Law Project “On Fiscal and Criminal Amnesty for Entities Making Voluntary Asset Declarations”

In support of Articles 81, points 1 and 2, letter “ë”, and 155 of the Constitution, on the proposal of the Council of Ministers, the Assembly of the Republic of Albania

DECIDED:

Chapter I

General Provisions

Article 1

Objective

This law defines the rules, guarantees, actions of entities that benefit from the voluntary asset declaration process, the powers of public administration bodies and public authorities involved in this process, as well as activities related to this process.

Neni 2

Purpose

The purpose of this law is:

1. to enable the legalization of undeclared assets, whether registered or not, in whole or in part, the revaluation of financial statements, as well as the collection of taxes as defined by this law, by ensuring transparent procedures;
2. predicting the incentive mechanisms for the subjects of this law, with the aim of assuring them that from the process of legalizing the income used to create assets, public authorities apply a special favorable tax at a special rate,
3. guaranteeing and maintaining the confidentiality of information related to these assets, as well as
4. guarantee against the initiation of administrative procedures and criminal proceedings by the relevant institutions against these entities, in relation to these assets.

Article 3

Definitions

In this law, the following terms have these meanings:

“Voluntary declaration”, the declaration made in the form and manner prescribed by this law, for the assets and elements of the financial statements, voluntarily carried out in the competent bodies, in accordance with the provisions of this law and the sub-legal acts issued for its implementation;

2. “Assets”real estate, within or outside the territory of the Republic of Albania, movable assets registrable in public registries, cash amounts, Albanian currency or foreign currency, virtual currency, valuables, gold or precious stones, works of art, securities or other financial market instruments;

3. “Confidentiality”confidentiality and secrecy of any action, whether it has had a result or not, of any fact, of any information provided by the declarant or their special representative by power of attorney, of any data on declared assets, with the exception of:

a. the determination for making available to them civil servants tasked with duties related to the declaration process;

b. the obligation to make them available to state employees employed in state administration bodies and authorized by this law to pursue the voluntary declaration process;

c. other cases defined by Albanian legislation, as well as obligations arising within the framework of international cooperation in the administrative or penal field.

Article 4

Application of other legal provisions

1. The provisions of legislation in the tax and customs fields, which provide for the powers of public administration bodies responsible for supervising the implementation of field legislation, including responsibility for initiating administrative procedures, during the implementation of this law, shall apply in accordance with this law.
2. The provisions of this law do not apply to assets covered by the scope of the law. no. 10192, dated 3.12.2009, “On preventing and combating organized crime and trafficking through preventive measures against property,”, changed.
3. Provisions of the law no. 20/2020, “On the completion of transitional property processes in the Republic of Albania” take precedence over the provisions of this law.

Article 5

Subjects and beneficiary subjects

1. The subjects of this law are individual citizens of the Republic of Albania, regardless of whether they are tax residents or not in the Republic of Albania, natural and legal persons, taxpayers resident in the Republic of Albania, as well as individual tax residents in the Republic of Albania, regardless of their nationality.

Beneficiaries of this law are the entities provided for in point 1 of this article, which have completed the voluntary declaration process and have been issued with a certificate of completion of the asset declaration process, in accordance with the provisions of this law.

Article 6

Borderline for voluntary declaration

The assets that may be voluntarily declared according to the provisions of this law shall not exceed the maximum value of 2,000,000 (two million) euros.

2. For persons included in the family certificate, the assets that may be declared according to the provision of point 1, are the entirety of the voluntary declarations of the family head or any adult person, based on the data of the family certificate according to the composition documented as of January 1, 2022.

Article 7

Excluded subjects 

The following are exempt from the application of this law:

1. Subjects legally obligated to declare assets, in accordance with the law no. 9049, dated 10.4.2003, “On the declaration and control of assets and financial obligations of elected officials and certain public servants,”, changed, as well as the persons comprising their family certificate, as of the effective date of this law, as follows: 

a) The President of the Republic, members of Parliament, the Prime Minister, the Deputy Prime Minister, ministers and deputy ministers;

b) Judge of the Constitutional Court, Chairman of the Supreme State Audit, Prosecutor General, People's Advocate, member of the Central Election Commission, member of the High Judicial Council, member of the High Prosecutorial Council, High Inspector of Justice and inspectors of the High Inspectorate of Justice, Chief Inspector of the High Inspectorate for Declaration and Control of Assets and Conflict of Interest;

c) High-level and middle management officials, according to current civil servant legislation, with the exception of local self-government bodies;

c) Prefects, county council chairmen, and mayors;

d) Directors of departments and commanders of the Armed Forces in the Ministry of Defense and the State Information Service;

dh) Prosecutors, judges, the Director General of the State Judicial Enforcement Service, and heads of enforcement offices, within the jurisdiction of each first-instance judicial district;

e) Heads of independent public institutions and members of regulatory bodies;

The Director and Deputy Director of the State Police, the Directors General of the State Police, the Directors of Directorates within the General Directorate of the State Police, the Directors of Local Directorates of the State Police, the Head, investigators, and Judicial Police officers of the National Bureau of Investigation, judicial civil servants in special courts against corruption and organized crime, and administrative personnel of the Special Prosecution Office;

f) The Director General, Deputy Directors General, directors of directorates, at the central level and in the regions, in the General Directorate of Taxation, in the General Directorate of Customs, and in the General Directorate for the Prevention of Money Laundering;

g) Heads of all levels of property restitution and compensation, privatization, and property registration structures;

Officials elected and appointed by the Assembly, the President of the Republic, the Prime Minister, ministers, or persons equal to them;

h) The Governor of the Bank of Albania, the Deputy Governor, and the members of its Supervisory Board;

i) Directors of public institutions subordinate to central institutions at the district level;

j) Administrators of joint-stock companies with state capital participation of over 50 percent and with more than 50 employees;

k) Member of the reassessment institution (Independent Qualification Commission, Special Appellate Chamber and public commissioners), the Secretary General, economic and legal advisors, as well as persons related to them, according to the law no. 84/2016, “On the transitional reassessment of judges and prosecutors in the Republic of Albania.”.

• The subjects who held duties or functions as defined in point 1 of this article, as well as the persons who were part of their family status, as of January 1, 2022.

• Subjects of law no. 10192, dated 3.12.2009, “On preventing and combating organized crime and trafficking through preventive measures against property,”, changed.

• Persons declared and persons for whom the declaration procedure has been initiated, in accordance with the provisions of the law no. 157/2013, “On measures against the financing of terrorism,”, changed.

• Subjects for whom criminal proceedings have been initiated for tax and customs evasion.

• Subjects that have been verified in accordance with the provisions of the normative act No. 1, dated 31.1.2020, of the Council of Ministers, “On preventive measures within the framework of strengthening the fight against terrorism, organized crime, serious crimes, and consolidating public order and security,” approved by law no. 18/2020.

Article 8

The responsible unit at the General Directorate of Taxes

1. For the implementation of this law, a special structure called the Unit for the Supervision of Voluntary Asset Declaration (the Unit) is established within the General Directorate of Taxation, reporting directly to the Director General of Taxation.
2. The duties and responsibilities of the Unit are to monitor the implementation of the provisions of this law, to create records and statistics regarding the effects of law enforcement, to collect information, to update and process data, to ensure the secrecy and confidentiality of information related to data, as well as to perform administrative and procedural actions, in accordance with this law.
3. In fulfilling its duties for the implementation of this law, the Unit receives information from second-tier banks and other financial institutions in the Republic of Albania, supervisory authorities of banking financial institutions, the State Cadastre Agency, the General Directorate for the Prevention of Money Laundering, the General Directorate of Civil Status, law enforcement institutions in the Republic of Albania, the Ministry of Justice, the Prosecution, and the State Intelligence Service, the High Inspectorate for the Declaration and Control of Assets and Conflicts of Interest, as well as from other institutions whose activities are directly related to the asset declaration process, which are obliged to respond within 3 working days of receiving the request. Services performed by state institutions for the implementation of this law are provided free of charge to the Unit.
4. The structure, organization, and functioning of the Unit shall be approved by order of the minister responsible for finance.

Chapter II

VOLUNTARY DECLARATION OF ASSETS AND FINANCIAL STATEMENTS

SECTION I

General Provisions

Article 9

Procedure for voluntary declaration of assets and i financial statements

1. The subjects of this law may voluntarily declare assets and financial statement items that they have not previously declared or declared at a lower value than they should have, regardless of whether the assets, in whole or in part, are unregistered with the competent authorities, or are or are not located within the territory of the Republic of Albania.
2. The voluntary declaration of assets or financial statements is carried out at the Special Unit, by submitting a self-declaration according to the voluntary declaration form. Within 5 (five) working days from the submission of the voluntary declaration form, the Unit conducts preliminary verifications to determine if the applicant is eligible for this benefit and provides the subject or their representative with a duplicate (copy) of the self-declaration form certified/signed by the Unit. The format of the voluntary declaration form and the procedure for the voluntary declaration of assets and financial statements shall be determined by instruction of the minister responsible for finance.
3. The voluntary declaration process begins with the submission of the voluntary declaration form mentioned in point 2 of this article and concludes with the subject being issued the corresponding certificate, as provided by this law. Cash amounts are deposited into bank accounts of second-tier banks, while for other assets that are required to be registered, registration procedures are followed in accordance with the provisions of the relevant field legislation.
4. The declarations and actions carried out under this procedure by the beneficiary entities, according to this law, in relation to the type and value of property voluntarily declared in the relevant form, do not serve as an indication or evidence for criminal and/or administrative prosecution or proceedings against the beneficiary entities.

Article 10

Voluntary declaration of cash sums

For the declaration of cash amounts, the subject or their representative, after obtaining the voluntary declaration form issued by the Unit, in accordance with the provisions of Article 9 of this law, submits a copy of this form for the deposit of the cash amount declared in the form into an account opened for this purpose.

2. The bank or financial institution, after verifying the form for the cash amount to be declared, provides the subject or their representative with a confirmation of the deposit of the amount and the withholding of taxes.

3. Banks or other financial institutions, operating within the scope of this law, shall immediately notify the Unit of the cash deposit and the conformity of this sum with the value declared on the form.

4. The interaction of second-tier banks or other financial institutions, the exchange of data and cooperation with the Unit, as well as the procedure for this phase of the voluntary declaration process, are determined by instruction from the minister responsible for finance.

Article 11

Tax incentives for voluntary cash declarations

The amounts in cash declared under this law cannot be transferred abroad for a period of 5 years from the time of their deposit upon completion of the voluntary declaration procedure as provided for in letter a of point 1 of Article 16 of this law.

2. Banks or financial institutions where funds are deposited pursuant to this law shall inform the declaring entities about the condition stipulated in the first paragraph, in cases where, after depositing sums in the respective accounts, they may wish to make international bank transfers for the amounts declared according to this law, within 5 years from the date of their deposit.

The declaring subject cannot withdraw cash sums deposited until the expiry of the term of this law.

4. In cases where entities that have declared cash amounts wish to transfer those amounts, or their equivalent, abroad before the five-year period from the date of their deposit has expired, a penalty equal to 301 TP3T of the transferred amount will be withheld.

5. The penalties provided for in point 4 of this article are transferred to the treasury account of the Ministry responsible for Finance by the banks, and are in addition to the initial amount paid at the time of their deposit upon completion of the voluntary disclosure procedure.

Article 12

Responsibility for the implementation of limits on the voluntary declaration of cash amounts

1. Responsibility for the implementation of restrictions, as provided for in Article 11, belongs to:

a) the subject who has benefited from the voluntary declaration of cash sums, according to this law, in cases where the transfer is requested to be made by a bank other than the bank where the deposit was made;

b) the bank and financial institution in cases where the transfer is requested to be made to the bank in which the deposit was made.

2. The General Directorate of Taxation, during inspections, from the entry into force of this law until 5 years after the end of its implementation period, takes into consideration the application of the provisions of this law regarding the limitations on the movement of cash amounts outside the country.

Article 13

Voluntary declaration of assets real estate after the movable possessions

1. The subjects of this law may voluntarily declare and legalize the source of income used to create movable or immovable property that is required to be or has been registered in public records, sources which have not been previously declared.
2. Assets according to the definition of point 1, which can be declared to the Unit by submitting the voluntary declaration form, are:

• assets with undeclared resources, registered in public registries;
• assets with undeclared sources but which are in the process of registration;
• assets with undeclared sources for which sale contracts have been concluded that have not been submitted for registration according to the relevant field legislation.

Article 14

Voluntary declaration of other assets

The voluntary declaration of other assets, different from those defined in articles 10 and 13 of this law, is made to the Unit, by submitting the voluntary declaration form.

Article 15

Voluntary disclosure of specific elements of annual financial statements

1. The subjects of this law may re-declare specific elements of assets, liabilities, or equity of the company's annual financial statements, as determined by the directive of the minister responsible for finance, with the aim of ensuring a real, true, and fair presentation of each element of these statements' assets and liabilities.
2. For all differences resulting from the re-declaration of specific elements of assets, liabilities, or equity in the annual financial statements of companies that are obligated to perform a statutory audit based on the regulatory framework of the statutory audit field, statutory auditors who have audited the annual financial statements of these companies before the re-declaration process are exempt from liability related to the creation of these differences, as a result of the requirements of this law.
3. For any difference arising from the real situation versus the current accounting situation, which has a net effect of increasing revenue or capital, the entity is obligated to pay taxes, according to the value and time modalities provided for in Article 16 of this law.
4. Any difference accounted for based on the private sector accounting regulatory framework for this purpose will be classified as untaxable income or non-deductible expense for the purposes of the profit and loss statement or simplified profit tax.
5. The sums of liabilities to the company's partners, revalued according to the provisions of this article, can be used freely by them for business or personal purposes.
6. No declaration of position can provide for past, current, or future periods, effects on increased expenses or other elements that reduce taxable income or payable VAT.

Article 16

Special Tax

1. In cases of voluntary declaration of cash amounts and their deposit into bank accounts, the bank or financial institution holds a special tax of:

a) 7 percent of the total amount declared, for declarations and payments made in the first 4 months from the entry into force of the law;

b) 10 percent of the total declared amount, for declarations and payments made after 4 months from the law's entry into force.

If subjects who have voluntarily declared cash amounts by depositing them into bank accounts decide to invest the declared amounts in treasury securities, treasury bonds, or bonds with a maturity of at least 2 years, the Bank of Albania, in its role as Fiscal Agent, levies a special tax of:

5 percent of the total amount for investments made in the first four months from the law's entry into force;

7 percent of the total amount for investments made four months after the law comes into effect.

• In cases of voluntary declaration of other movable or immovable assets voluntarily declared to the Unit, the special tax is paid as follows:

a) 7 percent of the declared value, for declarations and payments made in the first four months from the entry into force of the law;

b) 10 percent of the declared value, for declarations and payments made after four months from the law's entry into force.

Banks of the second tier or financial institutions shall transfer the revenues from special taxes under this law into the special treasury account of the ministry responsible for finance.

The tax obligations of the beneficiary entities, with regard to the value and type of the declared asset, are considered to be regularly paid, and the competent tax authorities cannot claim payment of other additional obligations beyond those paid according to the provisions of this article.

Article 17

Asset legalization

1. Assets voluntarily declared and located outside the territory of the Republic of Albania can be legalized by paying the special tax, as provided for in Article 16 of this law. Assets legalized in this manner may be freely used and administered in accordance with the provisions of the relevant legislation.

2. For the legalization of assets, pursuant to paragraph 1 of this article, the subjects of this law, personally or through their representatives, complete the voluntary asset declaration form, as provided for in Article 9 of this law, and submit this declaration to the responsible border customs authorities for the performance of customs procedures, in accordance with the applicable legislation. The rules and method of repatriation of assets shall be determined by instruction of the minister responsible for finance.

3. Declarations and actions undertaken by beneficiaries within the framework of asset legalization, according to this law, in relation to the type and value of assets they voluntarily declare in the relevant form, do not serve as indications or evidence for criminal and/or administrative prosecution or proceedings against these subjects.

Article 18

Interruption of the voluntary declaration procedure

1. The voluntary declaration procedure is considered terminated:

• self-declaration by the subject, at any time, after the commencement of the voluntary declaration procedure, without needing to state the reasons for termination;
• upon the death or liquidation of the declaring entity, as applicable;
• with the completion of the law's enforcement deadline and the non-fulfillment of the conditions provided for in point 1 of article 16 of this law.

2. With the termination of the voluntary declaration procedure, it is considered that the declaration procedure, within the meaning of this law, has not commenced, and the subject is not considered a beneficiary subject, within the meaning of this law. 

Article 19

Conclusion of the voluntary declaration procedure

1. The voluntary declaration procedure is completed by simultaneously fulfilling these conditions:

a) Upon depositing the amounts into the respective account, in accordance with Article 10 of this Law, in cases where the asset consists of monetary amounts;

b) By paying the special tax value, according to Article 16 of this law.

2. Upon completion of the voluntary declaration procedure, within 20 (twenty) days from the submission of the documentation, as per point 1 of this article, the Unit shall issue the relevant certificate of completion of the voluntary asset declaration process, the format of which shall be approved by instruction of the minister responsible for finance.

The person in whose name the certificate for the completion of the voluntary declaration process has been issued is considered the beneficiary of the property, respective to the type and value determined in the relevant certificate for the completion of the voluntary declaration process.

4. The asset for which the certificate has been issued, upon completion of the voluntary declaration process, is considered a declared asset within the meaning of this law.

Chapter III

EFFECTS OF COMPLETION OF THE VOLUNTARY DECLARATION PROCEDURE FOR ASSETS AND/OR FINANCIAL STATEMENTS

SECTION I

 GUARANTEES AND RIGHTS OF BENEFICIARY SUBJECTS

Article 20

 Effects of completing the voluntary disclosure procedure

Revenue after payment of obligations, according to the provisions of this law, is considered income for which tax obligations have been paid in accordance with Albanian legislation.

2. Beneficiaries, according to the provisions of this law, after being issued the certificate of completion of the voluntary declaration process, shall acquire the following rights:

b) They are exempt from the obligation to provide information to the respective administrative institutions regarding the time, manner of creation, maintenance, or possession of assets declared in accordance with the provisions of this law;

c) Maintaining secrecy, as defined by this law, regarding the regularization of declared assets and the declaration of elements of financial statements, in accordance with the provisions of this law;

c) Guarantee for entities that have declared cash amounts, against future discrimination in tax liability calculation procedures;

d) Exemption from the investigation and administrative procedures within the framework of administrative penalties, in relation to assets declared according to the provisions of this law, if not otherwise provided in this law;

Immunity from criminal prosecution and proceedings, within the scope of the criminal law applicable in the Republic of Albania, for criminal offenses in the tax and customs fields from which assets declared under the conditions and provisions of this law directly or indirectly originate;

e) Removal of seizure or confiscation measures against voluntarily declared assets, for reasons arising from the application of this law.

3. Any provision of this law shall be interpreted in favor of the beneficiaries.

4. Taxes paid for the purpose of asset declaration are not considered a deductible expense for tax purposes.

5. In cases of re-declaration of financial statement elements, the rights of the beneficiary entities, to the extent applicable, extend to sector professionals who have certified the re-declared actions, in accordance with this law.

6. The forecasts in this article do not apply to the subjects provided for in Article 7 of this law.

Article 21

Fine/Late Fees/Penaltiesëactions on declared assets

1. All beneficiary subjects, as defined by this law, shall have all fines/late fees/penalties provided for in the current legislation for asset declaration, as per this law, forgiven, if they register their assets within the implementation period of this law, in accordance with the provisions of the current legislation.

2. The predictions of this article do not apply to the subjects provided for in article 7 of this law.

SECTION II

Criminal amnesty

Article 22

Conditions for granting amnesty from criminal prosecution

1. Beneficiaries who have been issued a certificate of completion of the voluntary declaration process are exempt from criminal prosecution for tax and customs offenses directly or indirectly related to the creation and disposal of the declared assets, under the conditions stipulated in this law, committed up to the date of entry into force of this law. 
2. The subjects provided for in Article 7 of this law do not benefit from the forecasts in point 1 of this article.

Chapter IV

Final and Transitional Provisions

Article 23

                                                    Implementation period

1. For declaring subjects, this law applies for a period of up to 9 (nine) months from the date its effects begin.

2. For public administration bodies involved in the voluntary declaration of assets, the legal deadline extends until the completion of the review of the declarations made, within the time limit provided for in point 1 of this article, according to the provisions of this law.

Article 24

Regulations

Loading Minister responsible for Finance for the issuance of subordinate acts in implementation of Article 8, paragraph 4, Article 9, paragraph 2, Article 10, paragraph 4, Article 15, paragraph 1, and Article 17, paragraph 2, and Article 19, paragraph 2 of this law, within 1 (one) month of its entry into force.

Article 25

Entry into force

This law enters into force 15 days after its publication in the “Official Gazette” and takes effect 30 days after its entry into force.

CRYSTAL

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Source: publicconsultation.gov.al

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