The tax system in the Republic of Albania consists of a package of laws, directives, regulations, tax agreements with other countries, which reflect the types of taxes and duties applied in Albania, their rates, the procedures for imposing, modifying, and removing taxes, the procedures for assessing and collecting tax liabilities, as well as the forms and methods of tax audits.
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Tax Legislation
Duties are levied on international trade relations and economic activity in the country. International trade in goods is administered under customs legislation and by the customs administration, including the administration of domestically produced goods subject to excise.
Economic activity in the country, as well as international trade in services, is governed by tax legislation and the tax administration.
Customs legislation consists of administrative laws and more specific laws that define the various customs duties.
The main administrative law is:
- Law No. 102, dated July 31, 2014, “Customs Code of the Republic of Albania”
Specific laws that define customs obligations are:
- Law No. 9641 of December 21, 2005 “On the Commodity Nomenclature and the Customs Tariff”
- Law No. 61, dated May 24, 2012, “On Excise Taxes in the Republic of Albania”
- Law No. 92, dated July 24, 2014, “On Value Added Tax”
- Law No. 9975, dated July 28, 2008, “On National Taxes”
Tax legislation consists of laws on national and local taxes and duties. It comprises procedural laws and specific laws that determine the tax obligation.
The main administrative law is:
- Law No. 9920, dated May 19, 2008 “On Tax Procedures in the Republic of Albania,” as amended and by the 2007 Fiscal Package, sets forth the general rules of:
- for taxpayers, rights and obligations, the self-declaration process, the use of a tax representative, addresses its registration;
- to the tax administration, the right to monitor, inspect, and reassess self-declared liabilities;
- a decentralized tax administration divided into a central level (the General Directorate of Taxes and its regional directorates) and a local tax system (local government units with local offices), the possibility of delegating administrative authority to other public agents;
- defines evasion, fines, procedures for resolving disputes;
- gives the administration and the government the right to issue regulations;
Other laws of an administrative nature (based on Articles 78 and 83 of the Constitution), as well as those concerning taxation (based on Article 155 of the Constitution), are:
- Law No. 9632, dated October 30, 2006, “On the Local Tax System in the Republic of Albania”
- Law No. 9975, dated July 28, 2008, “On National Taxes.”.
- Law No. 10033, dated December 11, 2008, “On Gambling.”.
Other more specific tax laws that describe particular types of taxes or levies of national or local character. Law No. 8438, dated December 28, 1998, “On Income Tax," as amended, which covers income taxes on individuals, companies, and self-employed traders.
- Law No. 92, dated July 24, 2014, “On Value Added Tax”
- Law No. 8438, dated December 28, 1998, “On Income Tax”
- Law No. 9136, dated September 11, 2003, “On the Mandatory Collection of Social and Health Insurance in the Republic of Albania”
According to Albanian legislation
Tax It is a mandatory, non-refundable payment to the state budget, which also includes administrative penalties as well as interest on late payments as specified by law. In other words, taxes are compulsory payments that the state imposes on various taxpayers, which are used to cover general public expenditures so that the state can fulfill its functions. Taxes do not arise directly from state property or from property rights in it, but rather they derive from the wealth and economic power of private individuals.
Two characteristic The basis of taxes is:
- Tax payments lack the requirement for direct refund or compensation. This means that, in the case of taxes, the one-for-one principle does not apply as it does for other payments (e.g., fees).
- Taxes are, as a rule, unallocated revenues. In the most general cases, the intended use of the taxes is not specified.
Taxes, as the primary and most important instrument for collecting public revenues, are presented in a variety of forms. In Albanian legislation, taking into account the moment of income generation and the moment of expenditure of that income, taxes are divided into direct and indirect. Thus, according to this criterion, taxes paid at the moment income is generated represent the group of direct taxes, while those paid at the moment the income is spent are included in the group of indirect taxes.
Fees It is a mandatory contribution payable by any person who directly benefits from a public service. Thus, fees represent compensation for special public services provided by the state for the benefit of various individuals. These services are linked to one or more direct benefits for citizens. Some characteristic The special tax provisions are as follows:
- Fees are primarily a source of monetary revenue for local government bodies, municipalities, communes, etc.
- Public services for which a fee is paid also include an element of voluntariness, which in no case applies to taxes.
- From a financial standpoint, the role of fees is much less sensitive than that of taxes. Likewise, the role and importance of fees in covering service costs is sensitive in the local budget but less so in the national one.
Tax liability (obligation to pay taxes)
- A person's tax liability begins when the person engages in activities or acquires assets that have taxable elements under the provisions of the tax legislation.
- Tax liability ends when a person is no longer engaged in any activity or no longer owns any assets with taxable elements and has paid all taxes, duties, fines, and interest owed.
The right to information of taxpayers
- When legal proceedings are initiated against a taxpayer, he has the right to inspect the relevant documentation, except in cases where it is important to preserve public or private interests in confidentiality, such as in the case of a third party's business secrets or the confidentiality of informants' identities. The refusal of a request for inspection requires a separate executive decision by the Director General of Taxes.
Source: Wikipedia.