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ISSUE 02/14 | FEBRUARY | 2014 - TAX LEGISLATION

ISSUE 02/14 | FEBRUARY | 2014 - TAX LEGISLATION

Instruction no.2, date 17.1.2014 On several additions and amendments to instruction no. 26, date 4.9.2008 “On national taxes”, as amended.

Tax on petrol and diesel fuels

The tax on petrol and diesel fuels increases, from 7 ALL/liter to 17 ALL/liter.

Royalty tax

When the holder of the exploitation permit sells for final domestic consumption mineral products or sub-products, he shall pay the royalties at the second level banks on behalf of the regional directorate where he is registered for the entire amount of sales.

These taxpayers have the obligation to:

  1. Submit a declaration for each month, no later than 15 days after the end of the month in which the sales were performed
  2. Pay the royalties for the relevant month on or before the due date as set for declarations;
  3. The declaration for the payment of the royalties shall be submitted based on the method as foreseen in the law “On tax procedures”, at the regional tax directorate where the natural/legal person holding the mineral permit or export permit in case of export to third parties.

Tax on plastic packages

The tax on plastic packages is set at 100 ALL/kg and it shall be applied to imports and local production. Only for the domestic recycling industry, the tax on packages manufactured from recycling of plastic materials produced within the country. Only for the domestic recycling industry, the tax the for packages manufactured from plastic material recycling produced within the country is set at 50 ALL/kg, provided that the subject proves the fact through its production technologic card, import declarations for raw materials and the documentation for the purchase of raw materials within the country.

Tax on glass packages

This tax is set at 10 ALL/kg and is applied to imports and to the domestic production.

The importing subject in application to the tax on glass packages shall take measures in order to distinguish the type of packages for the imported products.

All subjects manufacturing plastic and glass packages shall submit at the regional directorate where they are registered, the following documents:

a) license/permit/approval from the relevant institution for the manufacturing of disposable plastic or glass products;

b) copy of the production technologic card.

Any changes in the technologic card shall be notified to the tax authority one month before.

CMD No. 24, date 22.1.2014 “On the setting of the rules for authorizations issued by the Ministry of Health for the import of unregistered medicines”

The application for import authorization for any unregistered medicine shall be submitted at the Pharmaceutical Directorate, in the Ministry of Health, from licensed subjects for the import of such medicines. In the application requiring the relevant authorization for the import of unregistered products, for each unregistered medicine the following shall be indicated: name, active principle, dosage, pharmaceutical form, quantity, price for medicine unit, name and address of the authorization holder for market launch of the medicine and/or the manufacturing company, a short description for usage.

The authorization for the import of unregistered medicines is issued only for those medicines that are not registered at the National Center of Medicine Inspection and is valid for a two-month period from the moment of issuance.

The price of the medicine for which the import authorization is issued shall not change for a 1-year term from the date the medicine enters the Republic of Albania. Exceptionally, within the said term and upon request, authorizations may be issued for the import of medicines having same price or lower price compared to the price declared for the first time the same year.

TAX LEGISLATION

Instruction no. 4, date 25.1.2015 on several additions and amendments in the instruction no.24, date 2.9.2008 “On the tax procedures in the Republic of Albania”, as amended”.

The following amendments were applied:

The local taxes on the small business and the tax on personal income is defined as simplified taxation on the small business and it is not managed anymore in the tax offices of the central authority but it will be managed by the regional tax directorates.

  1. The term within which the notification is received or is considered to be received by the taxpayer regarding the tax assessment was changed from 7 days to 10 days from the date it is sent by mail.
  2. The method of payment of the tax obligation as object of the claim has changed. The methods used are the payments and the bank guarantees, thus the claimant may put a bank guarantee for the relevant amount.
  3. The term for appealing the results of the tax inspection is changed from 5 days to 15 days.
  4. The transaction value for cash payments is changed from 300.000 to 150.000 ALL.

The taxpayers, natural or legal persons, merchants, carrying out transactions or purchases in cash, and when the transaction value is higher than 150 000 ALL, will be punished by a fine of 10% of the value on each transaction.

The fine will apply to the purchaser and the seller in case both are legal and/or natural merchant persons and the purchaser has carried out a cash payment towards the seller.

In case the purchaser has carried out a cash payment at the bank account of the seller, the fine is applied only to the purchaser. Likewise, in case the seller as authorized by the purchaser withdraws cash from the bank account of the purchaser, the fine is applied to the seller.

Joint Instruction no.673/2, date 28.1.2014 “On the setting of the list of goods and services used during the exploration period in petroleum operations by petroleum exploration companies exempted from the VAT payment, and the exemption procedures.

The exemption from the value-added tax includes:

  1. The providing of services during the exploration period in petroleum operations carried out by petroleum exploration companies (contractors) and their subcontractor in new oil and gas fields in compliance with the petroleum agreements.
  2. The import of goods and services included in the good value subject to custom procedures for the carrying out of petroleum operations during the exploration period by the contractors and subcontractors.
  3. The supply of goods for the fulfilling of the petroleum operations during the exploration period by contractors for each other or by subcontractors for their contractors, regarding imported goods, which are exempted from VAT.

List of VAT exempted goods and services for petroleum exploration operations :

  1. Geological and geophysical research:
    • mapping and surveying field work;
    • Laboratory analysis of samples and data;
    • Processing and interpretation of geological-geophysical data
  2. Geophysical works through different methods
    • Transport of technical equipment and technology, and construction of infrastructure for ground, marine and laboratory field work;
    • registration of ground and maritime field data;
    • processing of ground and maritime field data and registration
    • Geological-geophysical interpretation of the processed data.
  3. Drilling of oil and gas exploration wells:
    • Construction of roads to reach the well drilling platform;
    • Construction of the well platform;
    • The full range of services necessary to support the well drilling;
    • Transport and installation of the drilling rig;
    • Geophysical measurements on the well;
    • Well appropriation for the identification of oil and gas;
    • Analysis of samples as acquired during the drilling activity; 
    • Construction of technological and reservoir transport roads, and storing of hydrocarbons that may be produced during the exploration period;
    • Measurements for the well drilling orientation;
    • Supply with chemicals and materials for the preparation of the cleaning liquid;
    • Transport and installation of the sea drilling platform;
    • Positioning of the sea platform according to the project coordinates;
    • Transport of employees involved in the operations by helicopter or ship;
    • Supply with materials and food in the sea platform;
    • Transport for the disposal of waste produced during the well drilling operation process.
  4. Projects, technical and technological research for:

The supply of goods and services, which are not directly related to the exploration operations, defined as “exploration”, such as, but not limited to internet and phone services, accommodation, legal, economic and financial advice, construction of offices, transport, insurance services, safety and security services, will not be subject to such exemptions. 

  • Construction projects for well drilling sites, linking roads, and support infrastructure;
  • Technological projects for the well drilling and carrying out of the relevant analysis and measurements, including the well appropriation;
  • Construction and technological projects for linking lines and reservoirs for hydrocarbons during the exploration period