Guide on Tax System 2005 is the second edition of the same publication designed by the Institute for Development and Research Alternatives (IDRA) www.idra-al.org. The publication of this guide was supported by USAID in the frame of EDEM Project (Enterprise Development and Export Market Services). It is conceived as a practical tool on tax and tariffs in Albania to serve business community in our country. It clearly reflects the most recent changes in Albanian tax legislation approved with the new Fiscal Package 2005 which came into effect on January 15 th of this year.
Besides the general provisions with regard to taxation procedures in our country, types of taxes and tariffs (national or local, direct or indirect, for businesses or individuals), the Guide on Tax System 2005 also reflects the changes proposed by the new fiscal package which consisted in: a) clarification of the procedures for taxpayers' registration and deregistration, b) unification of tax appeal levels, c) reduction of profit tax level and interests for delay payments, d) taxation on personal incomes gained from the transfer of ownership from agricultural land and changes to the tax level on personal incomes from employment, e) dividend taxation, f) VAT on house initial sale, g) reduction of minimum value allowed for cash transactions.
Intending to provide all the necessary information to business community, such a guide also gives valuable information with regard to the documents required by tax authorities in order to better calculate the respective levels of taxes and tariffs, procedures for taxpayers' registration and deregistration with trade register and tax offices, procedures for termination and/or changes in the type of commercial companies. Part of the guide is also legal bases used for its design. The latter will help business community to better understand where to look for more detailed information about specific taxes and tariffs.
In order to reduce barriers to complete and accurate information, businesses and all interested people may find it published at the webpage www.albic.net
ALBIC (Albanian Business Information Center) managed by IDRA.
TABLE OF CONTENTS
INTRODUCTION
Chapter I TAX AND TARIFFS IN THE REPUBLIC OF ALBANIA
1.
General Review
1.1
Tax legislation
1.2
Definitions
1.3
Summary of tax and tariffs
1.4
General procedures on tax administration
Chapter II DIRECT TAXES ON BUSINESS
2.
General Review
2.1
Principle of residence
2.2
Subject of direct taxes on business
2.3
Registration
2.4
Levels of direct taxes on business
2.5
Direct taxes exemptions
2.6
Establishing the taxable profit
2.7
Special provisions for tax on profits
2.7.1
Amortization
2.7.2
Bad debts
2.7.3
Participations that are exempted from tax on profits
2.7.4
Recapturing losses
2.7.5
Crediting foreign tax
2.8
Tax payment and its final calculation
2.9
Record keeping
2.10
Tax on fortune games, casions and hippodromes
Chapter III TAXATION OF INDIVIDUALS
3.
Entities
3.1
Determining taxable incomes
3.2
Personal incomes exempted from taxation
3.3
Levels of personal income tax
3.4
Payment of personal incomes tax
3.5
Obligation of individual to declare and pay
3.6
Withholding tax at source
Chapter IV VALUE ADDED TAX
4.
Object and VAT Level
4.1
Registration
4.2
Turnover calculation
4.3
Self-supplies
4.4
Moment of supply
4.5
Private use of goods
4.6
Supply upon reduce payment
4.7
Taxable and exempted supplies
4.8
Small importers
4.9
Exports
4.10
Bills, data to be included in a tax bill
4.11
Bad debt
4.12
Keeping value added tax records
4.13
VAT declaration and payment
4.14
Tax crediting
4.15
Reimbursement
4.16
Payable interests
Chapter V EXCISES
5.
General Statements
5.1
Administrative procedures for excises
5.1.1
Obligation to possessing an excise authorization and to ask for approval of tax warehouse
5.1.2
How to Request and Acquire the Excise Authorization and the Tax Warehouse Approval
5.2
List of excisable good and excise levels
5.3
Exemptions from excise
5.4
Excise payment, stamps and their use
5.5
Excise payments for goods that require stamps
Chapter VI NATIONAL AND LOCAL TAXES
6.
General Review
6.1
National Taxes
6.2
Local taxes
6.2.1
Property tax
6.2.2
Other local taxes
6.2.3
Provisional local taxes
ANNEXES
Annex A – Declaration Forms of different taxes
Annex B – Other tax documents
Annex C – Taxpayers' registration and deregistration procedures
Annex D – Procedures for termination and change in the type of commercial companies
Tax System in Albania 
