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Announcement on the law “On the payment and deletion of tax liabilities, beneficiaries and deadlines”

Dear taxpayers!

The Law No. 33/2017, dated 30/03/2017 “On the payment and deletion/remission of tax liabilities, customs duties, and the removal from circulation of the transport vehicles after the deletion/remission of the tax liabilities” has been published in the Official Journal No. 85, dated April 21st, 2017.

The law shall enter into force 15 days after publication in the Official Journal, specifically on May 6th, 2017. Please find below the main issues defined in this law.

Which are the beneficiary entities by this law?
Below are the beneficiaries as designated by this law:  
a) the entities registered in the active, passive register or deregistered due to tax liabilities against the central and local Tax Administration, as per the Articles 5, 6, 7 and 11 of this law;  
b) the debtor entities against the Custom Administration related to duties as per the Articles 9, 10 and 11 of this law;  
c) the entities that own transport vehicles as per the definition of Article 12 of this law.

Entities that do not benefit from the law.
The following do not benefit from the deletion/remission of liabilities provided for by this law;
-Entities that have tax/custom liabilities and duties, which have been sanctioned with a court injunction for criminal offences in the area of taxes and/or customs, in line with the respective legislation.  
Tax liabilities deleted/remitted completely and unconditionally.   
The following outstanding tax liabilities that belong to the tax period from December 2010 and prior to that date shall be unconditionally deleted/remitted:
1. Those that appear as registered in the account of the entity, apart from the social security and health care contributions, as well as unless provided otherwise by this law.  
2. The outstanding liabilities, defined pursuant to the Law No. 9632, dated 30/10/2006 “On local tax system”, as amended.   
3. The administrative penalties (fines) and late payment interests for social and health care insurances that appear as registered in the entity’s account.
Tax liabilities that are deleted/remitted partially and on condition.    
1. The following shall be deleted/remitted:
• fines,
• late payment interests 
that appear as outstanding on the date of entry into force of this law, as registered in the entity’s account, provided that by 31/12/2017, to completely pay the duties/taxes/fees/contribution for:  
a) tax liabilities that belong to the tax periods January 2011 – December 2014, applied as per the tax type;  
b) contributions of social securities and health care insurances that belong to the tax periods January 2011 – December 2014;  
c) outstanding local taxes/fees that belong to the tax periods January 2011 – December 2014.   
This procedure shall be implemented even in case of payment of duties/taxes/fees/contributions prior to the entry into force of this law.
Deletion/remission of other tax liabilities  
The following tax duties shall be deleted/remitted despite the tax period to which they belong:  
a) tax liabilities, including duties/contribution/taxes/fees, late payment interests and administrative penalties for natural and legal persons entities that appear as deregistered at the NBC with a court decision or deregistered at the Tax Administration until entry into force of this law;  
b) tax administrative penalties (fines) automatically calculated by the system for late declaration, as per the Article 113 of the Law No. 9920, dated 19/08/2008 “On tax procedures in the Republic of Albania”, as amended, until 31/12/2016, including also penalties related to the deadline of employees declaration;   
c) administrative penalties (fines) for late submission of the decision on result destination and late submission of the applied financial statements, pursuant to the Law No. 8438, dated 28/12/1998 “On income tax”, as amended, calculated until 31/12/2016;  
ç) administrative penalties (fines) for failure to declare on time, for unsubmitted declarations provided that each unsubmitted declaration is submitted until 30/06/2017;  
d) administrative penalties (fines) for authorized companies, envisaged in Article 123 of the Law No. 9920, dated 19/08/2008 “On tax procedures in the Republic of Albania”, as amended, identified in the account of the entity via the observation-act until 31/12/2016; 
dh) administrative penalties (fines) due to the application of the provisions of Law No. 99/2015 “On some addenda and amendments to the Law No. 9920, dated 19/08/2008 “On tax procedures in the Republic of Albania”, as amended, abolished by the Constitutional Court;  
e) the outstanding tax liabilities, as per the definition in paragraph 1 of Article 2 of this law shall be deleted/remitted apart from the social security and health care contributions, as well as the outstanding and self-declared liabilities of the companies that operate in the energy sector and have a 100 percent state-owned capital, that belong to the tax periods from 01/01/2011 to 31/12/2013.

Caution:
The fines and late payment interests for contributions of insurances and self-declared liabilities for these periods shall be deleted/remitted provided that by 31/12/2017 the duties/taxes/fees/contributions are fully paid. 
Regarding liabilities of these companies for January-December 2014, the fines and late payment interests that appear outstanding at the date of entry into force of this law shall be deleted/remitted, provided that by 31/12/2017 the duties/taxes/fees/contributions are fully paid;

ë) the outstanding tax liabilities, as per the definition in paragraph 1 of Article 2 of this law shall be deleted/remitted apart from the social security and health care contributions of the companies that operate in the water supply and sewerage sector and have a 100 percent state-owned capital, that belong to the tax periods from 01/01/2011 to 31/12/2013. 
The fines and late payment interests for contributions of insurances for these periods shall be deleted/remitted provided that by 31/12/2017 the contributions are fully paid. 
Regarding liabilities of these companies for January-December 2014, the fines and late payment interests that appear outstanding at the date of entry into force of this law shall be deleted/remitted, provided that by 31/12/2017 the duties/taxes/fees/contributions are fully paid;     
f) the tax effects for outstanding liabilities shall be deleted/remitted, whether they are registered or not, or under inspection, due to not issuing within the same tax period of the supply of the document that certifies exemption from VAT or due to failure to issue such a certificate, provided that, in any case, the application at the National Agency of Natural Resources has been submitted by 31/12/2014;   
g) the fines and late payment interests shall be deleted/remitted for contributions of social securities and health care insurances for the self-employed in agriculture, that belong to the periods from January 1st, 2011 until December 31st, 2016, provided that the contributions are paid by 31/12/2017.

Compensation of debt liabilities through the credit balance and VAT excess credit.

Those entities that have excess credit of VAT or of another tax shall benefit from the deletion/remission of tax liabilities as per the Articles 5, 6, 7 and 11 of this law, upon compensation (deduction) of the excess equal to the outstanding amount of taxation.

In case that the excess credit cannot cover the whole amount of the outstanding taxation, then the remaining part shall be paid as per the Article 6 of this law, and then the administrative penalties shall be deleted/remitted.   

The definitions of this Article on compensation shall be automatically implemented, without any control, apart from the cases provided for in paragraph 1 of Article 11 of this law, with reference to which this Article is implemented when the entity resigns from the administrative appeal or from the right to lodge a claim/appeal/recourse at any stage and phase of the trial at the competent court.    

Caution:
The liabilities on social securities and health care insurances shall not be subject to compensation.   
Also, tax liabilities that are under process of appeal
The entity that is under process of administrative appeal or court process for tax liabilities, shall be subject to this law if the entity resigns from the administrative appeal or from the right to lodge a claim/appeal/recourse at any stage and phase of the trial at the competent court.

Procedures for collection of liabilities

For liabilities that are deleted/remitted pursuant to this law, the Tax Administration shall interrupt the procedures of liabilities forced collection in case it has already started them.

With reference to the tax liabilities that do not benefit from forgiveness as per this law, the procedures for liabilities collection shall continue to be carried out in line with the definitions in the law on tax procedures.

The procedure of removing from circulation the vehicles that are not in use and deleting/remitting the tax obligations for these vehicles  

All vehicles registered with the General Directorate of Road Transport Services shall be removed from circulation if no actions have been taken for these vehicles after December 31st, 2011 and afterwards.   

These vehicles shall be removed from circulation upon deleting/remitting the outstanding tax liabilities on them, like: 
-the tax of annual vehicles registration,
-the annual circulation tax, 
-the annual tax on used vehicles, the tax on luxury vehicles, 
-the fines calculated due to failure to pay taxes. 

The responsible entities/persons shall be entitled to go at the General Directorate of Road Transport Services by 31/12/2017 to perform for free the actions of removing from circulation the vehicle or to ask for such procedure not to be carried out and keep the vehicle in active status.   

The persons who go and ask for the procedure of removing the vehicle from circulation not to be carried out and keep the vehicle in active status, shall have their tax liabilities deleted/remitted for the periods December 2010 and prior to that, provided that they pay the liabilities for January 2011 and afterwards, apart from the fines and late payment interests for January 2011 to December 2014, which shall be deleted/remitted.   

If the interested persons shall not come by 31/12/2017 and ask to keep the vehicle status active, the General Directorate of Road Transport Services shall remove for free the vehicle from circulation and shall delete/remit its tax obligations.  

The deadline for law implementation and the right to appeal   

The right of the entities that benefit from the provisions of this law shall be exercised by 31/12/2017. The entities, whose deletion/remission of liabilities is applied on condition, shall not benefit any deletion/remission of the liabilities if they do not fulfil the conditions by the deadlines defined in this law.

With reference to any entity that benefits or not from the deletion/remission of the liabilities, the respective body shall issue an administrative act for this purpose, by notifying the entity as well.

The entities, that based on the decision of the respective administrations do not benefit from the deletion/remission, as per this law, shall be entitled to lodge an appeal at the administrative court in line with the effective legislation.

Thank you!