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Amendments to the Instruction on Income Tax

20 March 2013

On 25 February 2013, the Minister of Finance issued Instruction No. 10 on Certain Amendments to Instruction No. 5 dated 30 January 2006. The amended Instruction reflects earlier changes to Law No. 8438 on Income Tax dated 28 December 1998.

Corporate income tax advance payments

On 28 June 2012, the Albanian Parliament approved changes to Law No. 8438 on Income Tax dated 28 December 1998 regarding the deadline for payment of the corporate income tax (CIT) advance payments. The Income Tax Law provides that the CIT advance payments are to be settled as per the following schedule:

Period Deadline for payment
January, February, March by 30 March
April, May, June by 30 June
July, August, September by 30 September
October, November, December by 30 December

These changes became effective starting from 1 January 2013.

The amended Law and Instruction preserve the possibility to settle the CIT advance payments also on a monthly basis not later than the 15th of the reporting month.

According to the amended Instruction, the tax authorities should assess the CIT advance payments based on the financial statements provided by the taxpayer adjusted with the results of any tax audit performed. The calculation formula of the CIT advance payments has not changed. The CIT advance payments should be notified by the authorities to the taxpayer by 15 December of the preceding year for the period January – April and by 15 April for the period May – December.

Tax losses

Pursuant to recent amendments, a tax loss cannot be carried forward if the ownership of share capital or voting rights of a person changes by more than 50 percent in number or value. According to the previous provisions, this percentage was 25.

Deductible expenses

Scholarships paid by private and public educational institutions shall be considered deductible expenses (up to the level specified in the Decision of the Council of Ministers) with the only condition that, at the beginning of the academic year, these institutions provide to the Ministry of Education and Science the number of students and the amount of scholarships to be awarded.

Tax on transfer of the ownership of immovable property

The amended Instruction abolishes the table with tax rates applicable for the transfer of ownership of immovable property.

Entry into force

Instruction No.10/2013 dated 25 February 2013 was published in the Official Gazette, No. 27 on 8 March 2013 and enters into force 15 days after its publication in the Official Gazette.

For Information

Arkadiusz Mierzejewski
Partner, Tax
Tel: +355 (4) 2274 524
Fax: +355 (4) 2235 534
arekmierzejewski@kpmg.com

Alba Paparisto
Senior Manager, Tax
Tel: +355 (4) 2274 524
Fax: +355 (4) 2235 534
apaparisto@kpmg.com

In this issue

Corporate income tax advance payments

Tax losses

Deductible expenses

Tax on transfer of the ownership of immovable property

Entry into force

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