• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/5/2014

Albania - Transfer pricing rules, procedures are enacted 

June 5: New provisions in Albania’s tax law introduce transfer pricing concepts and define related parties, controlled / uncontrolled transactions, and advance pricing agreements (APAs).

The new measures were included in legislation passed by the Albanian Parliament as Law No. 42/2014 (24 April 2014).

For these purposes, a “controlled transaction” is one between related parties if between an Albanian taxpayer and a foreign taxpayer (domestic transactions are excluded).

Transfer pricing methodology

The new provisions establish the transfer pricing methods to be used by taxpayers in controlled transactions (depending on the specifics of the transaction). If, however, the taxpayer can show that none of the methods can be used in a reasonable manner, so to apply the market principles in the controlled transactions, then the taxpayer can select another appropriate transfer pricing method.

If a taxpayer engages in two or more controlled transactions, under the same or similar circumstances and that are economically related or in consequence or combination of each other and cannot be reliably analyzed separately, then these transactions can be combined and then be subject to the comparability analysis and application of transfer pricing method.


A taxpayer must present to the tax authorities, within 30 days after a request, such transfer pricing documentation that demonstrates that the taxpayer has analyzed the transaction for transfer pricing purposes. Future guidance concerning the contents of the transfer pricing documentation will be issued by the Minister of Finance.

Also, taxpayers engaged in controlled transactions with income flows above a certain threshold amount must present to the tax authorities an annual notification and report for such controlled transactions.


A taxpayer may enter into an advance pricing agreement (APA) with the tax authorities that will establish conditions to be satisfied with respect to controlled transactions, again in compliance with the market principles. With an APA, there can be no transfer pricing adjustments made as long as the identified conditions are fulfilled.

Read a May 2014 report prepared by the KPMG member firm in Albania: Amendments to the Albanian Tax Legislation related to Transfer Pricing

Contact a tax professional with KPMG's Global Transfer Pricing Services.

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