year. Construction land tax is determined according to four categories of local government units and the tax rates vary between 0.14-0.56 ALL/m2/year for residential buildings and 12-20 ALL/m2/year for commercial buildings.

Persons subject to property tax

Subject to property tax on agricultural land, on buildings and on construction land will be also the user of the property, which in case does not possess any ownership documentations, is obliged to self-declare the property to the Municipality of its jurisdiction.

Hotel accommodation tax

The tax base of hotel accommodation tax will be the number of nights of accommodation and will vary upon the following categories:

  • For 4 to 5 stars hotels, from ALL 105 to 350 per accommodation night per person, depending on the location of the hotel;
  • For guesthouses, dormitories, motels or any other accommodation facilities from ALL 25 to 100 per accommodation night per person, depending on the location of the facility.

Before this change, the rate of hotel accommodation tax was 5% of the accommodation price per room, or per person, per each accommodation night.

Table tax

The law amends the tax rate and the sub-categories of the table tax. The new tax varies in the range between ALL 0/year for identification tables not larger than 2m2 incorporated in the building surface up to ALL 90,000 /m2/year for electronic movable or immovable tables installed for promotional purposes in Tirana (previously, it ranged from between ALL 120/m2/year to ALL 810,000/year for tables with a surface of over 18 m2).

In any case, the Municipal Council is entitled to determine the tax base and tax rate of table tax.

Tariff for occupation of public areas for business purposes

The amendment classifies as 'tariff for occupation of public areas for business purposes' what was previously determined as 'tax of occupation of public areas for business purposes'. Same as before, this tariff is calculated as a monthly liability of the taxpayer and the indicative rates vary from ALL 60 to 120/m2/month. Moreover, same as before, the Municipal Council determines the tax rate, the main administration and collection rules. However, unlike before, the Municipal Council is no longer obliged to set the tariff in the range between plus 10% and minus 30% of the indicative rates.

Tax on impact on infrastructure of new constructions

According to the amendments, the tax base and rate of the tax on impact on infrastructure are differentiated based on the categories/purposes of the construction. More precisely:

  • In case of construction of residential buildings or service facilities by construction companies, which are not designated for tourism, industry or public use, the tax rate applicable is between 4 to 8% of the 'sales price per square meter' (based on reference market values set by the Instruction of the Council of Minister "On approval of the average construction costs of buildings from the National Housing Agency", updated annually).
  • For constructions other than those mentioned above, the tax rate remains unchanged, i.e. at 1 to 3% of the investment value or at 2 to 4% for Tirana municipality, except for public infrastructure projects (0.1% of the investment value) and buildings under legalisation process (0.5% of the investment value).

III. Amendments related to social and health insurance contributions (in force as of 1 January 2016)

The Fiscal Package of 2016 brings some significant changes on social and health insurance contributions, respectively on:

  • law no. 10383, dated 24.02.2011 "On compulsory health insurance in the Republic of Albania", as amended,
  • law no. 7703, dated 11.05.1993 "On social contributions in the Republic of Albania", as amended,
  • law no. 9136, dated 11.09.2003 "On collection of social and health contributions in the Republic of Albania", as amended.

Freelance professionals

For specific categories of persons, which perform professional economic activities as self-employed, the base salary for the purpose of calculation of health and social contributions, as well as the criteria for its determination, will be set by a specific Decision of the Council of Ministers. Such Decision is expected to take into consideration the type of profession, the number of employees, the area where the economic activity is performed, the level of revenue for the same or similar professions in the public sector, the working experience on the profession and the status of the licensed professionals.

Previously, for all categories of self-employed, the base salary for the calculation of social and health contributions was as follows: for social contributions – equal to the minimum salary for contributions calculation purposes; for health contributions – twice the minimum salary for contributions calculation purposes.

Non-paid members of the family

It is left under the discretion of the Council of Ministers to define the cases and the obligations to pay social and health contributions for the non-paid members of the family who work and live together with specific self-employed categories.

Self-employed retirees

Self-employed retirees, who receive a pension and at the same time, perform on their own a professional activity, are not liable to pay social and health contributions in relation to their activity.

IV. Amendments to the law no. 61/2012, dated 24.05.2012 "On Excise in Republic of Albania, as amended (in force as of 1 January 2016)

Video camera of the authorised warehouse keeper

The Customs Administration has the right to request to the authorised warehouse keeper, to install surveillance video cameras and to store the images for a period determined by the Customs Administration. If a prosecuting investigation or a judgment has begun, the images are stored until the end of the investigation and/or trial.

Possession, transporting or selling of excise goods without fiscal stamps

In addition to the current penalties and current provisions of charges for criminal offences and seizure of the goods, the amending Law provides also for the seizure of the means of transport when the offence is identified during the transport of the goods. It provides also for the possibility to reject/delete such seizure only if it is proved that the owner of the means of transport was not involved in the offence.

Marking of fuel

Possession, sale or transportation of fuel by-products non-marked or without the right quantity of marker, will be subject to the following sanctions:

  • When identified for the first time, penalty equal to 2-times the amount of tax liability that would be due if the quantity had been correctly marked but not less than ALL 200,000.
  • When identified for the second time, penalty equal to 3-times the amount of tax liability that would be due if the quantity had been correctly marked, but not less than ALL 500,000.
  • Identification for the third and all consecutive times, penalty equal to 5-times the tax liability that would be due if the quantity had been correctly marked, but not less than ALL 1,000,000.

In addition to the penalty, the amending law provides also for the seizure of the goods.

Any interventions in the marker, including falsified or manipulated marker, falsification or theft of the marker, is subject to a penalty of ALL 1,000,000 in addition to the charges for criminal offences.

The level of excise on cigarettes

The expected increase of the level of excise on cigarettes for 2016 pre-announced at ALL 6,000/1,000 pieces, has been cancelled by maintaining the current level of ALL 5,500 ALL/1,000 pieces.

On the other hand, it has been exempted from excise tax the tobacco minced, manufactured or processed from private individuals and consumed by them and their relatives, for their own needs, on the condition that the total quantity produced does not exceed 25 kg per year and it is not involved in any sale activities.

Exemption from the reimbursement of excise tax on fuel by-products utilised in oil fields

From 01.01.2014, the importation of fuel by-products to be utilised in oil fields, is no longer exempted from excise tax. Furthermore, the amending law provides for the exemption from the reimbursement right of excise tax on fuel by-products utilised by companies involved in oil exploration and exploitation, regardless of the actual destination of utilisation.

Allowance of setting fiscal stamps in the storage warehouses

The new Fiscal Package provides for the possibility to set the fiscal stamps at the storage warehouses in the Republic of Albania (more precisely, upon exit from the storage warehouses and the release for consumption). Previously, the fiscal stamps on excise goods should had been set upon importation. The Council of Ministers is expected to determine the specific mechanisms of control, the procedural elements of managing the fiscal stamp from the concessionaire or the presence of foreign fiscal stamps on the goods.

V. Law no. 146/2015, dated 17.12.2015 "On job-seekers" (in force as of 26 January 2016)

This new law aims to provide job opportunities and qualification for job seekers, especially for those who benefit from the schemes of unemployment payments and social aid according to the applicable legislation.

The Minister of Social Welfare and Youth is expected to approve the Instruction for the implementation of this law, within one month from the date it enters into force.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Boga & Associates
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Boga & Associates
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions