Page 5 - Central and Eastern European Transfer Pricing Review

Albania | 5 | 5

Albania

KPMG's Views on Transfer Pricing in Albania

Transfer pricing rules have been present for more than a decade in Albanian
income tax legislation, but detailed regulations on the application of these rules,
necessary pricing documentations, etc. have never been published by the Ministry
of Finance. However, due diligence should be taken with respect to the transfer
Country requests.
pricing rules stipulated in the Income Tax Law since the Albanian tax authorities are
becoming more aware of transfer pricing issues, and, in general, more often transfer
pricing questions arise during their tax audits or during double tax treaty application

Overviews Basic information or suggestions of the other company. should prepare and submit documentation
In particular, if one of the companies
presenting related parties transactions
Tax authority name
owns directly or indirectly at least
in the fnancial statements of the year in
Transfer Pricing Commission at the
question (i.e. income statement and note
50 percent of the shares in the
Albanian General Tax Directorate
other company, such companies are
of fnancial statements).
considered related parties. In addition,
Citation for transfer pricing rules
information must be disclosed?
or indirectly for at least 50 percent of
Articles 36 of the Law No. 8438 On companies which are owned directly What types of transfer pricing
Income Tax dated 28 December the shares by the same shareholder are Not applicable.
1998 considered related parties for transfer
pricing purposes. What are the consequences
Instruction No.5 dated 30 January of failure to prepare or submit
2006 of Income Tax What is the statute of limitations disclosures?
Regulation No.1 On Transfer Pricing on assessment of transfer pricing Not applicable.
dated 11 February 2002 adjustments?
There is no special statute of limitations
Effective date of transfer pricing on assessment of transfer pricing Transfer pricing study
rules adjustments. However, the general overview
General rules have been present status of limitation of 5 years may apply. Is preparation of a transfer pricing
since 28 December 1998, while the study required i.e. can the
latest amendments came into force Transfer pricing taxpayer be penalized for mere
on 11 February 2002. This documents failure to prepare a study?
observations relate to the latest disclosure overview
amendments and rules in force. Are disclosures related to transfer No.
pricing required to be prepared or Other than complying with a
What is the relationship threshold submitted to the revenue authority
for transfer pricing rules to apply on an annual basis (e.g. with the tax requirement per the previous
between parties? return)? question, describe the benefts, if
In general, the Law considers as related According to the Albanian tax legislation any, of preparing and maintaining a
transfer pricing study?
parties in Albania companies, if one there is no such requirement. However,
of the companies acts, or may act in accordance with the Albanian National Since there are no specifc requirements
according to the instructions, requests, regarding the documentation, preparing
Accounting Standards (or IFRS), a taxpayer a transfer pricing study provides a beneft

© 2013 KPMG Central and Eastern Europe Ltd., a limited liability company and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.