The General Directorate of Taxes informs all taxpayers of the changes made by means of Normative Acts to Law No. 8438, dated December 28, 1998 “On Income Tax,” as amended, and Law No. 92/2014 of July 24, 2014 “On Value Added Tax in the Republic of Albania,” as amended. Specifically, the changes are as follows:
In the Law on Income Tax:
By means of Normative Act No. 5, dated 30.November 2019, “On an amendment to Law No. 8438, dated December 28, 1998, “On Income Tax,” as amended,” in Article 21 “Unrecognized Expenses,” paragraph p has been added, reading:
“Donations of monetary funds exceeding 51% of pre-tax profit, made for cases of the declaration of a “natural disaster state” within the specified deadline and transferred to treasury accounts. In cases where donations, due to the declaration of a “natural disaster,” are in the form of real estate, the assessment of the contribution up to the 5% level, relative to pre-tax profit, is calculated according to procedures established by a decision of the Council of Ministers.”.
Under this amendment, donations of monetary funds and real estate, made by various taxpayers and carried out during the “Natural Disaster State of Emergency” period, which are up to 51% of pre-tax profit, will be considered deductible expenses. Such donations for this purpose in excess of this rate will be considered non-deductible expenses.
Regarding the valuation of donations in the form of real estate, the detailed procedure will be addressed in the Government Decree to be adopted for this purpose.
In the Law on Value Added Tax:
By Normative Act No. 4, dated November 30, 2019, “On certain additions and amendments to Law No. 92/2014, dated July 24, 2014 “On Value Added Tax in the Republic of Albania,” as amended), the following amendments are made in order to exempt imports from VAT.
At the end of point 21 of Article 56 “Special Import Exemptions,” a paragraph has been added, “… excluding materials and equipment imported for this purpose by state authorities for cases of declaring a “state of natural disaster” within the specified period.”. By this provision, materials and equipment imported by state authorities for the reconstruction of areas affected by natural disasters or wars are exempt from VAT on import.
Also, goods and equipment for military purposes and those used as weapons, ammunition, or combat materiel, which have been designed, developed, manufactured, assembled, or modified for military use and are imported on behalf of the Ministry of Defense, are exempt from VAT on import.
For any clarification, please do not hesitate to contact the Taxpayers' Service counters nearest you or the Call Center at the toll-free number 0800 00 02.
Source: General Directorate of Taxes.