How to report annual information?
With the creation of an enterprise, the obligation arises to complete declarations according to the tax responsibilities for which the taxpayer is registered (corporate income tax, VAT, social and health insurance, personal income tax from employment, as well as other taxes/fees depending on the business's object of activity). Declarations are prepared according to the forms approved by instruction of the Minister of Finance.

The taxable income declaration is completed and filed on an annual basis. Each taxpayer prepares the annual taxable income statement and submits it to the tax administration by March 31 of the following year, simultaneously presenting the company's financial statements, as well as any other data specified in the instruction of the Minister of Finance for the implementation of Law No. 8438, dated 12/28/1998 “On Income Tax,” as amended.

This information is subject to self-declaration, which must be completed and paid by the taxpayer into the tax authorities' account at the time of submitting the annual taxable income declaration. Every taxpayer self-declares the amount of the tax liability or contribution, without waiting for an assessment, notice, or request from the tax administration, and pays the tax to the tax authorities' account.

The information included in the annual taxable income declaration contains data for the purpose of calculating taxable income (financial statements).
The Balance Sheet is one of the financial statements that shows the financial position (assets, liabilities, and equity) of a reporting entity on a specific date.

The Income and Expense Statement is another financial statement that shows the economic performance (income, expenses, and profit/loss) of a reporting entity during an accounting period.

The Statement of Changes in Net Equity shows the changes in the equity of a reporting entity during an accounting period, etc. (in accordance with the law “On accounting and financial statements”).

The request for information is broad and contains every possible and necessary piece of information to make a tax assessment of the taxpayer as well as their related parties, which will serve in calculating the taxable income for tax purposes.

Importance of Reporting Accuracy
Due to the very important role that the reported information has for the taxpayer, which also brings effects for third parties, it is important that all annual information is reported accurately and on time.

The Tax Administration, through taxpayer declarations and all other legal mechanisms, receives important information from third parties, from employers, as well as from all other related parties that fulfill the legal reporting obligation. During its work, the tax administration analyzes this information received from taxpayers and from related parties, concluding with a tax assessment.

What information must be reported?

The taxpayer makes available to the tax administration the books, records, information, and documents necessary to perform the accurate calculation of their tax liabilities.
Upon the request of the tax administration, the taxpayer provides additional explanations, orally or in writing. This obligation includes, but is not limited to:

• Completing, signing, and returning questionnaires or other written requests for information or documents from the tax administration, within 20 days from the date of posting the request or its electronic delivery to the taxpayer;
• Meeting with tax administration employees during working hours to answer questions and provide information, according to Article 94 of this law.

The tax administration's request for additional explanations is made only for information related to the taxpayer's commercial transactions, technical processes or procedures, and financial operations between the taxpayer and third parties.

• The withholding tax agent must provide the tax administration with accurate information regarding taxpayer declarations on the date they are required to inform.

Obligation of Third Parties to Provide Information

• Upon the request of the tax administration, third parties shall provide information, in writing or orally, make available books and records, as well as other information regarding the tax liability of a taxpayer with whom they have entered into commercial or financial transactions. This obligation includes, but is not limited to:

• Completing, signing, and returning written questionnaires or other written requests for information or documents from the tax administration, within 30 calendar days from the date when the request, sent by mail or electronically, was received or is considered to have been received by the third party;
• Meeting with tax administration employees during official working hours at the third party's premises of economic activity or at the tax administration's offices, to answer questions and provide information, based on a written summons.

Information Regarding the Implementation of International Agreements

• At the request of the tax administration, for the purpose of implementing international agreements on tax matters or for the purpose of international agreements providing administrative assistance in tax matters, which are in force in the Republic of Albania, every person must provide information in accordance with the provisions of international agreements in the tax field, including, but not limited to, information held by banks and other financial institutions.

Persons to Whom the Request for Information is Addressed

• The written request for information is addressed to:
  Legal entities, regarding:
  • Dividends paid to shareholders or partners;
  • Persons with whom they are conducting or have conducted financial or commercial transactions;
  • Payments made to subcontractors or in the position of a subcontractor;
  • Debtors and creditors;

• Banks and financial institutions, regarding:
  • Interest payments;
  • Deposits and liabilities at the end of the year;
  • Other banking operations;
  • The electronic register of bank accounts in the name of taxpayers, including the trade name and personal identification number;

• Brokerage firms or collective investment funds, for securities transactions;
• Real estate agents, for transactions regarding clients;
• Buyers or sellers of real estate, for the description and price of the real estate;
• Notaries, for notarial acts, for the sale and purchase of movable or immovable property, or construction contracts;
• Resident and non-resident legal entities, for payments made to non-resident persons;
•  State institutions and state administration employees;
• Other contractors of the taxpayer;
• Donors, international organizations, and non-profit organizations, domestic and foreign, for payments made to taxpayers for the supply of goods and services.

Clarification:
The tax administration may require taxpayers to use specific forms for the submission of documentation, information, or requests.
When a form is not required, any communication required under tax legislation is sent electronically or delivered in writing, except where provided otherwise.

Caution:
In case of failure to provide information, penalties shall apply in accordance with Article 126 of Law No. 9920 of May 19, 2008 “On Tax Procedures in the Republic of Albania,” as amended.

Tax is a mandatory and non-refundable payment to the State Budget or to the budget of local government bodies, established by law and which is not made in exchange for specific goods and services.

A fee (tax) is a mandatory and non-refundable payment to the State Budget or to the budget of local government bodies, established by law and paid by any person who exercises a public right or benefits from a public service within the territory of the Republic of Albania.

1. Taxes and duties are national or local.

National taxes and fees include:

• Value Added Tax (VAT)
• income tax;
• Tax on games of chance, casinos, and hippodromes;
• National taxes and fees;
• Other taxes, which are defined as such by special law.

2. Local taxes and fees are determined by the law on the local tax system.

3. Social security and health insurance contributions are determined by the law on social security and health insurance.

Payment capacity in the case of enterprises may be limited for a number of reasons, including temporary commercial issues as well as changes in the economic sector or more broadly. The Tax Administration will review each taxpayer's case individually, analyzing and taking into account every relevant factor in the taxpayer's history, as well as examining in detail each type of unpaid tax. When a financial circumstance prevents the taxpayer from paying their tax obligations on time, they may be allowed to enter into an installment payment agreement at any time. At the same time, the taxpayer must prove that he is financially unable to pay the full tax liability and demonstrate that, despite his financial circumstances, he is capable of complying with the agreement. The tax administration may not enter into an installment payment agreement if auction proceedings for the sale of assets confiscated in connection with that unpaid tax liability have already begun. The request is made in writing and addressed to the director of the regional directorate or the head of a similar unit in the regional directorate where the taxpayer is registered.

The request must be made within 15 days from the date the assessment notice is deemed to have been received. The installment payment agreement is made in writing within 10 calendar days from the date the request is submitted and is signed by the taxpayer and the director of the regional directorate or the head of a comparable unit. To enter into an installment payment agreement, the taxpayer is required to pay immediately at least 20% of the amount of the obligation to which the agreement applies.

The installment payment agreement is concluded for a period starting from the date of signing until the end of the next calendar year following the moment the agreement is drafted. Upon signing an installment payment agreement for a tax liability, late payment interest (overdue interest) continues to be paid on the tax liability, but late payment penalties are not calculated.

The director of the regional tax directorate, when the taxable person's request is unsubstantiated and unjustified by the circumstances, may refuse the request for an installment payment agreement or may require a bank guarantee before entering into such an agreement.
The guarantee must be provided by one of the banks of which the taxable person requesting the installment payment is a client. In this case, the bank issuing the guarantee becomes the guarantor for the taxable person's liability.

Once the taxable person presents the document of this guarantee, the director of the regional tax directorate may agree to sign the installment payment agreement for the unpaid tax liabilities.

The installment payment agreement may be terminated by the tax administration at the earliest moment the taxable person fails to comply with it regarding the regularity of payments, as well as when they fail to pay other tax liabilities arising during the period covered by the agreement.

In this case, the taxable person is obliged to pay all unpaid tax liabilities covered by this agreement within 30 calendar days from the date of receiving the decision to terminate the agreement. If these liabilities are not paid, the tax administration shall collect the debts in accordance with the legal provisions.

When the amount of tax liability paid is greater than the amount of tax assessed in the tax assessment notice or on the tax return, the tax administration applies the excess payment against other unpaid tax liabilities of the taxpayer. This is done automatically by the tax administration within the first subsequent tax period following the period in which the taxpayer has a tax credit. For income tax, this is done within the first month following the month in which the taxable person has a tax credit.

When the amount of the excess tax credit is greater than the amount of other unpaid tax liabilities of the taxable person, the remaining difference, upon the written request of the taxable person, may be:

• Automatically refunded to the taxable person within 30 calendar days from the date the overpaid amount was deposited or from the date the legal conditions for a refund were met;
• Transferred to the account of the taxpayer's future tax liabilities.

Where can we appeal against tax administration actions that we consider unfair?
Appeals are filed only with the Tax Appeals Directorate, which, as of January 1, 2017, has been part of the Ministry of Finance and Economy.

What are the rules for filing an appeal:

1. You must have a document (sent by the tax administration) that affects the interests of the taxpayer (read below for what this document may be).
2. You must appeal within 1 month of becoming aware of the administrative act sent to you by the tax administration.
3. Within this month, you must pay or provide a bank guarantee for the liabilities contained in the assessment notice, along with the late interest calculated up to the payment date. Fines are neither prepaid nor subject to a bank guarantee.

Caution: Without these documents, the Appeals Directorate will reject the appeal.

Why we can complain:

• Any "Tax Liability Assessment Notice" sent to you by the tax administration that you consider unfair.
• Any other administrative act that affects the taxpayer's tax liability, including requests for compensation.
• Any act that affects the taxpayer's request for a tax refund.
• Any act that affects the taxpayer's request for tax relief.
• Errors made by the administration in calculating the late interest percentage may be appealed.
• The imposition of or errors in calculating the amounts and various types of fines.
• An appeal can also be filed against an omission (failure to act) by the tax administration that affects the taxpayer's tax liability.

Please note, administrative measures related to the forced collection of tax obligations—such as an order to freeze bank accounts; a notice and demand for payment; a notice to third parties; and administrative acts concerning the confiscation of goods—cannot be appealed.

What documents need to be sent to the Appeals Directorate for the appeal:

1. A written request describing the taxpayer's claims. This request must include the taxpayer's name and address, the taxpayer registration number (NIPT), and must be signed at the end.
2. The administrative act issued by the tax administration.
3. Proof of payment of the tax liability and late interest (bank-processed payment order). In the absence of payment, a bank guarantee that covers the liabilities plus late interest.
4. Supporting information for the appeal, such as audit reports, minutes (records), acts of findings, etc.
5. Any other document that the appellant considers important for the fair resolution of the case.

How is the appeal submitted?
The appeal can be delivered in person or sent via registered mail. The date the appeal is received by the Tax Appeals Directorate is considered the date of protocol for appeals delivered in person, and the date of dispatch at the post office for appeals sent by mail.

Caution! The taxpayer, in the documents submitted with the appeal, must verify the date on which the administrative act being appealed was received. As evidence, a copy of the envelope through which the appeal was sent to the taxpayer, a copy of the postal delivery record from the post office, etc., may be used.

Key issues to keep in mind during the appeal process:

1. During the review process, the Appeals Directorate may request additional documents, and the taxpayer is obliged to respond to the request.
2. The burden of proof to verify the contrary of the tax administration’s assessment lies with the taxpayer.
3. If the taxpayer has missed the appeal deadline, they must argue and prove with the necessary documentation that the delay was not their fault.
4. After a reinstatement of the deadline, the appeal must be filed within 15 days, rather than the 1 month allowed before the deadline was missed.
5. If the taxpayer wishes to be heard orally, they may request a hearing in their written appeal.

Where can we read the legal basis for appeals in more detail?

• Law No. 9920, dated May 19, 2008, "On Tax Procedures in the Republic of Albania," from Article 106 to Article 110.
• Minister of Finance Instruction No. 24, dated September 2, 2008, “On Tax Procedures in the Republic of Albania,” from paragraph 106 to paragraph 110.