The Instruction of the Minister of Finance “On implementing the Law No. 33/2017 “On the payment and deletion/remission of tax liabilities...
The Instruction of the Minister of Finance No. 14, dated 03/05/2017 “On implementing the Law No. 33/2017 “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. 99/2017, dated 08/05/2017.
This instruction shall enter into force upon publication in the Official Journal.
ENTITIES THAT DO NOT BENEFIT
- 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, shall not benefit from the deletion/remission of liabilities.
Within 30 (thirty) days upon entry into force of this instruction, the Tax Administration shall prepare the list of taxpayers that do not benefit from the deletion/remission of liabilities. This list shall be updated each month.
The official announcement of taxpayers that are exempted from the implementation of the law shall be done on the official website of the Tax Administration within 45 days upon entry into force of this instruction. Such announcement shall be updated each month in line with the injunctions for criminal offences in the area of taxes taken after such deadline.
DELETION OF TAX LIABILITIES (UNCONDITIONAL DELETION)
-The outstanding tax liabilities as per the definition in paragraph 1 of Article 2 of the law that belong to the tax periods December 2010 and prior to that date and which also appear as registered in the entity’s account shall be automatically deleted/remitted, except for the contribution of social securities and health care insurances.
This includes any tax liability registered on the e-system and off the system, but which is registered in the accounting balance of the Regional Directorates of Taxes.
-The excise duties administered by the Tax Authority that belong to the periods until December 31st, 2010 shall be deleted/remitted.
-The outstanding liabilities determined by Law No. 9632/2006 “On local tax system”, as amended, that belong to the tax periods from December 2010 and prior to that date as per the registrations carried out from the local government, shall be deleted/remitted.
-The administrative penalties (fines) and late payment interests on social securities and health care insurances that belong to the tax periods December 2010 and prior to that date, which appear as registered in the entity’s account, shall be automatically deleted/remitted.
Clarification:
With reference to those cases that bear the date of 31/12/2010 and prior to that on the notice of assessment or observation-act, whereas the accounting date has been carried out after such date, the deletion/remission shall be manually performed by the relevant structures.
PARTIAL DELETION/REMISSION OF TAX LIABILITIES PROVIDED THAT DUTIES/TAXES/FEES/CONTRIBUTIONS ARE PAID (DELETION ON CONDITION).
- 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 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.
Such definition shall be implemented also in cases when the duties/taxes/fees/contributions are paid prior to the entry into force of the law.
If for a certain period the entity does not have any taxes to pay for the tax periods as per the type of taxation belonging to the periods January 2011 to December 2014, given that he has already paid it before or taxation used to be zero, then he shall benefit from the application of deletion/remission of fines and late payment interests in line with the definition of Article 6 of the law and this paragraph of instruction.
With reference to those cases that bear the date of 31/12/2014 and prior to that on the notice of assessment or observation-act, whereas the accounting date has been carried out after such date, the deletion/remission shall be manually performed by the relevant structures.
Within 30 (thirty) days upon entry into force of the law, the General Directorate of Taxes shall officially send to the General Directorate of Customs the liabilities of taxpayers related to excise/fines/late payment interests and administrative penalties for the tax period January 2011 to December 2014 according to the respective periods. The General Directorate of Customs shall apply the procedure of partial deletion/remission of excise duties for this taxation, pursuant to the provisions of Article 6 of the law.
DELETION/REMISSION OF OTHER TAX LIABILITIES.
The 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 shall be automatically deleted/remitted.
The central Tax Authority shall prepare the list of entities as per the above definitions, within 30 (thirty) days upon entry into force of the instruction.
The taxpayers benefitting from this law as per the prepared list, shall be automatically deregistered by the system upon the performance of deletion of liabilities from the system, with the effective date of deregistration, in line with the list, without necessarily submitting the unsubmitted declarations and payrolls.
- Pursuant to Article 7 of the law, the 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 shall be automatically deleted/remitted, including also penalties related to the deadline of employees’ declaration despite the tax period they belong to.
- The administrative penalties (fines) for late submission of the decision on result destination and late submission of the applied financial statements, pursuant to the law “On income tax”, as amended, calculated until 31/12/2016, shall be automatically deleted/remitted despite the tax period they belong to.
- The administrative penalties (fines) for failure to declare on time, for unsubmitted declarations provided that each unsubmitted declaration is submitted until 30/06/2017, shall be automatically deleted/remitted, despite the tax period they belong to.
- The 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, shall be automatically deleted/remitted despite the tax period they belong to.
- The administrative penalties (fines) due to the application of the provisions of Law No. 99/2015 “On some addenda and amendments to the law “On tax procedures in the Republic of Albania”, abolished by the Constitutional Court, shall be automatically deleted/remitted despite the tax period they belong to.
- The outstanding tax liabilities, as per the definition in paragraph 1 of Article 2 of the 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. 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.
- Pursuant to the references above, the Tax Authority shall be responsible to identify and determine the entities of this sector that fulfil the conditions. It must clearly determine the tax obligation that will be deleted as per the legal definitions. With reference to the payment of the liabilities of this sector, a plan of periodical payments shall be established, which will be extended from the entry into force of the law until December 2017, related to the payment of duties/taxes/contributions by 31/12/2017.
- The detailed information with the entities of this sector and the liabilities to be deleted/remitted shall be prepared by the Regional Directorates of Taxes and shall be sent to the General Directorate of Taxes within 10 (ten) days upon entry into force of the law.
- 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.
- The Tax Authority shall be responsible to identify and determine the entities of this sector that fulfil the conditions. It must clearly determine the tax obligation that will be deleted as per the legal definitions. The detailed information with the entities of this sector and the liabilities to be deleted/remitted shall be prepared by the Regional Directorates of Taxes and shall be sent to the General Directorate of Taxes within 30 (thirty) days upon entry into force of the law.
- The tax effects for outstanding liabilities shall be 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. Based on this provision, the beneficiaries shall be those cases that have submitted an application to the NANR by 31/12/2014 and the latter has not issued any document/certificate on the case. In any case that there is a document/certificate issued by NANR, which has not approved exemption from VAT, shall not be subject to the provisions of paragraph “f” of Article 7 of the law.
Clarification:
-For each entity under process of inspection, a minute shall be kept on such purpose, whereby the cases are listed analytically as well as the application date at the NANR, if there is a certificate from the NANR or not, if it has been approved or not, if NANR has expressed its opinion or not, the date of approval/refusal, if any. For these taxpayers that are under inspection process not yet terminated, the respective RDTs shall take the measures to conclude the tax inspection, keeping in mind the deadlines provided for in the law.
- The Tax Authority shall identify the taxpayers in line with the above definitions regarding the amount of liability, type of liability, period and unfulfilled condition.
The detailed information with the entities that fulfil the above condition and the liabilities to be deleted/remitted shall be prepared by the respective Regional Directorates of Taxes and shall be sent to the General Directorate of Taxes within 30 (thirty) days upon entry into force of the law.
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, excluding fines and late payment interests, as well as tax liabilities not entered into the system, that belong to the tax periods until 31/12/2010.
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 and late payment interests shall be deleted/remitted.
The definitions 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.
-The compensation of VAT excess credit and any other type of taxation must be firstly used to match the liabilities within the taxation itself and then transfer to other taxes. The social security and health care insurances liabilities shall be exempted from this compensation.
Clarification:
- The liabilities for social security and health care insurances contributions shall not be subject to compensation.
TAX LIABILITIES AND CUSTOM DUTIES UNDER PROCESS OF APPEAL.
-The entity that is under process of administrative appeal or court process for tax liabilities, shall be subject to this process 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.
-All taxpayers shall benefit from the implementation of the law on deletion for fines provided for in Article 7 (b), (c), (ç), (d) (dh), despite that they might be in a process of appeal.
Thus, the list of entities that are in a trial process for the amount and period of the appealed liability, shall be defined from the tax/customs authority within 30 (thirty) days upon entry into force of the instruction. The list of entities that are in a trial process shall be published in the official website of the tax/customs administration. When the entity submits at the tax/customs authority the act of resignation from the administrative appeal or from the right to lodge a claim/appeal/recourse, it shall be part of the law on remission.
-Within 10 (ten) days upon entry into force of this instruction, the Regional Directorate of Taxes shall review all agreements on payment in instalments of the outstanding liability, in order to include these taxpayers in the process of reviewing the law on deletion.
For liabilities that are deleted/remitted pursuant to this law, the Tax or Customs Administration shall interrupt the procedures of liabilities forced collection in case it has already started them.
For those tax liabilities that do not benefit from remission as per this law, the procedures of liabilities collection shall proceed in line with the definitions in Chapter XI “Forced collection of the outstanding tax liability” of Law No.9920, dated 19/05/2008 “On tax procedures in the Republic of Albania” as amended.
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 of liabilities is applied on condition, shall not benefit any deletion 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 of the liabilities, the respective body shall issue an administrative act for this purpose, by notifying the entity as well.
- Upon completion of the deletion/remission pursuant to the conditions defined in the Law No. 33/2017, the Tax Administration shall inform the taxpayers in the e-Filing system by means of a text message which shall say that: “Pursuant to the Law No. 33, dated 30/03/2017 “On the payment and partial deletion of tax liabilities, customs duties, and the removal from circulation of the transport vehicles after the deletion of the tax liabilities”, we would like to inform you that its effect has been included in your Financial Situation in the e-system”.
- The entities, that based on the decision of the respective administrations do not benefit from the deletion, as per this law, shall be entitled to lodge an appeal at the administrative court in line with the effective legislation.
- By 31/12/2017, the respective bodies shall delete from their accounting registers and the debtor’s account any liabilities to be deleted pursuant to this law.
- The General Director of Taxes shall determine the tasks and duties of each function and unit delegated for the implementation of this law, by means of an internal order.
- The General Directorate of Taxes shall establish a working group that will monitor the implementation of the law and this instruction by the relevant structures at central and regional level.
Thank you!