Peer Review Report Phase 2 Implementation of The Standard in Practice

GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
OF INFORMATION FOR TAX PURPOSES
Peer Review Report

Phase 2
Implementation of the Standard
in Practice
ALBANIA
Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Albania 2016
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
July 2016
(reflecting the legal and regulatory framework
as at May 2016)
This work is published on the responsibility of the Secretary-General of the OECD.

The opinions expressed and arguments employed herein do not necessarily reflect
the official views of the OECD or of the governments of its member countries or
those of the Global Forum on Transparency and Exchange of Information for Tax
Purposes.
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Please cite this publication as:

OECD (2016), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
Reviews: Albania 2016: Phase 2: Implementation of the Standard in Practice, OECD Publishing,
Paris. http://dx.doi.org/10.1787/9789264258730-en
ISBN 978-92-64-25872-3 (print)

ISBN 978-92-64-25873-0 (PDF)
Series: Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews
ISSN 2219-4681 (print)
ISSN 2219-469X (online)
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TABLE OF CONTENTS 3
Table of Contents
About the Global Forum 5

Executive summary 7
Introduction 13
Information and methodology used for the peer review of Albania 13
Overview of Albania14
General information on the legal system and the taxation system 15
Recent developments 19
Compliance with the Standards 21
A. Availability of information 21
Overview 21
A.1. Ownership and identity information 24
A.2. Accounting records 51
A.3. Banking information 59
B. Access to information 63
Overview 63
B.1. Competent Authoritys ability to obtain and provide information 64
B.2. Notification requirements and rights and safeguards 74
C. Exchanging information 77
Overview 77
C.1. Exchange of information mechanisms 78
C.2. Exchange of information mechanisms with all relevant partners 86
C.3. Confidentiality 87
C.4. Rights and safeguards of taxpayers and third parties 89
C.5. Timeliness of responses to requests for information 90
PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016
4 TABLE OF CONTENTS
Summary of determinations and factors underlyingrecommendations 95
Annex1: Jurisdictions response to the review report 99
Annex 2: List of Albanias exchange of information mechanisms 100
Annex3: List of all laws, regulations and other relevant material 106
ABOUT THE GLOBAL FORUM 5
About the Global Forum

The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
130jurisdictions, which participate in the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transparency and exchange of information for tax purposes. These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article26 of the
OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004. The standards have also been incorporated into
the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party. Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed. This process is
undertaken in two phases. Phase 1 reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange of information, while
Phase2 reviews look at the practical implementation of that framework. Some
Global Forum members are undergoing combined Phase1 and Phase2
reviews. The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review. The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the published review reports, please refer to www.oecd.org/tax/transparency and
www.eoi-tax.org.
Executive summary 7
Executive summary
1.
This report summarises the legal and regulatory framework for
transparency and exchange of information in Albania as well as the practical implementation of that framework. The assessment of effectiveness in
practice has been performed in relation to a three year period (1January
2012 through 31December 2014). The international standard, which is set out
in the Global Forums Terms of Reference to Monitor and Review Progress
Towards Transparency and Exchange of Information, is concerned with
the availability of relevant information within a jurisdiction, the competent
authoritys ability to gain timely access to that information, and in turn,
whether that information can be effectively exchanged on a timely basis with
its exchange of information (EOI) partners.
2.
Albania is a small state in the Balkan Peninsula, South-eastern
Europe, with a long Adriatic and Ionian coastline. In the early 90s Albania,
a formerly closed, centrally-planned state, started to transition to an openmarket economy. The importance of this transition has been reflected in the
legal and economic framework. Presently, exports and imports account for
more than one third and one half, respectively, of the Albanian economy.
Albanias major commercial partners are also EOI partners. Albania committed to implement the international standard of transparency and exchange
of information in 2012 and is member of the Global Forum. Albania is also a
member of many other international organisations including the Council of
Europe, the World Trade Organization and Moneyval.
3.
Relevant legal entities in Albania include joint stock and limited
liability companies, general partnerships and limited partnerships for which
there are sufficient ownership information requirements under the law. The
availability of ownership information in respect of relevant entities is generally maintained either with the National Registration Centre (NRC) or the
entity itself. However, a deficiency has been noted regarding the identification of the holders of bearer shares that were permitted under the Albanian
law until 2008. The current legislation does not provide for a mechanism
for the abolition or the conversion of bearer shares issued prior to 2008 into
nominative shares. Although there are several mechanisms ensuring that
8 Executive summary
information on the shareholders identity is available, it remains unclear
whether these mechanisms would be sufficient to identify owners of bearer
shares previously issued. Albanian authorities clarified that, although bearer
shares could have been issued by joint stock companies prior to 2008, in
practice they have no records of the existence of such bearer shares. The
Albanian competent authority confirmed that they have never received any
EOI requests on bearer shares or on companies that had issued such shares
either. Albanian authorities further explained that the concept of bearer
shares did not exist before 1992 because Albania was a centrally-planned
economy with no private companies. Since 2008, the Albanian laws require
joint stock companies to maintain a share registry in which the ownership of
all shares is recorded. Therefore, the issue of bearer shares does not seem to
be a material one at the present stage.
4.
Foreign companies with a sufficient nexus to Albania (e.g.being
resident for tax purposes) and foreign partnerships which carry on business in
Albania or have income, deductions or credits for tax purposes in Albania are
neither required to maintain nor provide to the authorities ownership information in all cases. It is recommended that Albania ensure the availability of
ownership information relating to foreign companies with sufficient nexus to
Albania and foreign partnerships carrying on business in Albania or having
income, deductions or credits for tax purposes in Albania in all cases.
5.
The concept of trust as it is under the common law does not exist
under Albanian law and Albania has not signed the Hague Convention of
1July 1985 on the Law Applicable to Trusts and on their Recognition. There
is, however, no obstacle in Albanian domestic law that prevents a resident
from acting as a trustee or for a foreign trust to invest or acquire assets in
Albania. In such cases, there is a combination of requirements under the tax
laws and the Law on the Prevention of Money Laundering and Terrorism
Financing (AML/CFT Law) in place ensuring the availability of identity
information of trustees, settlors and beneficiaries of a foreign trust administered by an Albanian trustee. Regulation of AML issues is under the overall
control of the General Directorate for Prevention of Money Laundering
(GDPML), which is also the Financial Intelligence Unit in Albania. In practice, the GDPML reported that supervisory outcomes of the period under
review showed that there was no case of trust operating in Albania.
6.
Foundations can be created in Albania but may only be formed as
not for profit entities (NPO). Overall, comprehensive obligations established
under Albanian NPO Law, tax laws and AML/CFT Law ensure the availability of information on the founders, beneficiaries and members of the
executive board.
7.
In Albania, a company (whether it is a joint stock company or
limited liability company) cannot be set up and take legal effect if it had
Executive summary 9
not registered with the NRC. Over the review period, it is noted, however,
that the various regulatory authorities, such as the NRC and the Centre of
Registration of Shares (CRS), did not have a system of oversight in place
to monitor compliance with the obligations to maintain and file ownership information and it is not apparent that sanctions for non-compliance
were enforced in practice. Albania is recommended to establish a system
of oversight in order to ensure that updated ownership information is being
maintained in respect of all relevant entities.
8.
All relevant Albanian entities as well as foreign entities performing economic activities in Albania are required under the accounting law
to keep accounting records. The requirements under the accounting law
are supplemented by tax and AML regulations. Availability of underlying
documentation is ensured by accounting and tax requirements. All taxpayers
subject to corporate income tax are obliged to keep accounting records according to the Albanian National Accounting Standards and IFRS. Sanctions will
be imposed on companies that fail to meet this obligation. Accounting records
and underlying documentation must be kept in Albania for at least five years.
In practice, compliance with accounting obligations under accounting and
tax law is supervised by the General Taxation Department (GTD). The GTD
checks compliance with accounting obligations during the course of tax audits,
which adopt a risk based approach. However, the adequacy of the GTDs oversight system could not be fully ascertained, as relevant statistical information
such as the compliance with filing requirements, sanctions applied to nonfilers and percentage of taxpayers subject to audit was not available. Albania
is recommended to enhance its system of oversight to ensure that accounting
information is being maintained by all relevant entities.
9.
With respect to banks and other financial institutions, Albanian
AML and accounting legislation imposes appropriate obligations to ensure
that all records pertaining to customers accounts as well as related financial
and transactional information are available. Banks are expressly prohibited
from establishing business relationships with or carrying out transactions for
anonymous customers.
10.
The Albanian competent authority has broad access powers to obtain
and provide the requested information. These powers include the power
to carry out tax audits within the premises of taxpayers and third parties,
inspect documents and make written requests. All information gathering
powers available for domestic purposes can be used for exchange of information purposes regardless of whether there is a domestic tax interest. Banks
are required to provide a wide range of bank information to the GTD and
enforcement provisions to compel the production of information including
criminal sanctions are contained under the tax law. Albania amended its Law
on Tax Practices (LTP) by introducing in December 2014 a new provision
10 Executive summary
clarifying the information gathering powers available to the GTD for collecting information for exchange of information purposes. This amendment
entered into force on 1January 2015. As a follow-up to the amendment to
LTP, the Albanian Ministry of Finance enacted regulations for determining
the procedures to gather information from all persons in accordance with the
provision of international tax treaties. As these provisions became effective after the review period and could not be tested, it is recommended that
Albania monitors their effectiveness to ensure the access to information for
purposes of exchanging with its treaty partners.
11.
Albanias domestic legislation does not require notification of the
taxpayer that is the object of an EOI request.
12.
Albania has an extensive exchange of information network covering 102jurisdictions through 40 double tax conventions (DTCs) and the
Convention on Mutual Administrative Assistance in Tax Matters, as amended
(Multilateral Convention). The great majority of Albanias agreements meet
the international standard. Some of Albanias older treaties do not contain
provisions equivalent to Article26(4) and (5) of the OECD Model Tax
Convention. Although Albania does not need the referenced provisions to
exchange information in accordance with the standard, they may be necessary for a small number of its treaty partners (whose legal framework has
not yet been assessed by the Global Forum). The confidentiality of information exchanged in Albania is protected by obligations implemented in the
exchange of information agreements, complemented by domestic legislation,
which provide for tax officials to keep information confidential. There are
enforcement measures in place to deter and prevent any breach in confidentiality of information exchanged by means of EOI agreements.
13.
Over the review period, Albania received 16EOI requests, of which
full responses were provided within 90days for 15 of the requests, and the
remaining request was answered within a year. Peers were satisfied with
the EOI assistance provided by Albania and no issue was raised. Whilst
Albania managed to respond to the majority of incoming EOI requests in a
timely manner, it was found that there are gaps in organisational processes
and manpower issues which can be improved to ensure effective exchange
of information. EOI operated on an ad-hoc basis and is handled by the Tax
Treaties Unit in the GTD. The Tax Treaties Unit has a diverse portfolio
which, besides handling inbound and outbound EOI requests, includes the
interpretation of tax treaties for requests to claim treaty benefit such as lower
withholding tax rates, direct taxes and national social contributions. During
the review period, the Tax Treaties Unit was understaffed to perform all its
functions and the management position was vacant for some of the time.
Moreover, there were no formal internal processes to keep records of its EOI
work and statistics in this regard have only been developed very recently. It is
Executive summary 11
recommended that Albania ensure that appropriate organisational processes

and resources are put in place so that requests are responded in a timely
manner in all cases.
14.
Albania has been assigned a rating1 for each of the 10 essential elements as well as an overall rating. The ratings for the essential elements are
based on the analysis in the text of the report, taking into account the Phase1
determinations and any recommendations made in respect of Albanias legal
and regulatory framework and the effectiveness of its exchange of information in practice. On this basis, Albania has been assigned the following
ratings: Compliant for A.3, B.2, C.1, C.2, C.3 and C.4; Largely Compliant for
A.2, B.1 and C.5; and Partially Compliant for A.1. In view of the ratings for
each of the essential elements taken in their entirety, the overall rating for
Albania is Largely Compliant.
15.
A follow up report on the steps undertaken by Albania to answer
the recommendations made in this report should be provided to the PRG by
June 2017 and thereafter in accordance with the process set out under the
Methodology for the second round of reviews.
1.
This report reflects the legal and regulatory framework as at 18April 2016. Any
material changes to the circumstances affecting the ratings may be included in
Annex1 to this report.
Introduction 13
Introduction
Information and methodology used for the peer review of Albania

16.
The assessment of the legal and regulatory framework of the
Republic of Albania (hereafter Albania) was based on the international
standards for transparency and exchange of information as described in
the Global Forums Terms of Reference to Monitor and Review Progress
Towards Transparency and Exchange of Information For Tax Purposes, and
was prepared using the Global Forums Methodology for Peer Reviews and
Non-Member Reviews. The assessment has been conducted in two stages:
the Phase1 review assessed Albanias legal and regulatory framework for
the exchange of information as at May 2015, while Phase2 review assessed
the practical implementation of this framework during a three-year period
from 1January 2012 to 31December 2014 as well as amendments made to
this framework since the Phase1 review up to 17May 2016. The following
analysis reflects the integrated Phase1 and Phase2 assessments.
17.
The assessment was based on the laws, regulations, and exchange
of information mechanisms in force or effect as at 17May 2016, Albanias
responses to the Phase1 and Phase2 questionnaire, information supplied
by exchange of information partners and explanations provided by Albania
during the on-site visit that took place from 18-22January 2016 in Tirana,
Albania. During the on-site visit, the assessment team met with officials and
representatives of the Ministry of Finance, General Taxation Department,
National Registration Centre, Centre of Registration of Shares, Central
Bank of Albania and Albanian Financial Supervisory Authority (Financial
Intelligence Unit).
18.
The Terms of Reference break down the standards of transparency and
exchange of information into 10essential elements and 31enumerated aspects
under three broad categories: (A)availability of information, (B)access to
information, and (C)exchange of information. This review assesses Albanias
legal and regulatory framework and its application in practice against these
elements and each of the enumerated aspects. In respect of each essential element a determination is made that either: (i)the element is in place, (ii)the
14 Introduction
element is in place but certain aspects of the legal implementation of the
element need improvement, or (iii)the element is not in place. These determinations are accompanied by recommendations for improvement where
relevant. In addition, to reflect the Phase2 component, recommendations are
made concerning Albanias practical application of each of the essential elements and a rating of either: (i)compliant, (ii)largely compliant, (iii)partially
compliant, or (iv)non-compliant is assigned to each element. As outlined in
the Note on Assessment Criteria, an overall rating is applied to reflect the
jurisdictions level of compliance with the standards. A summary of findings
against those elements is set out at the end of this report.
19.
The Phase1 and Phase2 assessments were conducted by assessment
teams comprising expert assessors and representatives of the Global Forum
Secretariat. The 2015 Phase1 assessment was conducted by a team which
consisted of two expert assessors: Ms. Silke Voss, Senior Tax Specialist,
Federal Ministry of Finance of Germany and Mr. James Karanja, Principal
Revenue Officer, Kenya Revenue Authority; and two representatives of the
Global Forum Secretariat: Ms. Wanda M. Montero Cuello and Mr. Boudewijn
van Looij. The 2016 Phase2 assessment was conducted by an assessment
team, which consisted of two expert assessors: Ms. Silke Voss, Senior Tax
Specialist, Federal Ministry of Finance of Germany and Mr. James Karanja,
Principal Revenue Officer, Kenya Revenue Authority; and two representatives
of the Global Forum Secretariat: Ms. Elaine Leong and Ms. Renata Teixeira.
Overview of Albania
20.
Albania is a small sized state in Southeastern Europe, bordering the
Adriatic Sea and Ionian Sea, between Greece in the south and Montenegro
and Kosovo to the north, with an area of 28748km2 and a population of
about 2.8million. Tirana (Tiran) is the capital and the largest city of the
country. The official language is Albanian but Greek, Vlach, Romani and
Slavic dialects are also spoken. The Albanian Lek is the national currency
(LEK138.01= EUR1 as at 1March 20162).
21.
Albania has undergone a transition from almost half a century of
communism in the early 1990s. The transition faced by Albania includes
multiple spheres, most importantly, a political transition to democracy and an
economic transition from centralised planned economy to market economy.
The first constitution under the new regime was enacted in 1999. Since then,
many complementary regulations have been issued or amended in order to
put in place the new political system. Many of these regulations have been
written according to the European standard.
2.
http://www.bankofalbania.org/.
Introduction 15
22.
Albanias 2015estimated GDP was EUR10.3billion. The services
sector accounts for around 45.3% of the Albanian economy and includes
trade, hotels and restaurants, transportation, post and communication and
other services; the production sector which includes construction, industry
and agriculture, hunting, forestry and fishing represents the remaining 41.6%
of its economy, as a percentage of the GDP. In 2015, exports and imports
accounted for 8.7% and -30.4% of the GDP, respectively. The main trading
partners of Albania are European Union (EU) member states and the Russian
Federation (Russia). In terms of exports, the main partners in Q1-2016 were
Italy (59.6%) followed by Greece (4.4%), Spain (2%), Kosovo (5.9%), Turkey
(0.5%) and Germany (3.7%). The main importing partners were Italy (30.6%),
Greece (7.8%), the Peoples Republic of China (China) (9.9%), Germany
(7.1%) and Turkey (7.9%). Albanias main exporting products include textiles
and footwear; asphalt, metals and metallic ores, crude oil; vegetables, fruits
and tobacco.
23.
Albania is a member of many international organisations including the United Nations, Council of Europe, the World Trade Organization,
Moneyval, UNESCO, World Health Organization and others. Albania is
an official candidate for membership in the European Union. Albania is a
member of the Global Forum on Transparency and Exchange of Information
for Tax Purposes since January 2012. Albania is a Party to the Multilateral
Convention, which entered into force for Albania on 1December 2013.
General information on the legal system and the taxation system

Governance and the legal system
24.
Albania is a parliamentary democratic republic with a multi-party
system. The head of state is the President, elected by the Parliament (the
Assembly of the Republic of Albania), for a five-year term. Most executive power lies with the Prime Minister, who is the head of the Cabinet of
Ministers and is appointed by the President on the proposal of the party
or coalition of parties that has the majority of seats in the Parliament. The
remainder of the Cabinet is appointed by the Prime Minister. The appointed
Cabinet needs to be approved by the Parliament. The Parliament (Kuvendi
i Shqipris or short Kuvendi) is unicameral and consists of 140 members
elected by popular vote based on proportional representation. The Kuvendi is
elected for a term of four years.
25.
The country consists of 12counties or prefectures (Berat, Diber,
Durres, Elbasan, Fier, Gjirokaster, Korce, Kukes, Lezhe, Shkoder, Tirane,
Vlore); each comprises several districts, totalling 36, which are self-governing units which can issue by-laws, regulations and decisions with sub-law
regulatory power. There are 61 municipalities in the country.
16 Introduction
26.
The legal system of Albania is based on civil law. The hierarchy
of law consists of the Constitution, international agreements ratified by
the Albanian Parliament, laws, and sub legal acts (government decisions,
instructions issued by ministers, etc.). International agreements (including
agreements for exchange of information for tax purposes) which settle matters regulated by law require ratification by the Parliament. Where a ratified
international treaty conflicts with domestic law, the ratified treaty prevails
over domestic law (art.122 Constitution of Albania). A list of relevant legislation and regulations is set out in Annex3.
27.
The Albanian court system consists of a Supreme Court, which is
the highest judicial authority in the Republic of Albania. The Supreme Court
comprises 19judges and is organised into three chambers: civil, administrative and criminal. There are also 37courts, subdivided into General
Jurisdiction Courts which examine court cases in civil and criminal matters
(consist of 22courts of first instance and 6courts of appeal); Administrative
Courts (consist of 6court of first instance and one court of appeal) and
Serious Crimes Court (consist of one court of first instance and one court of
appeal).
The tax system

28.
Albania has a fully-fledged tax system comprising direct and indirect taxes, fees and duties. The tax system is governed by the Law on Tax
Procedures (LTP) and specific taxing acts and Cabinet Regulations issued
pursuant to these Acts. The LTP specifies the Albanian tax system, determines the types of taxes and regulates the tax procedure including rights of
taxpayers and the appeal procedures for decisions made regarding taxes and
fees. The tax system consists of national and local taxes.
29.
The National taxes include:

Income taxes (including corporate income tax and personal income

tax)
Value Added Tax
Excise duties (administered by customs department);
Customs duties;
Taxes on games of fortune and casinos;
Other national taxes and fees.
30.
Local taxes include:

Simplified income tax (tax on small business activities);
Introduction 17
Property tax;
Hotel tax, advertisement tax, environmental tax and other local fees.
31.
The Albanian collection and administration of taxes is responsibility of the General Taxation Department (GTD) and General Customs
Department, as well as local tax offices in municipalities. The personal
income tax rate is progressive with three brackets, with corresponding rates
of 0%, 13% and 23%. The corporate income tax in Albania is levied at a flat
rate of 15%. Companies are obliged to apply a withholding tax on payments
of dividends, interest and technical services, when such payments are made
to individuals or to non-resident persons. The withholding tax rate is 15%.
The standard VAT rate is 20%, with a 0% rate for medical products.
32.
Albania taxes its residents (companies and individuals) on their
worldwide income. All companies established under Albanian law and registered in Albania are considered residents in Albania. According to the LTP,
an individual is considered to be an Albanian tax resident if that person has
its permanent address or a usual residence (183-day rule) in Albania. A
foreign company having a permanent establishment in Albania is liable to tax
in Albania with respect to Albanian source income and worldwide income
attributable to that permanent establishment (art.8LTP). Non-resident
companies carrying on activity in Albania (not through a permanent establishment) and non-resident individuals working in Albania are subject to tax
only on their Albanian source income.
33.
Albania has a special tax regime for small business activities (SBEs).
SBEs are defined as companies with an annual turnover of LEK8million and
below. The current tax rates for SMEs are (i)a fixed amount of LEK25000/
year for companies with annual turnover of LEK2million and below; and
(ii)7.5% of taxable profits for annual turnover between LEK2 and 8million.
The Albanian government recently reviewed the tax regime for SBEs and
will revise the tax rates to: (i)0% of taxable profits for annual turnover of
LEK5million and below; and (ii)5% of taxable profits for annual turnover
between LEK5 and 8million. The change will take effect from year of assessment 2016.
Exchange of information for tax purposes

34.
Exchange of information for tax purposes is specifically regulated by
the Albanian law. The LTP provides general tax procedures for the GTD with
regard to access to information to be exchanged with other tax administrations. Albania has in place 40DTCs which cover its main trading partners.
Albania is a Party to the Multilateral Convention, which together with the
DTCs signed by Albania extends the exchange of information network up to a
18 Introduction
total of 102jurisdictions (see Annex2). The Multilateral Convention entered
into force for Albania on 1December 2013.
Overview of the financial sector and relevant professions

35.
The financial sector in Albania is composed of different activities
including banking, insurance and reinsurance activities; stock exchange
related activities and the administration of investment and pension funds. As
of January 2016 there were 16banks registered in Albania. The total value of
assets in the Albanian banking sector is LEK1373billion (EUR15.5billion)
as at 1January 2016.
36.
The Bank of Albania is the central bank of the country and the
appointed regulatory body of all financial entities. The Bank of Albania is
also the responsible authority for the monitoring and supervision of banks
and other financial institutions and nonbank financial entities such as savings and credit companies and their unions and foreign exchange bureaus
(arts.12 and 23 Law on the Bank of Albania). The regulation and supervision
of insurance, securities and voluntary pensions market as well as its operators
and related professions is under the responsibility of the Albanian Financial
Supervisory Authority which is an independent public institution.
37.
The Tirana Stock Exchange (TSE) is the only organised securities market in Albania. The TSE was established in 1996 with the object
to develop the Albanian securities market. Only government securities are
traded and there are no companies listed on it. In 2002, the TSE was restructured as a joint stock company with the Ministry of Finance as its exclusive
owner, and in 2007 it was licensed by the FSA to conduct stock exchange
transactions in Albania. As there are no companies listed on the TSE, consequently there are no recorded transactions and the TSE has not been a
functioning exchange.
38.
Relevant professions such as lawyers, accountants, auditors and notaries are regulated by law: lawyers are regulated by the Law on the profession
of lawyers; the licensing and supervisory procedures are administered by the
Bar Association Chamber and the Ministry of Justice. Notaries are regulated
by the Law on Notaries; licensing and supervisory procedures are administered by the Chamber of Notaries and the Ministry of Justice. Accountants
are regulated by the Law on legal auditing, organisation of the profession of
registered accounting experts and approved accountant; the licensing and
supervisory body of accountants is the Certifying Authority of Accounting
Experts.
39.
Anti-Money Laundering/Combating Financing of Terrorism (AML/
CFT) in Albania is primarily regulated by the Prevention of Money Laundering
and Terrorism Financing Law (AML/CFT Law) and the related sublegal
Introduction 19
acts. Regulation of AML issues is under the overall control of the General
Directorate for Prevention of Money Laundering (GDPML), a dependency of
the Ministry of Finance. The GDPML is the Financial Intelligence Unit. Its
mission is the fight against and prevention of money laundering and terrorism financing through the collection, verification, evaluation, control, and
dissemination of information to law enforcement agencies; safeguarding of
the information obtained from obliged entities; and overseeing the suspension
and freezing of transactions aimed at preventing the transfer, conversion or
change of ownership of the property and products generated from criminal
activities.
Recent developments
40.
In May 2015, Albanias Ministry the Finance enacted Instruction no.
15 for determining the procedures to gather information from all persons in
accordance with the provision of international tax treaties. The Instruction
provides for the relevant rules for application of Article61/1 of the LTP.
41.
Albania is currently negotiating tax treaties with Kazakhstan and
Israel.
Compliance with the Standards: Availability of information 21
Compliance with the Standards
A. Availability of information
Overview
42.
Effective exchange of information (EOI) requires the availability
of reliable information. In particular, it requires information on the identity
of owners and other stakeholders as well as information on the transactions
carried out by entities and other organisational structures. Such information
may be kept for tax, regulatory, commercial or other reasons. If such information is not kept or the information is not maintained for a reasonable period
of time, a jurisdictions competent authority3 may not be able to obtain and
provide it when requested. This section of the report describes and assesses
Albanias legal and regulatory framework for availability of information, and
its implementation in practice.
43.
The Albanian legal and regulatory framework ensures that ownership
information regarding relevant entities is generally available in Albania in
line with the international standard, whether in the hands of the Registry or
the entities themselves. There are several mechanisms under Albanian legislation ensuring that shareholders identity information is available. The Law
on Entrepreneurs and Companies and the Law on the National Registration
Centre (NRC) require limited liabilities companies to provide shareholders
3.
The term competent authority means the person or government authority designated by a jurisdiction as being competent to exchange information pursuant
to a double tax convention or tax information exchange.
22 Compliance with the Standards: Availability of information

information to the NRC at the time of registration and all subsequent changes.
Joint stock companies must keep a share registry in which the ownership of
all shares is recorded. Nevertheless, these requirements might not be sufficient to identify the holders of any bearer shares that could have been issued
by joint stock companies prior 2008, when the Albanian legislation allowed
the issuance of this type of shares. It is noted that the current Albanian legal
framework does not contain provisions for the issuance of bearer shares. In
relation to bearer shares that might have been issued prior 2008, the current legislation does not provide for a clear mechanism to abolish them or
to convert them into nominative shares. Foreign companies are obliged to
register with the NRC; nevertheless, availability of ownership information
is conditioned to certain circumstances as whether ownership information
is contained in the by-laws or act of incorporations or if such information is
relevant in ascertaining certain taxpayers tax liabilities. Foreign partnerships
which carry on business in Albania or have income, deductions or credits for
tax purposes in Albania are neither required to maintain nor provide to the
authorities information on the identity of their partners in all cases. Albania
is recommended to correct the deficiencies identified. Therefore, elementA.1
was found in place, but certain aspects of the legal implementation of the element need improvement.
44.
Albanian authorities clarified that although bearer shares could have
been issued by joint stock companies prior to 2008; in practice, they have
no records of the existence of such bearer shares. The Albanian competent
authority confirmed that they have never received any EOI requests on bearer
shares or on companies that had issued such shares either. Albanian authorities further explained that the concept of bearer shares did not exist before
1992 because Albania was a centrally-planned economy with no private companies, i.e.all companies were state-owned. Albanias commercial laws were
only introduced post-1991 during the transition period into a market-based
economy, and that legislation drafted during this period may have included
certain concepts such as bearer shares, which were based on the legal system
of other market-based economies. Since 2008, the Albanian laws require joint
stock companies to maintain a share registry in which the ownership of all
shares is recorded. Therefore, the issue of bearer shares does not seem to be
a material one at the present stage.
45.
Nominee ownership is restricted to obligated persons under AML
rules such as financial institutions, stock exchange, brokers, attorneys and
other legal representatives, which require identification of a person on whose
behalf a nominee is acting.
46.
Albanian law does not recognise the concept of trust and Albania
has not signed the Hague Convention of 1July 1985 on the Law Applicable
to Trusts and on their Recognition. However, there are no restrictions in
Albanian domestic law that prevent a resident of Albania from acting as

a trustee, protector or administrator of a trust formed under foreign law.
Albanian AML legislation ensures that information is available regarding
the trustees, settlor and beneficiaries of a foreign trust administered by an
Albanian trustee. Further, any person providing trustee services by way of
business is expressly covered by the AML/CFT Law and is subject to AML
obligations which include identification of the trustees, settlor and beneficiaries of a trust.
47.
Foundations in Albania are non-profit entities established exclusively
for public-interest purposes. Information on the founders, members of the
executive board (or any other person with the authority to represent the foundation) must be provided to the Court of Tirana upon registration and kept
up to date. Such information is required to be kept by the foundation for all
the time it remains registered. In addition, members of the executive board
who act in a professional capacity are subject to AML rules to identify their
clients.
48.
Enforcement provisions for entities regulated by the Bank of Albania
and General Directorate for Prevention of Money Laundering are generally
in place. However the effectiveness of enforcement provisions in respect of
all the relevant obligations to maintain ownership and identity information
for relevant entities and arrangements is not clear. It is found that there are
serious gaps in the supervisory and enforcement roles of the NRC and CRS
because both agencies were not able to provide basic data on the supervisory
and enforcement measures carried out during the review period to illustrate
that the enforcement measures for various corporate entities were effective.
It is recommended that Albanian authorities (specifically the NRC and the
CRS) strengthen their internal framework to monitor the various entities
compliance to register and update ownership information.
49.
All relevant entities as well as foreign entities performing economic activities in Albania are required under the accounting law to keep
accounting records. The requirements under the accounting law are supplemented by obligations imposed by the tax law and under AML regulations.
Under Article19 of Law No.8438 on Income Tax, all taxpayers subject
to corporate income tax are obliged to keep accounting records according to the Albanian National Accounting Standards and IFRS. Sanctions
will be imposed on companies that fail to meet this obligation (Art 118 of
Tax Procedures Law). Availability of underlying documentation is ensured
by accounting and tax requirements. Accounting records and underlying
documentation must be kept in Albania for at least five years. In practice,
compliance with accounting obligations under accounting and tax law is
supervised by the GTD. The GTD checks compliance with accounting obligations during the course of tax audits, which adopt a risk based approach.

However, the adequacy of the GTDs oversight system could not be fully
ascertained, as relevant statistical information such as the compliance with
filing requirements, sanctions applied to non-filers and percentage of taxpayers subject to audit was not available. Albania is recommended to enhance
its system of oversight to ensure that accounting information is being maintained by all relevant entities.
50.
In respect of banks and other financial institutions, Albanian AML
and accounting legislation impose appropriate obligations to ensure that all
records pertaining to customers accounts as well as related financial and
transactional information are available. Banks are expressly prohibited from
establishing business relationships with or carrying out transactions for
anonymous customers. The Bank of Albania and the General Directorate for
Prevention of Money Laundering conduct regular audits on banks and other
financial institutions ensuring that banking information is available.
51.
Albania was not able to provide a breakdown in the statistics on
the number of EOI requests received on ownership, accounting and banking information. Peer input indicated that information has been requested
concerning ownership of legal entities, accounting records and underlying
documentation and information concerning the income and address of individuals. Given that peers are satisfied with the EOI assistance provided by
Albania, it can be inferred that information was available when requested.
A.1. Ownership and identity information

Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.
Companies (ToR4 A.1.1)

Types of companies
52.
The Law on Entrepreneurs and Companies is the central piece of legislation governing the establishment of and further arrangements with respect
to companies. Under the Law on Entrepreneurs and Companies, the following
types of companies may be incorporated:

4.
limited liability companies (LLCs) are separate legal entities with

equity capital made up of contributions paid by their owners. LLCs
may be founded by one or several founders who can be natural or
legal persons. Founders are liable for the obligations of the company
Terms of Reference to Monitor and Review Progress towards Transparency and

Exchange of Information.
only up to the amount of their unpaid contribution to the companys

capital. The minimum amount of equity capital of LLC is LEK100
(EUR0.72) (arts.68 and 70 Law on Entrepreneurs and Companies).
As at January 2016 there were 34910LLCs in Albania.

joint stock companies are companies which equity capital is

divided into shares/stocks and subscribed by founders. Shareholders
may be natural or legal persons, which are not liable for the obligations of the company and which personally bear losses only to the
extent of any unpaid parts of the shares in the equity capital they
subscribed. Joint stock companies could be companies with public or
with private offer. The minimum amount of equity capital of a stock
company without public offer is LEK3.5million (EUR25055.48)
and LEK10million (EUR71587.09) for stock company with public
offering (arts.105 and 107 Law on Entrepreneurs and Companies).
As at January 2016 there were 1279 Joint stock companies registered
in Albania.
53.
In addition, savings and credit companies (SCC) and their unions,
as well as mutual aid and cooperation companies may be established in
Albania. SCCs are regulated by the Law on SCC. These types of legal entities
are licensed and supervised by the Bank of Albania, as non-financial banking
institutions. SCCs conduct their activity in the villages and their purpose is
to promote the economic benefit to their members. As at January 2016 there
were 126SCC and two unions operating in Albania.
54.
A company obtains legal personality from the moment it is registered
with the National Registration Centre (NRC) (art.42, Law on the NRC and
art.3(4), Law on Entrepreneurs and Companies). In order to set up a company the founders must prepare the company statute, including the act of
incorporation and by-laws and submit an application to the respective office
of the NRC (art.6, Law on Entrepreneurs and Companies; arts.32 to 36 and
Paragraph4 of art.28 Law on the NRC).
Information kept by public authorities

Commercial Register
55.
Registration of companies is regulated by the Law on the National
Registration Centre (NRC). The Law on the NRC regulates the organisation,
functioning and operations of the NRC, the maintenance of the Commercial
Register and the subjects and procedures for registration.
56.
The NRC is a central public institution, with legal personality, subordinated to the Ministry of Trade. The NRC carries out functions of a business
register for all types of entities required to be registered by law and keeps the

Commercial Register, with data of each registered person. The Commercial
Register includes: individuals exercising commercial economic activities,
partnerships, commercial companies, branches and representation offices of
foreign companies, savings and credit companies and unions, cooperation
companies (e.g.agricultural cooperatives) and any other entity subject to
registration in accordance with the Albanian law (art.22 Law on the NRC).
57.
Companies shall apply for registration within 30days after the date
of its incorporation. The application for registration may be performed electronically at any service window of the NRC (arts.20 and 22 paragraph2 Law
on the NRC). The application for the initial registration of a limited-liability
company has to be submitted by the administrators, founders or any authorised person; and for a joint stock company by the members of the board of
directors or any authorised person. The registration of transactions concerning shares can be submitted by a member or shareholder participating in the
transaction or any person authorised by them (arts.26 and 44 paragraph b
Law on the NRC).
58.
LLCs should register with the NRC by filing the application form for
initial registration, submitting the identification documents of the members
and the responsible persons for the administration (name, surname, gender,
date of birth, birthplace, citizenship and identification document) and by
signing the relevant declaration for the acknowledgement, acceptance and
application of the legal provisions in force concerning the organisation and
functioning of the type of company being registered. In such case, the application form and the above mentioned declaration, signed by the members
or by the authorised persons to act on their name and behalf, substitutes the
incorporation act and the by-laws of the company (art.28 paragraph4 Law on
the NRC). In addition, the following must be provided:

the value of the initial share capital subscribed,
number of shares,
nominal value of each share,
participation in the share capital, and
the kind and value of the contributions of each shareholder and also
whether the initial subscripted share capital is paid, shall be also provided (art.35, Law on the NRC).
59.
LLCs are obliged to deposit with the NRC any change in ownership
and other information provided during registration process within 30days
from the date of its occurrence (art.22 and 43 Law on the NRC). As mentioned above, the registration of the transfer of shares can be submitted by
the administrator, member, shareholder participating in the transaction or
any person authorised by them (arts.26 Law on the NRC). However, the
managing director of the company shall be liable to the company for registering the change of ownership with NRC (arts.95 paragraph6 and 98 Law on
Entrepreneurs and Companies).
60.
Regarding SCCs and their unions and companies for mutual aid and
cooperation, identity information of the members, the supervisory board and
of the certified public accountant must be entered in the NRC in the same
way as for LLCs (arts.38 and 39 Law on the NRC).
61.
For the initial registration, joint stock companies (with or without
public offer) register with the NRC by filing the application form for initial
registration, the by-laws and incorporation act (art.32 Law on the NRC).
Additional documents required upon registration include:

the value of the initial capital subscribed, and the portion paid thereof;
the number and type of the subscribed shares;
the nominal value of each share and the rights attaching to the shares
of each class, where there are several classes of shares;
number of subscribed shares by each shareholder;
value and type of contribution of each shareholder, and portion paid

by them;
special conditions if any limiting the transfer of shares and the rights
attaching to the shares of each class, where there are several classes
of shares;
procedures relating to the conversion of type of share, if provided in

the by-laws;
identification information of the Supervisory Board members and

certified accountants, as well as the term of their office (art.35, Law
on the NRC).
62.
Joint stock companies with public offer must also file before the
initial registration the identification information of the incorporators and
the date of the deposit of the proposed by-laws and following notifications
in accordance with the relevant law provisions (art.35(2) Law on the NRC).
63.
Joint stock companies are not obliged to notify the NRC of each
transfer of shares. Nevertheless, these companies must provide annually an
updated list of registered shareholders with regard to nominative shares, and
the total number of shares (art.43 paragraph4, Law on the NRC and Decision
of The Council Of Ministers no. 506 on the Registration Procedures and
Publication in the NRC). If a person acquires or sells shares of a joint stock
company, and if, as a consequence, its proportion of votes in the General

Meeting exceeds or falls below the following thresholds: 3%, 5%, 10%, 15%,
20%, 25%, 30%, 50% or 75%, that person shall notify the NRC in writing
of that acquisition or sale within 15days (art.206 Law on Entrepreneurs and
Companies).
64.
The NRC, after performing the necessary verifications (such as
verifying that the person signing the application is authorised to do so, that
all information have been filled, whether the chosen name can be registered,
etc.) and ascertaining the fulfilment of conditions for registration, is entitled
to perform the registration and issue the registration certificate within the
mandatory term of one day from the presentation of the application (arts.54
and 55 paragraph2, Law on the NRC). Upon registration, subjects are given
an identification number, which is electronically generated by the NRC, and
is unique for each of the registered subject (art.60 paragraph2 Law on the
NRC). The registration information for all companies, including electronic
scans of the accompanying documents is freely accessible for the public
through the NRC official website (arts.61 and 66 paragraph1 Law on the
NRC). The NRC performs the publication of the commercial registers data
in the official gazette within one day from the date of application.
In practice
65.
Individuals and legal entities can carry out commercial activities in
Albania only after registering with the NRC. Albanian authorities explained
that no entity will be able to carry out commercial activities such as opening
a bank account or issuing invoices5 without first registering with the NRC.
Entities registered with the NRC will receive a unique identification number,
which is electronically generated and will serve as their tax identification
number for national and local taxes. The NRC serves as a one-stop shop
for entities setting up a new business because registration with NRC will lead
to the information being automatically transmitted to the tax administration,
and other government agencies like the Work Inspectorate for social and
health insurance schemes.
66.
The NRC has approximately 50employees. All applications and
actions related to business registration are processed by the registration unit
located at the NRC headquarters in Tirana. The NRC also operates 33 local
desks where businesses can requests services and file for information. The
NRC has completed the transition of all business information data from district courts to an electronic central commercial register. The NRC considers
that the creation of the centralised electronic system has significantly contributed to increase transparency concerning Albanias businesses and companies.
5.
The entity will not be able to issue invoices because all invoices have to be purchased at the GTD.
67.
The following three categories of sanctions that NRC can impose are
provided in article74 of the law on NRC: (i)false declaration of data to the
NRC constitutes an administrative contravention (as opposed to a criminal act)
and is punishable by fine of LEK15000; (ii)failure to register a commercial
entity constitutes an administrative contravention and is punishable by fine of
LEK15000; (iii)failure to notify the NRC when a registered entity becomes
inactive is punishable by fine of LEK15000. However, the NRC was unable
to provide more details and statistics on whether the above sanctions have been
imposed during the review period. Given the limited information provided by
Albania, it is not apparent that specific efforts have been adopted by the NRC
to monitor compliance with the registration obligation. In addition, it is also
not clear whether the NRC tracks the entities which did not file their annual
returns or what remedial actions have been taken to ensure that updated ownership information is maintained with the entities and filed with the NRC. The
NRC does not conduct on-site inspections on entities to verify compliance with
the obligations to maintain ownership information. Albania is recommended
to improve its system of oversight in order to ensure that updated ownership
information is being maintained in respect of all relevant entities.
Centre of Registration of Shares

68.
The CRS was established in 1996 under the purview of the Ministry
of Economy. Law No.9879 of 21February 2008 (the Law on Securities) sets
out the functions of the CRS. The CRS is the government agency which is
required to maintain a register of shares for JSCs. Article6 of the Law on
Securities (LOS) provides for all securities to be registered with the CRS.
JSCs have to file information on their shareholders with the CRS and inform
the CRS whenever there is a transfer of shares. Article13 of LOS provides
for the information which should be filed with the CRS, which includes the
type of shares, issuance date, name of shareholder, number of issued shares
and nominal value of issued shares. Article14 of the LOS imposes an obligation on the issuer to register the shares with the CRS. However, the CRS is
not given any legislative powers to impose penalties on JSCs which do not
register their shares with them. In practice, out of a total of 1279JSCs in
Albania, only 219JSCs are currently registered with the CRS. It is not clear
whether the 219JSCs which have registered with the CRS file timely updates
to the CRS whenever there is a transfer of shares. The CRS currently has
five officers. Albanian authorities explained that the CRS is not sufficiently
staffed to carry out audit exercises on the 219JSCs which have registered,
and there are no plans to take action on the rest of the JSCs that have not registered. Albanian authorities further explained that it would be in the interest
of shareholders of JSCs to ensure that any transfer of shares is registered
with the CRS as proof that they own the shares in JSC. After registering
with the CRS, the shares of a JCS cannot be bought or sold without the CRS

involvement. Nevertheless, Albania is recommended to improve its system
of oversight in order to ensure that updated ownership information is being
maintained in respect of all relevant entities.
Information provided to tax administration

69.
The LTP requires all companies carrying on business in Albania
to be registered with the NRC or the GTD. Registration with the NRC also
constitutes a simultaneous registration with the tax authorities (art.59 Law
on the NRC and art.40 LTP). Taxpayers are required to submit an annual
tax declaration to theGTD. The tax declaration does not contain shareholder
information but this information is available at the NRC database which contains on-line identity information regarding shareholders and this information
is publicly accessable (art.61 Law on the NRC).
Information held by companies

70.
Joint stock companies listed and non-listed are required to maintain a
register of shareholders. The registered shareholders are deemed shareholders
in respect of the company and third parties and shareholder rights cannot be
exercised until the person is entered in the companys share registry (arts.116
paragraph2 and 119 paragraph1 and 2 Law on Entrepreneurs and Companies).
The registry must contain identity information for each shareholder, including
the surnames, first names or legal denomination; the home addresses or head
office of the shareholder, the shares par value and the date of registration. The
managing director named in the statute is responsible for the companys share
register and shall provide access to the information held there to the shareholders and the public. The information shall be made available in the companys
website if the company has one (art.119 paragraph3 Law on Entrepreneurs
and Companies). There is no provision in the Albanian Law that limits the time
period for which the register of shareholders shall be stored.
71.
LLCs are required to register identity information regarding their
owners with the NRC, and they are obliged to update such information within
30days in case of any change. The managing director of a LLC is responsible
for submitting the company information to the NRC (arts.74 paragraph2 and
95 Law on Entrepreneurs and Companies; arts.22 paragraph3 and 43 Law
on the NRC).
Nominee identity information

72.
The administration of assets, shares and securities on behalf of third
parties by nominees is regulated by the AML/CFT Law. The AML/CFT Law
covers all professional and non-professionals nominees (art.3 paragraphk,
subparagraphs(i) and (viii) AML/CFT Law). Persons providing nominee

services are required to maintain records on the securities held and perform
customer due diligence (CDD) measures on their clients before establishing
a business relationship, including maintaining information on the identity of
their customers. This includes, using an AML-risk based approach, identifying the beneficial owner of the customer where the customer is a legal entity
(art.4/1). The beneficial owner is defined as a natural person having real or
legal direct or indirect control of an entity or holding, alone or together with
other persons, voting rights or financial interest in that legal person of at least
25% (art.2 paragraph12). The nominee is further required to keep information for five years following the termination of the business relationship
(art.16 paragraph1).
73.
Based on Article8 paragraph6 of the above AML/CFT Law,
enhanced due diligence should be exercised by entities entering into business
relationships and transactions with customers such as trusts and companies
with nominee shareholders. The enhanced due diligence is a deeper control
process, beyond the know your customer procedures. In order to implement
the enhanced due diligence, the entities should require the physical presence
of customers and their representatives prior to establishing a business relationship with them and prior to executing transactions on their behalf (art.7
paragraph2 AML/CFT Law). This ensures that beneficial ownership in
respect of companies held by nominees is required to be available in Albania.
In practice
74.
Reporting entities under the Albanian AML/CFT Law include
various non-financial businesses and professions. The GDPML identified
the group below as the professionals that are involved among other activities
in the administrations of tangible or intangible assets, including shares. The
GDPML is vested with supervisory powers and the group of professionals as
listed below are subject of on-going supervision that combines both on-site
as well as off-site examinations. The GDPML has confirmed that there was
no case reported that the group of professionals listed below were holding
shares as nominees.
Reporting entity
Number of entities
Notaries
408
Accountants
267
Lawyers
3621
Realtors
138
Foreign companies
75.
Pursuant to Article8 of the LTP and Article3 paragraph3 of the Law
on Income Tax, a company incorporated under foreign law but with a head
office or headquarters and the place of effective management of business in
Albania will be treated as a resident for tax purposes. Similar to domestic
companies, all foreign companies that are considered tax resident for tax
purposes must register with the NRC before starting their commercial activities and then will be required to file a tax return and will be subject to profit
tax on its worldwide income (art.40 LTP and art.16(b) Law on Income Tax).
Moreover, foreign companies or other legal entities established under laws
of another jurisdiction can conduct commercial activities in Albania through
branches or representative offices and must also register with the NRC and
the tax authorities. Albania does not keep statistics on the number of foreign
companies managed and controlled in Albania, but statistics are available
in relation to branches (407 as at May 2015) and representatives of foreign
companies (95 as at May 2015).
76.
Whilst companies formed outside of Albania are not required to
provide ownership information on registration when setting up any kind of
activity in Albania, the application for registration must be accompanied by
the statutes, acts of incorporation or equivalent documents according to the
foreign law (arts.28 Law on Law on the NRC); availability of ownership
information would then depend on the law of the jurisdiction where the company was incorporated, whether its incorporation act and by-laws contain
ownership information.
77.
There are a number of provisions in the Law on Income Tax under
which ownership information is relevant in ascertaining a taxpayers tax
liabilities, and therefore would require that the company maintain this information. In particular, shareholding information will have to be maintained in
order to comply with the tax obligations set out under: (i)Article27 which
defines the rule to be applied to carry over losses against the profits of consecutives coming years, provided that there is no change of direct or indirect
ownership or voting power of more than 50%; (ii)Article36 which defines
the transfer pricing rules between companies and interrelated companies and
defines related parties in term of direct or indirect control including 50%
of the voting powers and (iii)companies, including foreign companies that
are resident for tax purposes in Albania, must apply a withholding tax on
payments of dividends, when such payments are done to individuals or to
non-resident persons (arts.26 and 33 Law on Income Tax). According to these
provisions those companies would require maintaining ownership information in order to meet their tax obligation under the Income Tax Law. Further,
the GTD is able to require the production of ownership information at any
time in relation to the administration and enforcement of the companys tax
obligations (art.60 LTP) (see section B. 1). Moreover, if a person subject

to Albanian AML law is engaged by a foreign company (e.g.if the foreign
company opens a bank account with an Albanian bank), this person would
be required to conduct customer due diligence and identify the owners of
the company (more details on the AML obligations are included later in this
section).
78.
Although the obligations provided by tax law to maintain ownership information (e.g.transfer pricing obligations, utilisation of tax losses)
will ensure that such information will be available in certain cases, they do
not ensure that ownership information is available in relation to all foreign
companies that have a sufficient nexus to Albania (e.g.by being resident
there for tax purposes by reason of having its place of effective management
or administration in Albania). Therefore, Albania should ensure that ownership information regarding to foreign companies having a sufficient nexus to
Albania is available in all cases.
In practice
79.
The GTD acknowledged that foreign companies that are tax residents in Albania would only be under the obligation provided by tax law to
maintain ownership information under certain circumstances such as when
they are subject transfer pricing obligations or wish to utilise tax losses. It is
recommended that Albania should ensure the availability of ownership information of foreign companies with sufficient nexus to Albania in all cases.
Information held by service providers

80.
The Anti-Money Laundering/Combating Financing of Terrorism
(AML/CFT) Law requires the identification of customers and beneficial
owners of customers through the imposition of customer due diligence (CDD).
The obliged person under the AML/CFT Law includes, amongst others, persons providing companies services, such as:

attorneys, public notaries and other legal representatives, authorised

independent accountants, financial consulting offices and regulated
professions that offer financial consulting services when they prepare
or carry out transactions for their customers in activities such as:
-
transfer of immovable properties, administration of money, securities and other assets;
administration of shares of capital to be used for the foundation,

functioning or administration of commercial companies;
foundation, functioning or administration of legal persons and/

or legal arrangement;
legal agreements, sale of securities or shares of joint stock companies and the transfer of commercial activities;
any other natural or legal person engaged in:

-
the administration of third parties assets;
foundation, registration, administration, functioning of the legal

arrangement or legal persons and safekeeping and administration
of cash or liquid securities in the name of other
safekeeping and administration of cash or liquid securities in the

name of other persons; (art.3 AML/CFT Law).
81.
The circumstances in which customer due diligence is required and
the measures to be conducted are set out in Article4 and 4/1 of the AML/
CFT Law, which comprises amongst other, prior to the establishment of a
business relationship, the following:

the identification of all customers (permanent or occasional, natural

person, legal entity or trust) including the identity of the beneficial
owner through documents, data or information received from reliable
and independent sources
determine for all customers, if they are acting on behalf of another

person and take reasonable measures to obtain adequate data for the
identification of that person;
obtain information about the purpose and nature of the business relationship and to establish the risk profile during the ongoing monitoring.
82.
The beneficial owner is defined as a natural person who owns or, is
the last to control a customer and/or the person on whose behalf is executed
the transaction. This also includes those persons exercising the last effective control on a legal person, by means of direct or indirect ownership of
at least 25% of shares or votes of a legal entity; the participation in at least
25% of votes of a legal person, based on an agreement with the other partners
or shareholders; defines de facto the decisions made by the legal person or
control by all means the selection, appointment or dismissal of the majority
of administrators of the legal person (art.2 AML/CFT Law).
83.
The obliged person is required to conduct continuous monitoring of
the business relationship with the customer, including the analysis of transactions executed in the course of duration of this relationship, to ensure that
they are consistent with the knowledge of the subject about the customer,
nature of his/her business, risk profile and source of funds and to ensure,
through the examination of customers files, that documents, data and information obtained during the process of due diligence are updated, relevant and
appropriate (art.4/1 paragraph(e) and (f) AML/CFT Law). This documentation must be stored for at least for five years following the end of the business
relationship.
In practice
84.
In practice, the GDPML has powers to supervise compliance by the
service providers with respect to their reporting obligations through onsite/
offsite inspections either on its own or in collaboration with other supervisory authorities such as the Central Bank of Albania (CBOA). This process is
based on the analysis of risk of the categories of subjects, so that the focus of
supervision is aimed at sectors with higher exposure to money laundering or
financing of terrorism. Such an approach has led to further consolidation of
the whole system and has increased the preventive capabilities of the reporting entities. The inspection process is preceded by a planning stage through
which it is intended to identify the deficiencies and then to define concrete
recommendations for the corrective measures to be taken by the reporting
entities, in order to ensure enhancement of the level of compliance. The table
below provides details of the inspections carried out over the review period.
Year 2012
Subjects inspected
Year 2013
Year 2014
Year 2015
On-site Off-site On-site Off-site On-site Off-site On-site Off-site
Banks
Non-bank financial institutions
24
Notaries
54
19
67
13
Certified accountants
45
27
16
Real estate agents
Lawyers
Administration of securities
85.
In the course of supervision of the obliged entities in cases of
infringements of the provisions of the AML/CFT Law GDPML has applied
sanctions that are represented in the following table.

Year 2012
Subjects
Year 2013
Year 2014
Year 2015
Total sanctions
Total sanctions
Total sanctions
Total sanctions
collected
collected
collected
collected
In LEK
In LEK
In LEK
In LEK
Cases
Cases
Cases
Cases
Banks
4000000
8500000
4430000
6000000
Exchange offices
10300000
5700000
4300000
6800000
Notary public
600000
1700000
29
9700000
2700000
Non-bank financial
institutions
2500000
800000
2200000
Construction companies
6900000
11
6800000
15
14700000
Certified accountants
300000
Insurance companies
2000000
Ownership information held by other persons

86.
The Bank of Albania which is the Central Bank of Albania and
the responsible body for licensing and supervising of the banking sector, is
required to have ownership information of second levels banks at the time
of registration. The information should also be published in banks annual
reports, aiming to enhance transparency across the banking sector (arts.12
to 23 Law on Bank of Albania)
87.
Pursuant to the Law on Financial Supervisory Authority, the Albanian
Financial Supervisory Authority (AFSA), has the power to request and hold
information on the ownership structure (information on ownership structure
means information on every shareholder of the entities, information on their
identity and how many shares their own) of the non-banking financial entities,
during the licensing process and throughout the pursuit of their business activity. The AFSA shall keep the relevant registers of the licensing subjects and
in accordance as well to Regulation no. 17, dated 21March 2007 on Holding
and preserving of records of entities licensed, authorised and approved by the
Financial Supervisory Authority.
Conclusion
88.
The Albanian legal and regulatory framework ensures that ownership
information regarding domestic companies is available. LLCs are required to
provide information on their founders upon registration with the NRC and
report any changes in shareholders subsequently. Joint stock companies are
required to keep and maintain an up to date register of shareholders which
must be provided to the NRC annually. Furthermore, transfers of shares
exceeding certain thresholds must be notified to the NRC within 15days.
However, it is not apparent that NRC has in place monitoring and enforcement measures to ensure that information filed is up to date. Furthermore, it
is noted that although all JSCs are required to maintain their share register
with the CRS, only 17% of them have done so, which is a very low compliance rate. Albania is recommended to improve its system of oversight in
order to ensure that updated ownership information is being maintained in
respect of all relevant entities. Nominee ownership is available to professionals and non-professionals covered by AML obligations when acting as
a nominee.
89.
Whilst companies formed outside of Albania are not required to
provide ownership information on registration when setting up any kind of
activity in Albania, the application for registration must be accompanied by
the statutes, acts of incorporation or equivalent documents according to the
foreign law; availability of ownership information would then depend on
the law of the jurisdiction where the company was incorporated whether its
incorporation act and by-laws contain ownership information. The obligations provided by tax law to maintain ownership information (e.g.transfer
pricing obligations, utilisation of tax losses) will ensure that such information
will be available in certain cases. Albania AML obligated person could be
engaged by a foreign company and will, therefore, conduct CDD with respect
to the company. However, these obligations do not ensure the availability of
ownership information with respect to foreign companies with a sufficient
nexus to Albania in all cases. Therefore, Albania is recommended to ensure
that ownership information on foreign companies with sufficient nexus with
Albania, in particular, being resident in Albania for tax purposes by reason of
having their place of effective management or administration there, is available in all cases.
90.
Albania was not able to provide information on the number of EOI
requests received during the review period which was related to ownership
information for companies. Nevertheless, one peer has indicated that such
information was available and provided by Albania in the instances where it
was requested.
Bearer shares (ToRA.1.2)

91.
The current legal framework in Albania does not contain provisions for the issuance of bearer shares and there are several mechanisms
under Albanian legislation ensuring that shareholders identity information
is available. The Law on Entrepreneurs and Companies and the Law on the
National Registration Centre provide that joint stock companies must keep a
share registry in which the ownership of all shares is recorded. As a result of
these provisions, it can be concluded that joint stock companies are required
to issue only nominative shares since May 2008.

92.
Nevertheless, these requirements might not be sufficient in the case
of shares that were issued prior 2008, when Albanian legislation allowed
joint stock companies to issue bearer shares. Law on Companies from
1992 expressly provided for the issuance of shares in bearer form. Law
on Entrepreneurs and Companies of 2008 which has superseded Law on
Companies from 1992 neither contains a provision on the abolition of bearer
shares nor a requirement for the conversion of bearer shares issued prior
2008 into nominative shares. Moreover, the Law on the NRC provides for a
reporting obligation applicable to nominative shares; in a way that it is not
clear whether non-nominative shares could still exist in Albania. The number
of joint stock companies incorporated prior to 2008 is 1081. However, it is
currently not known how many of these companies have issued bearer shares
in accordance with the 1992 law and if these bearer shares are still in circulation in Albania.
93.
Notwithstanding the above, in order to comply with a number of
obligations imposed on companies to keep and report ownership information, including changes of ownership, Albanian companies would need to
know who their shareholders are at all times. In that way, the likelihood of an
Albanian company, that has issued bearer shares and is still able to meet its
legal obligations is reduced.
94.
Limited liability companies must keep, declare and register with
the NRC shareholders information, including all subsequent changes in the
ownership of a company. Joint stock companies must keep a share registry in
which the ownership information of all shares is recorded. The share registry
must include the surnames, first names or legal denomination of the holder
of each companys share; their home addresses or head office, the shares
par value, and the date of registration (art.119 Law on Entrepreneurs and
Companies). Joint stock companies must provide to the NRC an updated list
of registered shareholders with regard to nominative shares, and the total
number of shares (art.43 Law on the NRC). In addition, and as mentioned
under sectionA.1.1, in the case of transfer or shares of a joint stock company,
the person who acquires or sells shares must notify the NRC in writing of
that acquisition or sale within 15days (art.206 Law on Entrepreneurs and
Companies) if his/her proportion of votes in the General Meeting exceeds or
falls below the following thresholds: 3%, 5%, 10%, 15% 20% 25%, 30%, 50%
or 75% (art.206 Law on Entrepreneurs and Companies).
95.
Additional reporting obligations are provided in the Law on
Securities for listed joint stock companies (art.15). In this regard, issuers
of shares and the registry shall notify the authority of any transfer of voting
shares, immediately or cumulatively over a period no longer than 12months,
equivalent of at least 5 % of the authorised capital of the joint stock company.
Issuers of shares shall also inform the Authority about persons related to the
new shareholding, including those controlling at least 20% of voting shares

and companies controlling or under control of the new shareholder. At the
present, there are no companies listed in the Albanian Stock Exchange.
96.
Finally, financial institutions and certain non-financial businesses
and professions are subject to the obligations in the AML/CFT Law, and
must, therefore, identify customers, including those who sell securities or
shares from joint stock companies (art.3 paragraph gh). Further, as described
in sectionA.2 all joint stock companies are obliged to have their financial
statements audited prior their publication by statutory auditors or audit firms
(art.41 of the Law on Statutory Audit). Audit firms and statutory auditors are
covered by AML/CFT Law; therefore they must conduct CDD.
97.
Notwithstanding the above mentioned requirements for the identification of owners of companies, it is not clear how these requirements would
apply for companies that might have issued bearer shares under the 1992 Law
on Companies. Albania is recommended to ensure that appropriate mechanisms are in place to identify holders of bearer shares issued under the 1992
Law on Companies.
In practice
98.
Albanian authorities clarified that although there seemed to be
possible bearer shares issued by joint stock companies prior to 2008; in
practice they have no records of the existence of such bearer shares. The
Albanian competent authority confirmed that they have never received any
EOI requests on bearer shares companies that had issued such shares either.
Albanian authorities further explained that the concept of bearer shares did
not exist before 1992 because Albania was a centrally-planned economy with
no private companies, i.e.all companies were state-owned. Albanias commercial laws were only introduced post-1991 during the transition period into
a market-based economy, and that legislation drafted during this period may
have included certain concepts such as bearer shares, which were based on
the legal system of other market-based economies. Since 2008, the Albanian
laws require joint stock companies to maintain a share registry in which the
ownership of all shares is recorded. The Albanian authorities reported
having identified no issue had arisen regarding bearer shares in practice, and
it is their opinion that the issue of bearer shares does not seem to be a material one in Albania.
Privatisation vouchers
99.
Privatisation bonds or vouchers were introduced by the Albanian
government in the context of the process of privatisation of public owned companies. The mechanism for privatisation was set by Law 7918 of 13April 1995

on the privatisation of state assets. This law allowed Albanian citizens over
18years old to participate in the shares and assets of the state owned companies
through the use of privatisation vouchers distributed by the Albanian government. The Albanian authorities reported that those vouchers were distributed
among former employees of the companies being privatised. The privatisation
vouchers can serve three purposes to the holder (i)to join as a shareholder a
commercial state-owned company undergoing a privatisation process; (ii)to
purchase certain property of state-owned enterprises being privatised; and/or
(iii)to join securities in investment companies. The vouchers were issued in
non-nominative form by savings banks, which are also in charged for registration and distribution of vouchers. These instruments were and still are allowed
to be traded among resident and non-resident individuals, domestic and foreign
legal entities, prior to be traded for shares or assets in a state owned company (art.5). The number of state owned companies that have been or will go
through privatisation process is 97 (seven of which are currently going through
liquidation and 10 which are currently being privatised).The holder of the
voucher can still participate in the assets or share of any state-owned company
to be privatised. The Albanian authorities reported that a total of LEK74.9billion (EUR0.5billion) in privatisation vouchers, of which and LEK51.2billion
(EUR0.4billion) were distributed to the public. To date, Albania reports that
LEK10billion (EUR71.6million) of these were used in the privatisation process, while LEK41billion (EUR0.3billion) in vouchers remain scattered and
unused. Undistributed vouchers and the dematerialised vouchers after being
used for the purpose that the law allows are deposited in the Bank of Albania.
The vouchers can be only used until 31December 2016 (art.3) and after this
date no rights can be exercised by the holders.
In practice
100. Albanian authorities report that the deadline for privatisation vouchers to be exercised by holders remains at 31December 2016. As the process
for phasing out the privatisation vouchers is still on-going, it is recommended
that Albania monitor this process to ensure that full ownership information
is available for all companies.
Partnerships (ToRA.1.3)
101. Albanian Law on Entrepreneurs and Companies recognises two
types of partnerships:

general partnerships: a company is a general partnership if it conducts its business activities under a common business name and
the liability of partners towards creditors is unlimited. A general
partnership has two or more partners undertaking business activities
under a common business name based on a partnership agreement.

General partnerships have their own legal personality (distinct from
their partners/members). Partners have joint unlimited liability
toward creditors (art.22 Law on Entrepreneurs and Companies). As
at January 2014 there were 449general partnerships in Albania.

limited partnerships: a partnership is a limited partnership, if at least

one partners liability is limited to the amount of his interest (limited
partner), while the liability of other partners is not limited (general
partners). Limited partnerships have their own legal personality (distinct from their partners/members). As at January 2014 there were
131limited partnerships in Albania.
102. A partnership obtains legal personality upon entry in the Commercial

Register (art 42 Law on the NRC).
103. The Civil Code and the Law on the NRC recognise the concept of
simple partnership, which is defined as a contract by which two or more
persons agree to exercise an economic activity in order to share the profits
derived from it (arts.1074 of the Civil Code).
Commercial registry
104. Partnerships are obliged to register with the NRC, within 30days
after the date of its creation. The application for registration may be performed
online (arts.20 to 22 Law on the NRC). General and limited partnerships
register by filing the application form for initial registration, submitting the
identification documents of the members or partners, and by signing the
relevant declaration for the acknowledgement, acceptance and application of
the legal provisions in force concerning the organisation and functioning of
the type of company being registered. The application for initial registration
and the above mentioned declaration must be signed by the partners or by the
authorised persons to act on their name and behalf (art.28 paragraph4) Law
on the NRC).
105. The information that must be entered in the Register upon formation
of a partnership includes:

Name;
Date of incorporation;
Identity information of the founders;
Object and duration, if determined;
Identity information of the responsible persons for the administration

and representation of the company in relation to third parties;

kind and value of the contributions of each partners (limited or

unlimited) and their participation in the capital for unlimited partnerships (arts.33 and 34 Law on the NRC).
106. The application for the initial registration must be submitted by all
the partners of a general partnership and by all the general partners of a
limited partnership or by any person authorised by the partnership. The registration of transfers of participations or quotas can be submitted also by the
partner participating in the transaction (art.26 Law on the NRC). Limited and
general partnerships are obliged to deposit at NRC any change in ownership
and other information provided during registration process within 30days of
its occurance (arts.22 paragraph3 and 43 Law on the NRC).
107. Simple partnerships are required to register with the NRC. Registration
with the NRC is performed by filing the application form for initial registration
and providing copy of the identification documents of the members. In case the
parties have concluded a written contract regarding the simple partnership, this
contract must also be provided at the time of registration (art.28 paragraph2
Law on NRC).
Information provided to tax administration

108. For tax purposes a partnership is treated as a single legal entity,
therefore a partnership is obliged to apply accounting standards, prepare
financial statements and file tax returns as a single entity (taxpayer) (art.2
paragraph b(iv) Law on Income Tax). The tax return submitted by legal entities does not require disclosure of ownership information but this information
is required to be deposited to the NRC at the moment the partnership is
established and must be updated within 30days. As for companies, registration with the NRC also constitutes a simultaneous registration with the tax
authorities (art.59 Law on the NRC and art.40 LTP). All residents partners
in a partnership are obliged to register for tax purposes at the GTD and
fill a personal tax return (art.13 paragraph1 Law on Income Tax). Simple
partnership is treated as transparent under Albanian tax law. This kind of
partnerships is also obliged to register with the GTD. Moreover the partners
are liable to tax in relation to the income they derive from the joint business
activities under the simple partnership and therefore must be register with the
GTD.
Information held by the partners and service providers

109. Partners in a partnership are not specifically required to maintain
a record of all partners. However, Albanian legislation requires that where
a partnership has created a website, all data reported to the NRC shall be
placed on this website and be available to every interested person (arts.23
paragraph2 and 57 paragraph2 Law on Entrepreneurs and Companies).

Further, applications for registration of any changes in information provided
to the Enterprise Registry must be signed by all partners of the partnership
(art.43, Law on the NRC) and it is therefore necessary that information on all
partners must be available to them.
110. To the extent that any partnership engages the services of an AML
obligated person, such as a bank, or auditor, the beneficial owners of the
partnership (i.e.partners that own or control more than a 25% stake in the
partnership) would be identified through CDD (see A.1.1).
Foreign partnerships
111. A partnership created under the laws of foreign jurisdiction (foreign
partnership) which establishes a branch, subsidiary or office in Albania will
be subject to the same requirements concerning registration that are applicable to foreign companies. Partnerships formed outside of Albania will not
be required to provide ownership information on registration when setting
up any kind of activity in Albania. Nevertheless, the application for registration must be accompanied by the statutes, acts of incorporation or equivalent
documents according to the foreign law; therefore, availability of ownership
information would then depend on the law of the jurisdiction where the partnership was incorporated whether its incorporation act and by-laws contain
ownership information.
112. According to the tax laws, partnerships are treated as legal entities
(similar to companies). Both the partnership and its partners (physical or legal
persons) are obliged to file tax returns. After the distribution of the partnerships profits to its partners, the partners are subject to the withholding tax
for their part of the profits (art.33 paragraph1 Law on Income Tax). The tax
return must be submitted by the partnership, and the payment of the personal
tax on partners will be withheld. The profit tax return submitted by legal
entities does not require disclosure of ownership information. Nonetheless,
when the total gross income of the partner exceeds LEK2million
(EUR14325.62), from all the partners sources of income, the non-resident
partner or it representative might choose for file the personal income tax
return6 (art.13 paragraph4 Law on Income Tax); therefore, identity information of the partner of foreign partnerships will be available to the GTD in
6.
A non-resident taxpayer is required to file a tax return or appoint a resident tax

representative who should be registered with the GTD and will be responsible for
filling the tax return on behalf of the taxpayer. However, a non-resident taxpayer
may not appoint a resident tax representative when all income sourced in Albania
are subject to final tax withheld (art.9 LTP) and therefore he or she will not be
required to file the income tax return.

certain cases. However, in cases a foreign partnership that carries on business
in Albania or has income, deductions or credits for tax purposes in Albania
does not distribute profits to its partners, there is no obligation in Albania
for the identity of these partners being disclosed. Albania is recommended
to ensure the availability of information on the identity of partners of foreign
partnerships carrying on business in Albania or having income, deductions
or credits for tax purposes in Albania in all cases.
In practice
113. As mentioned above, partnerships are obliged to register with the
NRC, within 30days after the date of its creation. It is the Albanian authorities view that this legal basis ensured the NRC would have the ownership
information for all partnerships. Despite the legal basis for registration, it is
not apparent that specific efforts have been adopted by the NRC to monitor
compliance by partnerships and their partners with the obligations to file and
maintain ownership information. Neither is it apparent that sanctions for noncompliance were enforced in practice. Albania is recommended to improve
its system of oversight in order to ensure that updated ownership information
is being maintained in respect of all relevant entities.
114. The GTD acknowledged that foreign partnerships that are tax residents in Albania would not be under the obligation to maintain ownership
information. In practice, this information would be available under certain
instances (such as when the partners themselves are residents in Albania. It is
recommended that Albania should ensure the availability of ownership information of foreign partnerships with sufficient nexus to Albania in all cases.
Conclusion
115. The legal and regulatory framework in Albania ensures that ownership information regarding partnerships is available. Partnerships registered
in Albania are required to submit information on all their partners to the NRC
and report any subsequent changes thereof. However there is not express provision under the Albanian law that requires foreign partnerships conducting
business in Albania or having income, deductions or credits for tax purposes
in Albania to maintain or provide identity information of their partners in all
cases.
Trusts (ToRA.1.4)
116. Albanian legal system does not recognise the concept of trust nor
allows the creation of trusts under the Albanian Jurisdictions. Further,
Albania is not a party to the Hague Convention on the Law Applicable
to Trusts and on their Recognition7. However, there are no restrictions in

Albania domestic law that prevents a resident of Albania from acting as a
trustee, protector or administrator of a trust formed under foreign law.
Tax legislation
117. There are no specific provisions under the Albania tax laws on the
taxation of the assets or income derived from foreign trusts with a link to
Albania. However, Albanian tax law requires all residents carrying out economic activities (individuals and legal entities) to pay income tax on all their
income, regardless of the location of the source of wealth of such income
provided they are the beneficial owners of such assets and income and to fill
a tax return (arts.4, 7 and 17 Law on Income Tax and arts 40 and 64 LTP).
In the event an Albanian resident is acting as a trustee of a foreign trust he/
she will be directly responsible for filing tax returns and will be taxed on the
assets and income which he/she holds for the trust as if these are his/her own
assets and income.
118. Trustee residing in Albania (professionals or not) are subject to
record keeping requirements for the determination of their income, as any
persons resident in Albania. Thus, trustees must keep all records necessary to
determine their income (arts.46-48 LTP). Trustees and beneficiaries residents
in Albania will be also subject to obligations under Article60 of the LTP,
which requires all taxpayers to provide to the tax administration any information regarding to their tax liabilities. If a tax investigation or tax audit occurs,
the GTD has the right to request and verify all documentation regarding a
taxpayers income, expenditure, assets, liabilities and financial transactions
(art.80 LTP). These requirements should include trust deeds and the name of
settlors and beneficiaries of the trust, and information on the trust assets that
have generated the income.
119. The requirements under the LTP requires all taxpayers and tax representatives to provide information to the tax authorities whenever taxable
income must be determined, and accordingly a trustee resident in Albania
must be able to provide the GTD with information on the settlors and beneficiaries of trusts that he/she administers, including trust deed.
AML legislation
120. Any person providing services in the framework of a trust or any
similar contractual relationship under foreign law becomes a service provider in relation to the AML legislation and is subject to AML requirements
(art.3 paragraph(gj) subparagraph and paragraph(k), subparagraphs(i) and
7.
www.hcch.net/index_en.php?act=conventions.text&cid=59.

(viii) (iii) and (v) AML/CFT Law). Consequently, all professional and nonprofessionals trustees are required to conduct CDD which in the case of the
customers who are legal arrangements (trusts or other similar arrangements)
includes:

to understand the ownership and control structure and to determine

who are the individuals owning or controlling the customer, including those persons who exercise the ultimate effective control over the
legal persons or legal arrangement (art.4/1 paragraph(d)).
verify if any person acting on behalf of the customer is so authorised

and to identify and verify his identity;
verify their legal status through the documents of foundation, registration or similar evidence of their existence and provide information
about the name of the customer, the name of trustees (for the legal
arrangements), legal form, address, managers and/or legal representatives (for legal persons) and provisions regulating legal relationships
(art.4 paragraph(b) of the AML/CFT Law);
121. Further, the obligated person is required to conduct enhanced due

diligence to business relationships and transactions with trusts and nonresident customers, in particular where such relationships and transactions
are undertaken without the presence of the customer (art.8 paragraphs4
and 6 AML/CFT Law). In order to implement the enhanced due diligence,
the obligated person should require the physical presence of customers and
their representatives prior to establishing a business relationship and prior to
executing transactions on their behalf (art.7 AML/CFT Law).
In practice
122. The GDPML reported that supervisory outcomes of the period under
review show that there have been no cases of trusts operating in Albania.
Conclusion
123. Although Albanian law does not recognise the concept of trust, there
is no obstacle in Albania domestic law that prevents a resident from acting
as a trustee, administrator or a foreign trust to invest or acquire assets in
Albania. A resident trustee of a foreign trust is subject to specific obligations
to keep identity information under Albanian legislation. The combination of
the AML and tax legislation ensure that information is available regarding
the trustees, the settlor and beneficiaries of a foreign trust administered by
an Albanian trustee. The GDPML reported that supervisory outcomes of the
period under review show that there have been no cases of trusts operating
in Albania.
Foundations (ToRA.1.5)
124. The concept of foundation under the Albanian Law refers to Not-forProfit Organisations (NPO/NGO). A NPO means associations, foundations
and centres, whose activity is conducted independently and without being
influenced by the state (arts.2 paragraph3 and 4 Law on NPO). A foundation has the right to perform economic activity for the maintenance and
utilisation of its own property and to achieve its goals, which shall not have a
profit-making nature (art.35, Law on NPO). Profit obtained from foundations
economic activity cannot be divided among its founders; it can be used only
for purposes specified in the articles of association (art.36 Law on NPO). As
at January 2015, there were 1967 foundations registered.
125. A foundation obtains the status of a legal person only after registration with NPOs Register at the Tirana District Court (arts.14 and 32 Law on
NPO). Ownership information must be reflected in the Founding Act and
Statute of each NPO deposited with the Tirana District Court for the registration. Article22 of the Law on the Registration of Non-profit Organisations
obliges founders to submit to the Court an application containing explanations regarding the form and purpose of the non-profit organisation, the
object of its activity, identity of the founders and members of the executive
board, the structure of the leading organs, the location of its headquarters and
the identity of its legal representatives. Foundations are obliged to update and
report any changes in the Founding Act to the Court 30days from the date
the decision is taken (art.16 Law on NPO).
126. Foundations are also required to register with local and central tax
authorities after registration with the Tirana Court. The information to be
recorded in the registration includes identity information of the managers/directors and the legal representative of the organisation (art.42 LTP). Foundations
are required to notify the tax administration any changes in respect to the
name; business or contact address; legal status; establishment/closure of
new branches, divisions or merging and change of economic activity within
15days of the date when the change occurs (art 43 paragraph3 LTP). A fine of
LEK25000 (EUR178.97) per violation will apply if a taxpayer fails to register
or update its registration information within the corresponding register (art.112
LTP).
127. Persons providing services to a foundation are subject to the AML/
CFT Law. An obliged entity (financial institution or one of the designated
categories of professionals) should conduct CDD measures, which include
identity information of the beneficial owner. In addition, in the process of
conducting CDD, the AML requires service providers in the case of legal
entities that do not carry out for-profit activity, to verify information regarding
the name, number and date of court decision related to registration as a legal
person, statute and the act of foundation, number and date of the issuance of

the license by tax authorities, permanent location, and the type of activity
(art.5 (1()) AML/CFT Law). Further, the AML/CFT Law provides that every
authority that registers or licenses non-profit organisations shall report immediately to the responsible authority every suspicion, information or data related
to money laundering or terrorism financing (art.20).
Conclusion
128. There is no provision for private-interest foundations in Albanian
law. Foundations are non-profit entities established exclusively for publicinterest purposes. Albanias legal and regulatory framework ensures the
availability of information on the NPOs founders and members of the executive board (or any other person with the authority to represent the foundation)
for the NPOs under the scope of their legislation. Information on founders
and members of the executive board must be provided to the Court of Tirana
upon registration and kept updated. Such information is required to be kept
by the foundation for all the time they remain registered. Persons providing
services to a foundation are subject to the AML/CFT Law, the AML requires
the verification of the statute and the act of foundation where ownership
information is reflected, and the identification of the beneficial owners.
Enforcement provisions to ensure availability of information

(ToRA.1.6)
129. Albania has in place the relevant legislative basis for effective
enforcement provisions to ensure the availability of ownership and identity
information. The existence of appropriate penalties for non-compliance with
key obligations is an important tool for jurisdictions to effectively enforce the
obligations to retain identity and ownership information.
130. The Law on the NRC provides penalties in case to any subject providing declaration of false data with the registers, it does not constitute a criminal
act, but constitutes an administrative contravention and is punishable by
fine of LEK15000 (EUR107.38). If initial registration with the NRC is not
performed within the time provided by the law this violation is punishable
by fine of LEK15000 (EUR107.38) (art.22/3 and 74/3, Law on the NRC).
Irregularities with regard to the issuance of shares and registration in the
share registry for joint stocks companies might be considered as a criminal
act and penalised according to the Criminal Code (art.119 paragraph4 of the
Law on Entrepreneurs). Applicable penalties on the Criminal Code could be
in the form of a fine ranging from LEK50000 (EUR357.94) to LEK10million (EUR71587.09) or up to ten years of imprisonment (art.34 sections IV,
VII and VIII of chapter III, Criminal Code). The NRC was unable to provide
relevant statistics on the penalties imposed over the review period.
131. The LTP provides additional sanctions if a taxpayer fails to register

or update its registration information in the NRC, such taxpayer will be
subject to a fine of LEK25000 (EUR178.97) per violation (art.112 LTP).
In regards to other relevant information requested or to be submitted to the
tax authority penalties also applies. In case of failure to file a tax return by
the due date a fine shall be imposed on the taxpayer in an amount from to
LEK10000 (EUR71.59) (art.113 LTP). A person who refuses to provide
relevant information to the tax administration is liable to a penalty ranging
from LEK10000 (EUR71.59) up to LEK50000 (EUR357.94) per violation
(art.126 LTP).). The GTD was unable to provide relevant statistics on the
penalties imposed over the review period.
132. An obligated person in breach of requirements for customer identification or customer due diligence under AML is liable to a fine which, in
respect of individuals, is from LEK100000 (EUR715.87) up to LEK1million (EUR7158.71) and in respect of legal persons from LEK300000
(EUR2147.61) up to LEK3million (EUR21476.13) (art.27 (2)). In cases
when they do not meet the obligations in regards to business relationship with
other customers such as non-profit organisation, non-residents, trusts and
companies with nominee shareholders, the obligated person is liable to a fine,
which in respect of natural persons, is from LEK200000 (EUR1431.74)
to LEK2000000 (EUR14317.42) and in respect to legal persons from
LEK400000 (EUR2863.48) to LEK4000000 (EUR28634.83) (art.27 (3)).
In cases the obligated person does not supply information requested by the
responsible authority or fails to maintain the documentation concerning identification, he or she is liable to a fine which, in respect of individuals, ranges
from LEK200000 (EUR1431.74) up to LEK1500000 (EUR10738.06)
and in respect legal persons from LEK1000000 (EUR7158.71) up to
LEK5000000 (EUR35793.54) (art.27 (3)). The GDPML reports having
imposed administrative sanctions (fines) for the infringements encountered
during the supervisory process. The administrative violations of the reporting entities generally refers to: (i)violation of the articles4, 4/1 and 5 of the
AML/CFT Law on the identification and maintenance of documents required
for customer identification; (ii)violation of the article11 of the AML/CFT
Law which requires the obligated person to provide for internal regulations
and guidelines that take into account the money laundering and terrorism
financing risk originating from customers or businesses; or (iii)violation of
the article12 of the AML/CFT Law on the reporting of the suspicious transactions. Over the review period, the GDPML has conducted inspections and
held meetings with the reporting entities which it supervises. The main aim
for the meetings is to raise their level of awareness and focus their attention
on identification of CDD deficiencies.
In practice
133. The NRC and CRS were not able to provide details of the monitoring and enforcement efforts undertaken during the review period to ensure
that ownership information for entities under their charge are accurate and
updated in a timely manner. It is recommended that Albania ensure that the
obligation imposed on the various corporate entities to maintain updated
ownership information is sufficiently monitored in practice.
Conclusion
134. Albanian law provides for sanctions in respect of key obligations to
maintain ownership information. However, the effectiveness of the enforcement provisions was not apparent. Albania is recommended to improve its
system of oversight in order to ensure that updated ownership information is
being maintained in respect of all relevant entities.
Determination and factors underlying recommendations
Phase1 determination
The element is in place, but certain aspects of the legal implementation
of the element need improvement.
Factors underlying
recommendations
Recommendations
Foreign companies with a sufficient

nexus to Albania (e.g.being resident
for tax purposes) and foreign
partnerships that are carrying
on business in Albania or having
income, deductions or credits for
tax purposes in Albania are not
required to maintain nor provide to
the authorities ownership information
in all cases.
Albania should ensure the availability

of ownership information regarding
to foreign companies with sufficient
nexus to Albania and foreign
partnerships carrying on business in
Albania or having income, deductions
or credits for tax purposes in Albania
in all cases.
Under the current legislation, there

is uncertainty whether there are
requirements on companies that
might have issued bearer shares
prior to 2008 which obligate the
holders of any such shares to comply
with the ownership registration
mechanisms.
Albania should ensure that

appropriate mechanisms are in
place to identify holders of bearer
shares issued under the 1992 Law on
Companies.
Phase2 rating
Partially Compliant.
Factors underlying
recommendations
Over the review period, the National
Registration Centre and Centre
of Registration of Shares did not
have a system of oversight in
place to monitor compliance with
the obligations to maintain and
file ownership information and it
is not apparent that sanctions for
non-compliance were enforced in
practice.
Recommendations
Albania is recommended to improve
its system of oversight in order to
ensure that updated ownership
information is being maintained in
respect of all relevant entities.
A.2. Accounting records

Jurisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements.
135. The Terms of Reference set out the standards for the maintenance
of reliable accounting records and the necessary accounting record retention
period. They provide that reliable accounting records should be kept for all
relevant entities and arrangements. To be reliable, accounting records should:
(i)correctly explain all transactions; (ii)enable the financial position of the
entity or arrangement to be determined with reasonable accuracy at any time;
and (iii)allow financial statements to be prepared. Accounting records should
further include underlying documentation, such as invoices, contracts, etc.
Accounting records need to be kept for a minimum of five years.
General requirements (ToRA.2.1)

136. The general accounting obligations are stipulated by the Law on
Accounting and Financial Statements. The Law on Accounting and Financial
Statements applies to all for profit entities operating in the Republic of
Albania, including financial institutions and holding companies, irrespective
of their legal structure or specific legal requirements that may apply to them.
The scope of application of the law includes also not-for-profit entities (art.2,
Law on Accounting and Financial Statements). Trustees of foreign trusts are
covered by these obligations including in respect of trust income on which
they are taxable.

137. All entities covered by the Law on Accounting and Financial Statements
are obliged to keep accounting as per Albanian National Accounting Standards
(NAS), which are based on International Financial Reporting Standards (IFRS),
with some simplifications. The Law on Accounting and Financial Statements
also requires large companies (including all banks and insurance companies) to
use IFRS in their accounting and financial reporting. Companies are considered
large companies when their annual income is higher than LEK1250000000
(EUR8948385.7) or their annual average number of employees exceeds 100
per year (Decision of the Council of Ministers no. 742, dated 7November 2007).
138. All entities covered by the Law on Accounting and Financial Statements
have a duty to produce accounts, which must be truthful, comparable, timely,
significant, understandable and complete. All transactions and events must
be in compliance with accounting policies to ensure the completeness, neutrality, prudence, and truthful representation of the financial statements. The
accounting records should present a true and fair view of the financial position, performance, changes in financial position and cash flows of the entity.
A financial report consists of a balance sheet, an income statement (profit
and loss account), a cash flow statement, a statement of changes in equity and
notes to financial statements, containing disclosure of accounting policies, as
well as other explanatory material (art.12, Law on Accounting and Financial
Statements).
139. Additionally to the provision in the Law on Accounting and Financial
Statements, the Law on Statutory Audit requires certain legal entities have
their financial statements audited prior their publication by statutory auditors
or audit firms. Entities subject to this obligation are the following:
a. all commercial companies, regardless of their form of organisation,
which apply in their accounting records the ISFR;
b. all joint stock companies, which apply in their accounting records
the national accounting standards;
c. limited liability companies, which in their accounting records apply
national accounting standards, providing that they meet two of the
following three thresholds: i)total assets in balance sheet at the end
of the year is equal to or exceeds the amount of LEK40million
(EUR286348.34); ii)turnover for the period is equal to or exceed
the amount LEK30million (EUR214761.26); and iii) average
employment of 30people.
140. The obligation to conduct statutory audit of the financial statements
by an independent licensed auditor does not release the entitys managers or
its supervisory body from the responsibilities of maintaining the accounting
records and the preservation of all documents substantiating economic transactions of the entity (Art 18 Law on Accounting and Financial Statements).
141. Any infringement pertaining to the production and maintaining of

accounting records and the preservation of all documents substantiating
economic transactions of the entity will result in an administrative, civil
or penal penalty dependant to the damage caused. The type of penalty will
be established based on the provisions of the Civil Law, Penal Law or other
laws concerning to this field (art.23 Law on Accounting and Financial
Statements). In particular, specific sanctions for the failure to keep records
and documentation in accordance with the Law on Accounting and Financial
Statements are provided by tax law as further described in the subsection
below.
142. Law on Accounting and Financial Statements applies equally to all
relevant entities situated in Albania, other than those foreign trusts that do not
carry on commercial activity in Albania.
Tax law
143. Taxable income of taxpayers (tax residents and permanent establishments) is determined for the taxable period on the basis of balance
sheet and its annexes which are required to be prepared according to Law
on Accounting and Financial Statements, as well as rules and regulations
issued by the Ministry of Finance for this purpose (art.19 Law on Income
Tax, art.57 LTP). Moreover, the annual tax return must be accompanied
by the annual accounts of the undertaking (art.29 Law on Income Tax).
Taxpayers are also required to maintain registers, accounting records, books
and financial information, and issue tax invoices and receipts in respect
of all payments received (arts.46 to 48 and 57 LTP). Registers, books and
financial information are documents that chronologically and systematically
record commercial transactions of a taxpayer, which must be kept to determine the amount of tax liabilities of such taxpayer (art.48 paragraph1 LTP).
Article5(d) of the LTP defines Books and records as commercial records,
accounting documentation, annual accounts and financial reports as well as
other documents relating to a taxpayer, such as business correspondence,
invoices and any other relevant documents that are required to be created
and maintained in order to determine the amount of taxes owed by such taxpayer. According to the LTP failure to keep the records and documentation
can be sanctioned with a penalty of LEK10000 (EUR71.59) in the case of a
small business8 and LEK50000 (EUR357.94) for in case of a large business
(art.118 LTP). To simplify filing requirements for small businesses, businesses with annual turnover below LEK8million (EUR57900) are only
required to keep a book of purchases and sales.
8.
To be considered as a small business, the annual turnover must be below

LEK8million (EUR57269.67) (Article12 Law on Income Tax).

144. Under Article19 of law number 8438 On Income Tax, all taxpayers subject to corporate income tax are obliged to keep accounting records
according to the Albanian National Accounting Standards and IFRS.
Sanctions will be imposed on companies that fail to meet this obligation (Art
118 of Tax Procedures Law).
In practice
145. In Albania, all corporate entities with income subject to tax in
Albania are required to file an annual tax return with the GTD. For individuals, only taxpayers with an annual income above LEK2million
(EUR14500) are required to file an annual tax return. In practice, compliance with accounting obligations under accounting and tax law is supervised
by the GTD. The GTD checks compliance with accounting obligations during
the course of tax audits, which adopt a risk based approach (details below).
However, the adequacy of the GTDs oversight system could not be fully
ascertained, as relevant statistical information such as the compliance with
filing requirements, sanctions applied to non-filers and percentage of taxpayers subject to audit was not available. Albania is recommended to enhance
its system of oversight to ensure that accounting information is being maintained by all relevant entities.
146. Over the review period, GTD carried out a general audit programme
and the audited taxpayers were chosen by a risk-based assessment.
147. The GTD explained that it would issue audit manuals and audit
programmes to the regional tax offices, which would be then be responsible
for executing the field audits. The Risk Unit within the GTD is in charge
of identifying 60% of the taxpayers being audited, with the help of a risk
assessment register which was developed in 2013 with assistance from IMF.
The taxpayers investigated were chosen as a result of careful risk analysis
where certain factors such as taxpayer profile, history, industry, compliance
with information filing obligations, customer base and payment profile are
assessed. The regional tax offices are tasked with identifying the remaining
40% of taxpayers being audited, with the selection being based on problems
(such as taxpayers that have applied for VAT refunds or recently liquidated
their companies) being picked up by the regional offices. The transfer pricing unit within the GTD also selects a list of taxpayers that have transactions
with foreign companies for audit, with a focus on transactions performed by
related or associated enterprises to identify taxpayers that did not file taxes.
148. According to the GTD, the following are the basic steps in the audit
programme. First, the risk assessment identifies taxpayers that have higher
probability of violating tax laws. The GTD then lists the taxpayers that are
scheduled to be audited in the year, for each Regional Tax Office to carry out
the audit. After the identification, the Regional Tax office sends a notification to the taxpayer to inform him of (i)the name of the tax inspector that is
conducting the audit, (ii)the legal references of the audit, (iii)when the audit
will commence and (iv)the relevant taxable period and type of taxes that will
be subject of the review. This notification is sent officially by email and mail
post to the taxpayer. Before starting the audit the tax inspector is expected
to study the dossier of the taxpayer in order to identify possible problems
during the review. After receiving the contact of the taxpayer from the GTD
system, the tax inspector arranges for and conducts an interview with the
taxpayer in order to analyse the economic activity, its nature, bookkeeping
organisation and its functioning, the location of primary and auxiliary activities understanding of the specifics of activities, familiarity with customers
and suppliers, as well as determining the progress of the business. The tax
inspector may undergo a physical check of the taxpayers inventories, the
situation of merchandise, cash, workforce, and other assets. Lastly, the tax
inspector may also refer to the taxpayers VAT declaration and Health and
Social Security returns as alternative sources of information for the tax audit.
Number of audit assessments conducted by the GTD over the review period
Year 2012
Year 2013
Year 2014
3772
3908
3525
Penalties (in million LEK) imposed as a result of audit assessments

conducted by the GTD over the review period
Year 2012
Year 2013
Year 2014
Value Added Tax (VAT)
Tax type
4237
3604
3129
Corporate Income Tax (CIT)
1845
1389
2058
Pay-as-you-earn tax (PAYE)
133
77
48
Personal Income Tax(PIT)
68
20
39
Other
3877
986
474
Total
10160
6076
5748
Note: GTD is unable to provide a breakdown of penalties specifically imposed on entities

for failure to meet their obligations to maintain accounting records.
149. Regarding trusts, under Albanian tax laws, the income or assets
derived in connection of a foreign trust are subject to tax as any other assets or
income of the Albanian resident trustee. Therefore, the requirement described
under the tax laws to maintain accounting records will also be applicable to
all Albanian residents acting as a trustee or administrator of a foreign trust.
AML law
150. Service providers, including a person acting, in a business capacity, as
trustee of a foreign trust are obliged to keep records of all data and documents
on all transactions within a business relationship national or international,
regardless of whether the transaction has been executed in the name of the customer or of third parties, together with all supporting documentation, including
account files and business correspondence. The data of the transactions must
be maintained with all the necessary details to allow the re-establishing of
the entire cycle of transactions for 5years from the date of termination of
the business relationship (art.16 AML/CFT Law). The obliged person that
does not maintain data of client transactions is liable to a fine which, in
respect of individuals, is from LEK200000 (EUR1431.74) to LEK1.5million (EUR10738.06) and in respect legal persons from LEK1million
(EUR7158.71) to LEK4million (EUR28634.83) (art.27 AML/CFT Law) and
criminal sanctions could be applied. During the review period, no sanctions
have been directly imposed under Article16 of the AML Law.
151. Service provider to trusts and trustees are subject to the record keeping requirements under the AML/CTF Law, as described in the paragraph
above. The obliged person that does not maintain data of client transactions
is liable to a fine which, in respect of individuals, is from LEK200000
(EUR1431.74) to LEK1.5million (EUR10738.06) and in respect legal persons from LEK1million (EUR7158.71) to LEK4million (EUR28634.83)
(art.27 AML/CFT Law) and criminal sanctions could be applied.
Other Laws
152. Banks are required to maintain accounts and prepare financial
reports, in order to reflect accurately and in accordance with the accounting
rules and methods its financial state, on individual or consolidated basis. The
accounts and financial reports must be prepared according to the Albanian
accounting standards and international accounting standards in force (art.47
Law on Banks in the Republic of Albania). The Bank of Albania shall fine
the administrators of the bank or branch of foreign bank up to the amount of
LEK500000 (EUR3579.35) to LEK800000 (EUR5726.97) if breaching
this obligation (art.89 paragraph3 Law on Banks in the Republic of Albania).
Conclusion
153. All relevant Albanian entities as well as foreign entities involved in
economic activities in Albania are required under the law on Accounting
and Financial Statements to keep accounting records that correctly explain
the entitys transactions, enable it to determine the entitys financial position with reasonable accuracy at any time and allow financial statements to
be prepared. The requirements under the Law on Accounting and Financial

Statements are supplemented by obligations imposed by the tax law and
under AML regulations. The requirement to prepare and maintain accounting
and financial documentations under the Law on Accounting and Financial
Statements, also applies to foundations.
154. Albania was not able to provide information on the number of EOI
requests received during the review period relating to accounting information. Nevertheless, peer input indicates that such information was requested
in at least six instances and has been provided by Albania.
Underlying documentation (ToRA.2.2)

155. All relevant Albanian entities as well as foreign entities involved in
economic activity in Albania are required to keep underlying documentation,
including legal and financial documentation (contract, invoices, banking
documentation, etc.) or any other relevant information that are required to
be created and maintained in order to determine the amount of taxes owed
by such taxpayer. Accounting records are based on accounting entries. Each
accounting entry must be justified by supporting evidence in documentary
or computerised form that ensures for reliability of the bookkeeping and
financial statements. For each of such accounting entry, the origin, nature,
date and content of the economic transaction or event must be written (art.6
Law on Accounting and Financial Statements).
156. Albanian law defines supporting evidence as source document, supplementary document and accounting records (books). Source documents contain
initial recordings of events and other economic transaction. Supplementary
documents contain data taken from source documents and accounting records
(books) are records containing chronologically and systematically recorded
data and effects of economic transactions taken from source and supplementary
documents (art.3 Law on Accounting and Financial Statements).
157. Taxpayers subject to VAT or profit tax must maintain registers,
accounts documentation, financial books and issue tax invoices, tax vouchers or tax receipts, that chronologically and systematically record their
commercial transactions, which must be kept to determine the amount of
tax liabilities of such taxpayer. Taxpayers are also obliged to provide to the
tax administration such information upon request records and books relating
to tax purposes may be kept electronically, when the applicable tax legislation or relevant sub-legal acts allow for it (arts.46, 48 and 60 LTP). If the
taxpayer refuses to provide information to the tax administration a fine shall
be imposed in an amount of LEK10000 (EUR71.59) up to LEK50000
(EUR357.94) per violation (art.126 LTP).

158. Therefore, the provisions set out under the Law on Accounting and
Financial Statements and the Law on Tax Procedures are in conformity to the
international standard to maintain all relevant underlying documentation. As
mentioned above, AML/CFT Law requires obliged persons to keep underlying documentation for transactions with their clients, including account files
and business correspondence (Art.16(2) AML Law).
159. In practice, availability of underlying documentation is supervised by
the GTD together with availability of accounting records. The same supervisory and enforcement measures apply as outlined above (see sectionA.2.1).
Conclusion
160. Accounting and tax requirements under Albanian law require under
lying documentation to be available sufficient to meet the international
standard for effective exchange of information. In practice, peer input
indicated that underlying documentation (including copy of documentation
concerning the payment for certain commercial transactions) has been provided by Albania, which implies the availability of the information in the
cases requested.
5-year retention standard (ToRA.2.3)

161. Accounting records and underlying documentation must be kept for a
period of 10 consecutive years after the end of the accounting period to which
they relate, unless a longer period is compulsory in accordance with another
law or regulation (art.17 Law on Accounting and Financial Statements).
162. Taxpayers are required for the purpose of substantiating the accuracy
of tax liabilities to retain financial and accounting documents for five years
starting from the end of the tax year to which documents pertain (art.48
paragraph2 LTP).
163. Persons obliged under AML rules to maintain transaction records
are required to store them at least for five years following the end of business
relationships (art.16 AML/CFT Law).
The element is in place.
Phase2 rating
Largely Compliant.
Factors underlying
recommendations
The General Taxation Department
(GTD) is the supervisory authority
tasked with monitoring the availability
of accounting records in Albania.
However, no information was
available in relation to the compliance
rate with tax filing requirements
or in relation to enforcement
measures taken in relation to nonfilers. Information concerning the
percentage of taxpayers audited was
also not available. Therefore, the
adequacy of the oversight system
could not be fully ascertained.
Recommendations
Albania is recommended to enhance
its system of oversight to ensure
that accounting information is being
maintained by all relevant entities.
A.3. Banking information

Banking information should be available for all account-holders.
Record-keeping requirements (ToRA.3.1)

164. Banking information should be available for all account-holders and
should include all records pertaining to the accounts as well as to related
financial and transactional information.
165. Recent amendments to the AML/CFT Law in 2012 prohibited the
issuance of bearer passbooks and other bearer instruments in Albania.
Pursuant to the Article4/1 AML/CFT Law, credit and financial institutions
must close all accounts whose owners cannot be identified. Under this provision credit and financial institutions are prohibited from opening and keeping
of anonymous accounts, accounts with fictitious names or accounts identified
only with a number or code, including the issue of bearer passbooks and other
bearer instruments. Moreover, Banks are required to perform CDD measures
which include verification of client identity through a personal identification document where the given name, surname, personal identity number
(or equivalent including date of birth in case of non-residents) are provided
or, in the case of a legal person, through documents attesting registration,
address of the registered office and identity of persons who are entitled to
represent the customer (art.4/1 AML/CFT Law). Further, CDD measures

require ongoing monitoring of the business relationship including ensuring
that the information held on the client is kept up-to-date (art.4/1(e)). All data
and documents gathered when identifying customers and performing CDD
have to be kept for a minimum of five years (art.16(1) AML/CFT Law). There
are administrative and criminal sanctions available in cases of breach of CDD
requirements (see sectionA.1.6). In practice, the GDPML has confirmed that
over the review period, through the inspections that have been carried out,
no case of bearer passbooks nor have anonymous accounts been identified
in banks.
166. Article16 of AML/CFT Law obliges banks to keep records of all
data and documents on all transactions performed under a business relationship. The scope of records to be kept is very broad and comprises information
on the nature and date of transactions, type and amount of currency involved,
and the type and identifying number of any account involved in the transaction. The transaction records and underlying documentation must be kept
for at least five years (art.16(2) AML/CFT Law). Failure to maintain data of
client transactions is liable to a fine in respect of individuals ranging from
ALL200000 (EUR1431.7) to ALL1.5million (EUR10738.06); and in
respect legal persons from ALL1million (EUR7158.71) to ALL4million
(EUR28634.83) (art.27 AML/CFT Law).
167. In summary, the customer identification obligations and record keeping obligations applicable to financial institutions in Albania, pursuant to the
AML/CTF Law require banking information to be available in Albania in
respect to all transactions and by all account holders.
In practice
168. The Central Bank of Albania (CBOA) has a banking supervision division that is in charge of developing and implementing strategies
for the supervision of individual banks; and assesses the inherent risks in
the banking system. CBOA applies risked-based supervision, in line with
FATF recommendations. CBOA adopts a three-year cycle for full inspection
for all 16banks in Albania. Both off-site and on-site reviews are adopted.
The frequency of the inspection depends on client profile of the financial
institution and based on complexity of transactions. The GDPML, which is
Albanias Financial Intelligence Unit, is the other agency that perform bank
examinations. The following table contains the statistical data regarding bank
examinations by GDPML. The GDPML shared that after each inspection a
detailed inspection act is concluded, explaining each point of the inspection
plan. When violations are encountered, a procedure of hearing takes place
and after that if the violations still persist, a fine is imposed to the reporting
entity. Periodically, the GDPML and CBOA would exchange results of each
organisations audits/inspections, and where necessary may co-operate in

joint inspections.
Year
No. of examinations
2012
2013
2014
169. With regards to the availability of banking information for tax assessment, the GTD has confirmed that it was able to obtain banking information
for domestic tax investigations/audit exercises.
170. Albania was not able to provide information on the number of EOI
requests received during the review period relating to banking information.
Peer input indicated that banking information had been requested at least in
one case and that the information was available and provided to the treaty
partner.
Phase2 rating
Compliant.
Compliance with the Standards: Access to information 63
B. Access to information
Overview
171. A variety of information may be needed in a tax enquiry and
jurisdictions should have the authority to obtain all such information. This
includes information held by banks and other financial institutions as well as
information concerning the ownership of companies or the identity of interest holders in other persons or entities, such as partnerships and trusts, as
well as accounting information in respect of all such entities. This section of
the report examines whether Albanias legal and regulatory framework and
its implementation in practice gives the authorities access powers that cover
the right types of persons and information and whether rights and safeguards
would be compatible with effective exchange of information.
172. The Albanian competent authority has broad access powers to obtain
and provide information requested by international counterparts under EOI
instruments. These powers include the power to carry out tax audits in
the premises of taxpayers and third parties, inspect documents, and make
requests for explanations and statements and the power to summon a taxpayer. Types of information under the LTP law which can be provided by
banks to the GTD seem broad enough to ensure effective exchange of information. All information gathering powers that exist for domestic purposes
can be used for EOI purposes regardless of whether there is a domestic tax
interest. Albania has in place enforcement provisions to compel the production of information including criminal sanctions. The powers for gathering
information for EOI purposes prevail over the professional privilege provisions that would otherwise apply to limit the tax authorities access to
information in domestic criminal tax investigation cases. In practice, as confirmed by peer input, Albanias competent authority has been able to gather
information to respond to exchange of information requests. The competent
authority advises that the requests received could be replied to relying on
information already available with GTD or with other government agencies. Since Albanias legal and regulatory framework has been significantly
amended after the review period to clarify its access powers in order to reply
64 Compliance with the Standards: Access to information

to EOI requests, a recommendation is given to Albania to monitor the application of that framework in practice.
173. There are no explicit provisions in the Albanian tax laws that oblige
the GTD to inform a person subject of an EOI request of the existence of such
request or to notify this person prior contacting third parties to obtain information. Taxpayers have the right to be notified of any administrative act, or
any action or omission for collection of tax liabilities against their property.
Albanian authorities have confirmed that this right does not apply in the
context of obtaining and providing information in relation to an EOI request
and that such notification does not occurs in practice. Albanias Ministry of
Finance has recently enacted a regulation on the collection of information
for EOI and no notification is provided under such regulation. In practice, as
confirmed by peer input, the rights and safeguards that apply in Albania have
not restricted or delayed an answer to an EOI request.
B.1. Competent Authoritys ability to obtain and provide information

Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information).
174. The competent authority to collect information and reply to an

EOI agreement is the General Taxation Department, within the Ministry of
Finance. Under the great majority of Albanias DTCs the competent authority is the GTD. For treaties where the competent authority is the Minister of
Finance (or his authorised person), the Minister of Finance has authorised
in written form to the GTD as the competent authority for EOI purposes
(Administrative Act no. 11393, dated 1October 2014). The GTD is the
responsible body for tax administration in Albania.
175. The EOI function within the GTD is handled by the Tax Treaty Unit,
which comprise of a Head of Unit managing the overall workload for the
team and five specialists.
Bank, ownership and identity information (ToRB.1.1)

176. As analysed in part A of this report, ownership information must be
kept by the NRC or by the legal entities themselves. Pursuant to Article62
of the LTP the GTD can request information to government authorities and
employees of government authorities. Further the Law on the NRC provides
that: in order to guarantee the facilitation of the registration procedures and
the offering of other additional services in favor of the interested subjects,
the NRC, in conformity with the law in force, cooperates with other public
authorities and enables on-line access and the electronic exchange of the
information recorded in its database with other registers or databases of other
public authorities, in the territory of the Republic of Albania and abroad
(art.69 Law on the NRC).
177. Moreover, the GTD has powers to gather information directly from
the taxpayer for the purposes of the determination of the taxpayers liabilities
and from third parties, in the instances defined in the LTP, as further analysed below. The same powers can be applied for gathering information for
purposes of answering and EOI request (arts.24 and 61/1 LTP). The powers
of the Albanian tax authorities are broad: the GTD can request information
concerning a taxpayers commercial transactions, technical processes or
procedures, and financial transactions between a taxpayer and third parties
(art.60 LTP).
178. The tax administration can also request third parties to provide oral
or written information, books and records and other information concerning
the tax liability of a taxpayer with whom they have entered into commercial
or financial transactions (art 61 LTP). These powers also apply in the context
of EOI. A third party in the context of the LTP refers to (art.62 LTP):

legal entities in respect of dividends they have paid to their shareholders or partners; persons with whom they conducted financial or
business transactions; payments made to sub-contractors, debtors
and creditors;
banks and financial institutions in respect of interest payments,

deposits and liabilities at the end of the year and other banking
transactions; electronic registration of bank accounts on behalf of
taxpayers, including trade name and personal identification number;
brokerage firms or investment funds, in respect of securities

transactions;
real estate agents, in respect of transactions of their clients;
buyers or sellers of real estate, in respect to the description and price

of a real estate property;
notaries for notarizing purchase and sale transactions of real estate or

movable property, or providing contract services;
resident and non-resident legal entities, in respect of payments made

to non-resident persons;
government institutions and employees of government administration;
other contractors of a taxpayer;

domestic or foreign donors, international agencies, non-profit organisations, in respect of payments made to taxpayers for the supply of
goods and services.
179. Article62 allows the GTD requesting information on individual

accounts and transactions to banks and other financial institutions. Further,
Albanias Ministry of Finance introduced Instruction no. 15 on 5May 2015 to
set out the procedures to obtain information in accordance with the provision
of international tax treaties. Article1 of the Instruction explicitly provides
that the GTD can seek information from all persons including banks and
financial institutions for the purpose of implementing international agreements in force in Albania. The Instruction provides that all information must
be provided to the GTD within 30days of receiving the request (art.7).
180. The types of information which can be provided by banks to the
GTD are broad enough to allow effective exchange of information. There are
no limitations on the ability of the competent authority to obtain information
held by banks or other financial institutions in response to an EOI request
and there are no special procedures (such as requirement of a court order) for
accessing information held by banks in Albania.
In practice
181. In practice, the GTD has been able gather information in order to
reply to exchange of information requests. The competent authority advises
that the requests received could be replied to relying on information already
available with GTD or with other government agencies
182. The GTD has 1630employees, being 270 located at headquarters and
the remaining at the 14 regional tax offices. As previously mentioned, Tax
Treaty Division, which is directly responsible for exchange of information in
addition to other matters counts with six employees.
183. The information sources available to the GTD have been expanding
over time. In addition to have direct access to all corporate records maintained by the NRC, the GTD maintains its own databases which have been
upgraded since 2015. In January 2015, a new IT system is in place which
allows GTDs central office in Tirana and the regional tax offices authority to
have electronic access to comprehensive information on Albanian taxpayers.
Since 2015, all taxpayers are required to file tax returns and accompanying documents electronically and no paper filing is currently available in
Albania.
184. The Tax Treaty Division is directly involved in gathering information to answer the requests for exchange of information. The Division has
direct access to the databases and has used this source to reply to some EOI
requests (e.g.requests related to the income declared by a taxpayer or a taxpayer address). If information is maintained in another government agency,
a specialist from the Tax Treaty Division would send official letter to request
for the information. This process was used to reply to requests.
185. With regards to the process for gathering the information requested
by a treaty partner from (i) the taxpayer or (ii) a third party such as the
bank, Albanian authorities informed that based on paragraph62.3 of the
TPL, banks and financial institutions are required to submit to the GTD, in
response to a written request, all the information they possess regarding taxable persons. GTD upon request can have information from banks in written
form. This includes the information on interest payments, deposits and liabilities at the end of the year. The written reply from banks, in most occasions is
accompanied by bank statements.
186. The GTD was not able to provide the number of EOI requests
received during the review period on a break-down on which type of information had been requested from Albania. However, the Albanian authorities
were able to confirm that, in order to reply to EOI requests, they collected
information available with the GTD and other government authorities (such
as the NRC). The competent authority did not need to gather information
directly from the taxpayer, a third party service provider (e.g.lawyer or
accountant) or a bank during the review period.
187. Albania amended the LTP (article61/1) to make the access to information for EOI purposes explicit in the law in December 2014, being effective
as of 1January 2015. Moreover, Instruction no. 15 of the Ministry of Finance,
detailing the procedures to be followed to reply and collect information
pursuant to an EOI request was also enacted after the review period. Since
Albania appears to have no experience in collecting information for EOI
from taxpayers or third-party information holders (such as banks and service
providers) and the legislation explicitly providing for powers and procedures
in this respect came into force after the end of the review period, it is recommended that Albania monitors the implementation of its new legislation.
Accounting records (ToRB.1.2)

188. The GTD has access to a taxpayers accounting information where
it is relevant for tax purposes. The LTP requires taxpayers to maintain and
provide as per request of the tax administration registers, accounting records,
financial books, information and documents necessary to determine the
accurate calculation of the taxpayers tax liability (arts.46, 48 and 60 LTP).
The same powers can be applied for gathering information for purposes of
answering EOI requests (arts.24 and 61/1, LTP).

189. During the review period, Albania was able to provide to its partner accounting records and underlying information. This information was
collected from the regional tax office of the GTD. Peer input confirms that
information has been provided.
Use of information gathering measures absent domestic tax interest

(ToRB.1.3)
190. The concept of domestic tax interest describes a situation where a
contracting party can obtain and provide information to another contracting
party only if it has an interest in the requested information for its own tax
purposes. Albania has no domestic tax interest with respect to its information
gathering powers. Information gathering powers provided to the GTD under
the LTP can be used to provide EOI assistance regardless of whether Albania
needs the information for its own domestic tax purposes.
191. Under Article24 of the LTP it is expressly stated that the powers
granted to the GTD may also be used for the fulfilment of Albanias obligations under the international agreements. Further, Article61/1 of the LTP,
introduced in December 2014, specifically ensures that the domestic powers
to obtain information for tax purposes would apply to requests for information in connection with a foreign tax liability. Article61/1 reads as follows:
Upon request of tax administration, for the purpose of the
implementation of tax treaties on tax issues or for the purposes
of international agreements, which permits administrative
assistance on tax issues, which are effective in the Republic of
Albania, any person must provide information in conformity
with provisions of the international agreement in tax field.
192. During the review period, Albania advised that is had no problem to
collect information absent a domestic tax interest. It is noted that Albanias
experience on this matter is limited, considering that information for EOI has
been gathered within GTD and from other government agencies. Albanias
peers have not raised particular concerns in this matter. Albania is recommended nonetheless to monitor the application of Article61/1 in practice, as
this provision entered into force after the review period.
Compulsory powers (ToRB.1.4)

193. Jurisdictions should have in place effective enforcement provisions to
compel the production of information. There are administrative and criminal
sanctions available to the GTD in case of non-compliance with obligation to
provide information requested for EOI purposes.
194. Sanctions are clearly specified in the Albanian tax law. The LTP
establishes that in the case a person refuses to provide information to the tax
administration, being such person a taxpayers or a third party, this person
shall be subject to a penalty from ALL10000 (EUR71.58) up to ALL50000
(EUR357.94) per violation (art.126). These sanctions also applies in the case
of failure to provide information requested by the GTD for EOI purposes
(art.61/1 LTP). In the case of failure to keep the tax records and documentation required under the LTP, the taxpayer shall be subject to a penalty of
ALL10000 (EUR71.58) for any violation when it is classified as a small
business and a penalty of ALL50000 (EUR357.94) for any violation for
other cases (art.119 LTP). In addition, if the tax authorities have reliable
information that the taxpayer hides information on his economic-financial
state, tax authorities have the right to seize, in the place of its activity, tax
documents, computer and fiscal equipment and other tools of keeping the
taxpayers documentation (art.127(3) LTP).
195. In addition, the violations committed by banks and other financial institutions that perform banking operations, when do not constitute
a criminal offense, but constitute an administrative offense, are punished
with administrative sanctions. For opening accounts for physical and legal
persons without official documentation confirming the taxpayer identification number will be sanctioned with a fine of ALL50000 (EUR357.94)
per violation. In the case the banks or financial institutions fail to meet the
deadline for notifying the tax administration of the opening by a taxpayer
of an account will be fined in an amount of ALL40000 (EUR286.35) per
violation (art.129 LTP).
196. During the review period, the competent authority advised that it was
not required to use the above-mentioned compulsory powers to compel the
production of information. It is noted that during the review period, Albania
did not need to request taxpayers and third parties other than government
agencies to provide information.
Secrecy provisions (ToRB.1.5)

197. Jurisdictions should not decline on the basis of secrecy provisions
(e.g.bank secrecy, corporate secrecy) to respond to a request for information
made pursuant to an exchange of information mechanism.
Bank secrecy
198. The Law on Banks in the Republic of Albania establishes the secrecy
of banking information. Articles91 and 125 define the obligation for banks
and any other authorities, such as courts and bank supervisory authorities, to
protect information that banks receive in the ordinary course of their activities.

According to Article125, banks or branches of foreign banks must protect the
secrecy of their clients information and must not use it for their own benefit or
benefit of third parties which they have served or serve. Similarly, Article91,
paragraph1 explicitly provides that: administrators, employees, current and
previous agents of the bank, judicial authorities and the inspectors or other
employees of the Bank of Albania or of other respective foreign authorities of
banking supervision, shall keep the secrecy for every information obtained in
the exercise of their activity in the bank or branch of a foreign bank and shall
not utilise it for personal profits or third parties outside the bank or branch of
a foreign bank, whom they serve or have served.
199. Furthermore, Article91 also provides under which circumstances
clients banking information can be disclosed. Accordingly, the information
shall be made available only to the Bank of Albania, the statutory auditor of
the bank or branch of a foreign bank, administrators, agents, and employees
of supervisory authorities of the foreign correspondent bank, to juridical
authorities whose right derives from the law, as well as when it is necessary
for the protection of interests of the bank or branch of a foreign bank during
legal proceedings (art.91, paragraph2 Law on Banks).
200. The Albanian authorities clarified that the above mentioned provision, specifically the wording referring to to juridical authorities whose right
derives from the law, together with Article62 of the LTP which provide the
obligation for banks to give information to the GTD (as described in B.1.1),
impose an obligation to disclose information to the GTD. Moreover, it clarified that no court procedure is needed for the GTD in order to exercise their
access powers to collect banking and financial information. The definition of
juridical authorities is provided in the Civil Code. Public Juridical Persons
includes any administrative body provided for in the current legislation with
regard to the administrative procedures, law making, judicial and prosecution bodies of every level, local governance units bodies of every level, state
authorities and public entities, established by Constitution, law or decisions of
the Council of Ministers (arts.24 and 25 Civil Code of Albania). Therefore,
this definition would include the GTD, which has specific powers under the
LTP to access bank information.
201. In conclusion, the Law on Banks and the LTP contains sufficiently
defined exceptions to bank secrecy to ensure that bank information can be
assessed for EOI purposes by the GTD. Enforcement measures are in place
in Albania if a bank refuses to provide information to the GTD (arts.126 and
129 LTP).
202. In practice, during the review period Albania was not requested to
collect information from a bank to reply to EOI requests. Banking information that had been included in tax returns had been accessed and provide in
reply to an EOI request. The GTD has confirmed that it was able to obtain
banking information for its domestic tax investigations/audit exercises and

does not envisage any difficulty in obtaining banking information should
there be an EOI request for banking information. There was also no negative
peer input on this aspect.
Professional secrecy and attorney-client privilege

203. The international standard recognises that a requested State may
decline to disclose information relating to confidential communications
between attorneys, solicitors or other admitted legal representatives in their
role as such and their clients to the extent that the communications are protected from disclosure under domestic law (Commentary 19.3 to the OECD
Model Tax Convention). However, the scope of protection afforded to such
confidential communications should be narrowly defined. Such protection
does not attach to documents or record delivered to an attorney, solicitor or
other admitted legal representative in an attempt to protect such documents
or records from disclosure required by law. Also, information on the identity
of a person such as a director or beneficial owner of a company is typically
not protected as confidential communication.
204. Information obtained in connection with providing legal assistance is
protected under the Albanian Advocacy Law to the extent a lawyer is acting
in his/her full capacity as a lawyer. Article9 of the Advocacy Law states that
lawyers are prohibited from disclosing information brought to his attention
by the person he represents or defends or by the documents that this person
provided in the frame of his defence, except for cases authorised by the client
in writing. Therefore, an attorney cannot reveal information or confidences,
unless he has received a written authorisation from the client, even in the case
information has been requested by government authorities.
205. Advocacy Law restricts the lawyers to provide legal assistance only
through:

legal advising on different issues;
preparing pleadings or other requests during criminal proceedings,

as well as appeals, recourses against court decisions, prosecution
decisions, in arbitration or in other public administration institutions;
preparing requests forwarded to the Appeal Court, to the Constitutional

Court, to International Courts and to any other organisation in which
the Republic of Albania adheres;
preparing complaints and requests from individuals or legal entities;
compiling acts attested by a notary public;

drafting contracts and agreements, as well as any other documents

that have or are intended to have legal force;
participating as a defender during the accompaniment, the detention,

the arrest during the investigation period, judicial examination of the
persons in criminal cases (art.2).
206. Albanian authorities have confirmed that Article9 ultimately provides that where a lawyer acts in any other capacity other than as a lawyer
(e.g.as a nominee shareholder, a trustee, a company director), the attorneyclient privilege does not apply in Albania. The scope of the professional
secrecy only covers documents that a person provides in the framework of
his defence. In this sense, for instance, a contract drafted by a lawyer that
is not for use in the framework of a clients defence would not be subject
to privilege. Information protected under privilege does not include purely
factual information such as the identity of a director or beneficial owner of
a company. Therefore, the activities of lawyers covered by the professional
secrecy are restricted and thus the scope of the attorney-client privilege does
not go beyond the international standard.
207. Professional privilege in Albania is also applicable to other professionals, including notaries and tax advisors (arts.34 Law on Statutory Audit
and art.63 LTP). Regarding the professional secrecy and confidentiality rules
applicable to statutory accountants, Article34 of Law on Statutory Audit
provides that all the information and documents to which a statutory auditor or audit firm has access when carrying out a statutory audit is protected
by confidentiality and professional secrecy. Notwithstanding the above,
the secrecy provision mentioned above does not restrict the tax authorities
access powers, as the LTP expressly grants powers to the GTD to request oral
or written information from third parties concerning the tax liability of a taxpayer with whom they have entered into commercial or financial transactions
and to whom they provide services. This provision would therefore include
statutory accountants, tax advisors and notaries (see sectionB.1.1).
208. The phase 1 report highlighted that a provision is contained under the
LTP for notaries and tax advisors allowing them to refuse to give information
in the case of a criminal tax investigation by the prosecutors office to the
extent they have obtained such information in the course of their professional
activities (art.63 LTP). It is not clear how this provision would apply in the
context of exchange of information for tax purposes. More specifically, it is
unclear if notaries and tax advisors would be required to disclose information to the GTD in case of exchange of information for criminal tax matters.
It is recommended that Albania clarify this matter and ensure that domestic
provisions on professional privileges allow exchange of information in line
with the standard.
In practice
209. With regard to the above observation on whether notaries and tax
advisors would be required to disclose information to the GTD in case of
exchange of information for criminal tax matters (provided for under art.63
of LTP), the Albanian authorities have clarified that this will not be an impediment to effective EOI because of the following reasons:

Firstly, the term criminal tax investigation in art.63 of LTP refer to

a domestic criminal investigation within Albania and foreign criminal tax investigations will not be covered under this article.
Secondly, the LTP has specifically been amended in 2014 with a new
inclusion of art.61/1 which gives the GTD powers to request from
any person any information that may be required under international
agreements (including DTCs, tax information exchange agreements
TIEAs and the Multilateral Convention) that have entered into force
in Albania.
Furthermore, terms in the international agreements will prevail over

domestic law (art.61/1 LTP). As professional privilege provided
under art 63 of LTP will not apply in the context of EOI, the phase 1
recommendation is removed.
Conclusion
210. The Albanian competent authority has broad access powers to obtain
and provide information requested for EOI held by persons within its territorial jurisdiction, including information held by third parties. All information
gathering powers that exist for domestic purposes can be used for EOI
purposes regardless whether there is a domestic tax interest. However, as
legislation and regulations explicitly providing for access powers to collect
information for EOI purposes have entered into force after the review period,
they could not be tested in practice. It is recommended that Albania monitor
the application of the new legislation and regulations to ensure that they allow
for effective EOI. Albania has in place enforcement provisions to compel
the production of information, including criminal sanctions. In practice, the
Albanian authorities confirmed that there was no case whether the request
for information was for EOI purpose or domestic tax investigation when
professional secrecy had any influence or formed a problem for the execution
of the provisions in the tax laws.

Phase2 rating
Largely Compliant
Factors underlying
recommendations
Albania has introduced legislation
and regulations to explicitly provide
for access powers for collecting
information for EOI and the
procedures to be followed in those
instances. These provisions became
effective after the review period and,
therefore, could not be tested.
Recommendations
Albania is recommended to monitor
the effectiveness of the access
powers provided under Article61/1
of the Law on Tax Practices and
Instruction 15/2015 of the Ministry of
Finance for purposes of exchange of
information with its treaty partners.
B.2. Notification requirements and rights and safeguards

The rights and safeguards (e.g.notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.
Not unduly prevent or delay exchange of information (ToRB.2.1)

211. Rights and safeguards should not unduly prevent or delay effective exchange of information. For instance, notification rules should permit
exceptions from notification of the taxpayer concerned prior to the exchange
of information requested (e.g.in cases in which the information request is of
a very urgent nature or the notification is likely to undermine the chance of
success of the investigation conducted by the requesting jurisdiction).
212. There are no explicit provisions in the Albanian tax laws that oblige
the GTD to inform a person subject of an EOI request of the existence of
such request or to notify this person prior contacting third parties to obtain
information. However, the GTD is required to notify the taxpayer of any
administrative act, or of any action or omission, made for collection of tax
liabilities against a taxpayers property, except when the tax administration
considers that there is a real danger that, after receiving the notice, the taxpayer will transfer property and jeopardise the tax assessment (art.32, LTP).
Albanian authorities have confirmed that the right under Article32 to receive
notice of any administrative act, or of any action or omission for collection
of tax liabilities against a taxpayers property, does not apply in the context
of obtaining and providing information in relation to an EOI request and that
such notification does not occurs in practice. Albanias Ministry of Finance
has recently enacted a regulation on the collection of information for EOI
(Instruction No.15 of 18May 2015) and no notification is provided under
such regulation.
In practice
213. Albanian authorities have confirmed that there was no case of taxpayers appealing against request for information. Neither did their peers
submit negative inputs on this aspect. In addition, Albanian authorities have
confirmed that they did not notify any taxpayer regarding any EOI requests
and the collection of information from other agencies during the review
period.
Phase2 rating
Compliant.
Compliance with the Standards: Exchanging information 77
C. Exchanging information
Overview
214. Jurisdictions generally cannot exchange information for tax purposes
unless they have a legal basis or mechanism for doing so. In Albania, the
legal authority to exchange information is derived from double taxation conventions (DTCs), and the Multilateral Convention. This section of the report
examines whether Albania has a network of information exchange that would
allow it to achieve effective exchange of information in practice.
215. To date, Albania has in total 102EOI relationships. These relationships are based on bilateral DTCs and the Multilateral Convention. Albania
has concluded 40DTCs. Thirty-five of these agreements are in force. Albania
signed the Multilateral Convention on 1March 2013 and brought it into force
on 1December 2013. The great majority of Albanias EOI agreements meet
the international standard. Therefore, elementC.1 was found to be in place
and compliant.
216. Albanias EOI network covers its main trading partners, all OECD
Members and all G20 countries. During the course of the assessment, no
jurisdiction advised that Albania had refused to enter into negotiations
or conclude an EOI agreement. ElementC.2 was found to be in place and
compliant.
217. All Albanias agreements have confidentiality provisions to ensure
that the information exchanged will be disclosed only to persons authorised
by the agreements. In addition, all of Albanias DTCs ensure that the parties are not obliged to provide information that would disclose any trade,
business, industrial, commercial or professional secret or information the
disclosure of which would be contrary to public policy. ElementsC.3 and C.4
were found to be in place and compliant.
218. With respect to the timeliness of responses to EOI, there are no legal
restrictions on the ability of Albanias competent authority to respond to
requests within 90days of receipt by providing the information requested
or by providing an update on the status of the request. Over the review
78 Compliance with the Standards: Exchanging information

period, Albania received 16EOI requests, of which full responses were provided within 90days for 15 of the requests, and the remaining request was
answered within a year. Peers were satisfied with the EOI assistance provided
by Albania and no issue was raised.
219. The majority of Albanias tax treaties have included the GTD as the
competent authority to collect information and reply to an EOI request. For
the few treaties where the competent authority is the Minister of Finance
(or his authorised person), the Minister of Finance has authorised in written
form to delegate the authority to the GTD as the competent authority for EOI
purposes.
220. The Tax Treaties Unit is in charge of the EOI function within the
GTD and it was observed that the Tax Treaties Unit had a shortage of manpower to manage its diverse portfolio, which includes treaty negotiations,
treaty interpretation and granting of treaty benefits in addition to EOI during
the period under review. Moreover, there were gaps in organisational processes and there was not tracking of EOI requests, no EOI manual or training
to guide staff handling EOI requests. Whilst Albania managed to respond
to the majority of incoming EOI requests in a timely manner, it did not keep
records of its EOI work and statistics in this regard have only been developed very recently. It is recommended that Albania ensure that appropriate
organisational processes and resources are put in place so that requests are
responded in a timely manner in all cases. Peers were generally satisfied with
the EOI assistance provided by Albania and no issue was raised. Element C5
is rated largely compliant.
C.1. Exchange of information mechanisms

Exchange of information mechanisms should allow for effective exchange of information.
221. All international treaties providing for EOI require ratification by the
Assembly of the Republic of Albania to become part of the laws of Albania.
In regard to the hierarchy of the laws, the LTP provides that a ratified international treaty prevails over domestic tax laws (art.3).
222. Albania has an extensive EOI network covering 102jurisdictions
through 40DTCs9, and the Multilateral Convention. Of the 40DTCs signed
by Albania, 35 are in force. Four of the other five agreements have been
ratified by the Albanian Parliament. The Multilateral Convention updates
9.
A DTC signed with Switzerland in 1999 does not contain any provision that allows
these jurisdictions to exchange information and will not be considered for the
purpose of this report. Albania recently concluded the renegotiation of this treaty.
It is also noted that Switzerland is a signatory to the Multilateral Convention.
24 of Albanias EOI agreements10, five of them which either were not to the
standard11 or not yet in force12; it also provides 62 new EOI relationships13 for
Albania. Albania has also initialled a further 2 double tax conventions (DTC)
with Oman and Saudi Arabia.
223. The competent authority under Albanias EOIs instruments is the
Albanian Minister of Finance or his authorised representative. The Ministry
of Finance delegated the competent authority role to the GTD.
Foreseeably relevant standard (ToRC.1.1)

224. The international standard for exchange of information envisages
information exchange upon request to the widest possible extent, but does not
allow fishing expeditions, i.e.speculative requests for information that have
no apparent nexus to an open inquiry or investigation. The balance between
these two competing considerations is captured in the standard of foreseeable relevance which is included in Article26(1) of the OECD Model Tax
Convention and Article1 of the OECD Model TIEA.
10.
11.
12.
13.
Austria, Belgium, Croatia, Czech Republic, Estonia, France, Greece, Hungary,

India, Ireland, Italy, Korea, Latvia, Luxembourg, Malta, Moldova, Norway,
Netherlands, Poland, Romania, Slovenia, Spain, Sweden, and United Kingdom.
Austria, Latvia and Luxembourg.
Estonia, India and Luxembourg.
Andorra, Anguilla, Argentina, Aruba, Australia, Azerbaijan, Barbados, Belize,
Bermuda, Brazil, British Virgin Islands, Cameroon, Canada, Cayman Islands,
Chile, Colombia, Costa Rica, Curaao, Cyprus*, Denmark, El Salvador, Faroe
Islands, Finland, Gabon, Georgia, Ghana, Gibraltar, Greenland, Guatemala,
Guernsey, Iceland, Indonesia, Isle of Man, Isreal, Japan, Jersey, Kazakhstan,
Kenya, Liechtenstein, Lithuania, Mauritius, Mexico, Monaco, Montserrat,
New Zealand, Nigeria, Niue, Philippines, Portugal, San Marino, Saudi Arabia,
Senegal, Seychelles, Sint Maarten, Slovak Republic, South Africa, Switzerland,
Tunisia, Turks and Caicos Islands, Uganda, Ukraine and United States.
*Footnote by Turkey: The information in this document with reference to
Cyprus relates to the southern part of the Island. There is no single authority
representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and
equitable solution is found within the context of United Nations, Turkey shall
preserve its position concerning the Cyprus issue.
Footnote by all the European Union Member States of the OECD and the European
Union: The Republic of Cyprus is recognised by all members of the United Nations
with the exception of Turkey. The information in this document relates to the area
under the effective control of the Government of the Republic of Cyprus.

The competent authorities of the contracting states shall exchange
such information as is foreseeably relevant to the carrying out the
provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and
description imposed on behalf of the contracting states or their
political subdivisions or local authorities in so far as the taxation
thereunder is not contrary to the Convention. The exchange of
information is not restricted by Articles1 and 2.
225. All Albanias DTCs provide for exchange of information that is
foreseeably relevant, necessary or relevant to the administration and
enforcement of the domestic laws of the contracting parties concerning taxes
covered in the DTCs. This scope is set out in the EOI article in the relevant
DTCs and is consistent with the international standard. The OECD Model
Tax Convention on Income and on Capital recognises in its commentary to
Article26 (Exchange of Information) that the terms necessary and relevant allow the same scope of exchange of information as does the term
foreseeably relevant. Article4 of Regulation No.6, dated 10February 2004
on tax Treaties specifies that the interpretative basis for applying tax treaties
in Albania is the OECD Commentary.
226. Albanias DTC with Malaysia is specifically limited to exchange of
information for purposes of the convention or for the prevention or detection
of evasion or avoidance of taxes covered by the convention. The language in
this agreement is sufficiently broad to meet the foreseeably relevant standard.
227. During the period under review, the Albanian competent authority
reports having received no requests which raised doubts in terms of their
foreseeable relevance. Albania has not declined to reply a request on the
basis that it was not foreseeably relevant and asked no clarification from its
treaty partners in this regard. No issues have been raised by peer input on
this aspect either.
In respect of all persons (ToRC.1.2)

228. For exchange of information to be effective it is necessary that a jurisdictions obligation to provide information is not restricted by the residence or
nationality of the person to whom the information relates or by the residence or
nationality of the person in possession or control of the information requested.
For this reason, the international standard envisages that exchange of information mechanisms will provide for exchange of information in respect of all
persons and paragraph1 of Article26 of the Model Tax Convention indicates
that The exchange of information is not restricted by Article1 that defines
the personal scope of application of the Convention (DTCs apply to persons
who are residents of one or both of the Contracting States).
229. Of Albanias DTCs, 37 specifically provide for exchange of information in respect of all persons. The scope of the DTCs signed with
Luxembourg, Malaysia and Turkey is limited to persons covered by the
Agreement. However, two of them, the DTC with Luxembourg and Turkey,
provide for the exchange of information as is necessary for carrying out the
provisions of the domestic laws of the Contracting States concerning taxes
covered by the Agreement. To the extent that domestic laws are applicable
to residents and non-residents, information under these agreements can also
be exchanged in respect of all persons, including non-residents. The same
rationale applies to Albanias DTC with Malaysia, which provides that it shall
apply to exchange of information for purposes of prevention or detection of
evasion or avoidance of taxes covered by the convention. As domestic laws
concerning prevention or detection of evasion or avoidance of taxes covered
by the convention are applicable to residents and non-residents equally, it
can be stated that even in absence of reference to Article1 of the OECD
Model Convention, the contracting states are under obligations to exchange
information in respect of all persons.
Obligation to exchange all types of information (ToRC.1.3)

230. Jurisdictions cannot engage in effective exchange of information if
they cannot exchange information held by financial institutions, nominees
or persons acting in an agency or a fiduciary capacity. The OECD Model
Tax Convention and the Model TIEA, which are authoritative sources of the
standards, stipulate that bank secrecy cannot form the basis for declining a
request to provide information and that a request for information cannot be
declined solely because the information is held by nominees or persons acting
in an agency or fiduciary capacity or because the information relates to an
ownership interest.
231. Out of Albanias 40DTCs, nine14 contain language akin to the
Article26(5) of the OECD Model Tax Convention providing for the obligation of the contracting parties to exchange information held by financial
institutions, nominees, agents and ownership and identity information.
232. For the remaining 31DTCs that do not contain language akin to
Article26(5) of the OECD Model Tax Convention, 23 out of these jurisdictions15 will be covered by the Multilateral Convention, as it contains a
provision similar to Article5(4) of the OECD Model TIEA, which ensures
14.
Estonia, Germany, India, Ireland, Morocco, Singapore, Spain, United Kingdom

and United Arab Emirates.
15. Austria, Belgium, Bulgaria, China, Croatia, Czech Republic, France, Greece,
Hungary, Italy, Korea, Latvia, Luxembourg, Malta, Moldova, Netherlands,
Norway, Poland, Romania, Russia, Slovenia, Sweden and Turkey.

that the requested jurisdiction shall not decline to supply the information
requested solely because it is held by a financial institution, nominee or
person acting in an agency or a fiduciary capacity, or because it relates to
ownership interests in a person.
233. The above leaves eight jurisdictions16 with which Albania has not
signed a bilateral or multilateral agreement that includes language akin to
Article26(5). However, the absence of this language does not automatically create restrictions on exchange of bank information. The commentary
to Article26(5) indicates that while paragraph5, added to the Model Tax
Convention in 2005, represents a change in the structure of the Article,
it should not be interpreted as suggesting that the previous version of the
Article did not authorise the exchange of such information. Albanias domestic laws allow access to information referred to in Article26(5) even in the
absence of such a provision in the DTC. However, EOI will be subject to reciprocity17 and there may be domestic limitations in place in the laws of some
of these partners18. Therefore, it is recommended that Albania continue its
programme of renegotiating its older treaties in order to incorporate wording
in line with Article26(5) of the OECD Model Tax Convention.
234. In practice, with regard to the eight jurisdictions (Bosnia and
Herzegovina, Egypt, Kuwait, FYROM, Malaysia, Montenegro, Serbia and
Kosovo) with which Albania has not signed a bilateral/multilateral agreement that includes language akin to Articles26 (5), Albania updated that
these jurisdictions do not have significant economic relations with Albania.
However, Albania further explained that they would not have issue with
(i) exchanging all types of information (including bank information, or
information that is held by nominees or persons acting in an agency or fiduciary capacity or because the information relates to ownership interest) and
(ii)there are no domestic interest restrictions, should any of these eight treaty
partners were to send an EOI request to Albania. To this end, Albania is in
the process of using diplomatic channels to exchange notes to propose that
Article26 of the existing tax treaties with these eight jurisdictions be interpreted to the international standard.
16. Bosnia and Herzegovina, Egypt, Kuwait, Former Yugoslav Republic of
Macedonia (FYROM), Malaysia, Montenegro, Serbia, and Kosovo.
17. The principle of reciprocity is contained under the LTP. Accordingly, Article87
provides that: The foreign assistance is requested based on valid bilateral or
multilateral tax agreements. In the absence of such an agreement, assistance is
requested based on the principles of reciprocity.
18. Two of the eight jurisdictions with DTCs that do not include Article26(5) have
already been reviewed by the Global Forum (FYROM and Malaysia). No relevant
limitations have been identified within the legislation of these jurisdictions.
Absence of domestic tax interest (ToRC.1.4)

235. The concept of domestic tax interest describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes. An
inability to provide information based on a domestic tax interest requirement
is not consistent with the international standard. Contracting parties must use
their information gathering measures even though invoked solely to obtain
and provide information to the other contracting party.
236. Out of Albanias 40DTCs, nine19 contain provisions similar to
Article26(4) of the OECD Model Tax Convention, which oblige the contracting parties to use their information gathering measures to obtain and provide
information to the requesting jurisdiction even in cases where the requested
party does not have a domestic interest in the requested information.
237. There are no domestic tax interest restrictions on Albanias powers
to access information for EOI purposes (see SectionB above). As such,
the exchange of information in the absence of domestic interest in respect
of the 31DTCs will be subject to reciprocity and will depend on the
domestic limitations (if any) in the laws of some of these partners. Out of
these 31jurisdictions 23jurisdictions20 are signatories of the Multilateral
Convention. Therefore the wording of DTCs may be a concern in practice in
respect of the remaining eight jurisdictions21.
238. In practice, with regard to the eight jurisdictions (Bosnia and
Herzegovina, Egypt, Kuwait, FYROM, Malaysia, Montenegro, Serbia and
Kosovo) with which Albania has not signed a bilateral/multilateral agreement
that includes language akin to Articles26 (4), Albania updated that these
jurisdictions do not have significant economic relations with Albania, and
they were not on Albanias priority list to renegotiate the treaties to include
Articles26 (4). However, Albania explained that they would not have issue
with (i) exchanging all types of information (including bank information,
or information that is held by nominees or persons acting in an agency or
19.
These DTCs are with Estonia, Germany, India, Ireland, Morocco, Singapore,
Spain, United Kingdom and the United Arab Emirates.
20. These jurisdictions are Austria, Belgium, Bulgaria, China, Croatia, Czech
Republic, France, Greece, Hungary, Italy, Korea, Latvia, Luxembourg, Malta,
Moldova, Netherlands, Norway, Poland, Romania, Russia, Slovenia, Sweden and
Turkey.
21. Of the eight jurisdictions that are not covered by the Multilateral Convention
(Bosnia and Herzegovina, Egypt, Kuwait, FYROM, Malaysia, Montenegro,
Serbia and Kosovo), two of them have already been reviewed by the Global
Forum (FYROM and Malaysia). No relevant limitations have been identified
within the legislation of these jurisdictions.

fiduciary capacity or because the information relates to ownership interest)
and (ii)there are no domestic interest restrictions, should any of these eight
treaty partners were to send an EOI request to Albania. To this end, Albania
is in the process of using diplomatic channels to exchange notes to propose
that Article26 of the existing tax treaties with these eight jurisdictions be
interpreted to the international standard.
Absence of dual criminality principles (ToRC.1.5)

239. The principle of dual criminality provides that assistance can only be
provided if the conduct being investigated (and giving rise to an information
request) would constitute a crime under the laws of the requested jurisdiction if it had occurred in the requested jurisdiction. In order to be effective,
exchange of information should not be constrained by the application of the
dual criminality principle.
240. There are no such limiting provisions in any of Albanias EOI instruments which would indicate that there is dual criminality principle to be
applied. Accordingly, there has been no case when Albania declined a request
because of criminal tax matters as has been confirmed by peers.
Exchange of information in both civil and criminal tax matters

(ToRC.1.6)
241. Information exchange may be requested both for tax administration
purposes and for tax prosecution purposes. The international standard is not
limited to information exchange in criminal tax matters but extends to information requested for tax administration purposes (also referred to as civil
tax matters).
242. All of Albanias EOI instruments provide for exchange of information in both civil and criminal tax matters. In practice, the processes involved
in the collection of information are the same regardless of whether the request
relates to a civil or criminal investigation. None of Albanias peers have
raised any issue in this respect.
Provide information in specific form requested (ToRC.1.7)

243. In some cases, a contracting party may need to receive information in
a particular form to satisfy its evidentiary or other legal requirements. Such
formats may include depositions of witnesses and authenticated copies of
original records. Contracting parties should endeavour as far as possible to
accommodate such requests. The requested party may decline to provide the
information in the specific form requested if, for instance, the requested form
is not known or permitted under its law administrative practice. A refusal to
provide the information in the form requested does not affect the obligation
to provide the information.
244. There are no restrictions in Albanias EOI instruments that would
prevent it from providing information in a specific form, so long as this is
consistent with its own administrative practices. Peer input indicate that
Albania provides the requested information in adequate form and no issue in
this respect has been reported.
In force (ToRC.1.8)
245. Exchange of information cannot take place unless a jurisdiction has
exchange of information arrangements in force. The international standard
requires that jurisdictions must take all steps necessary to bring agreements
that have been signed into force expeditiously.
246. Albania has entered into 40DTC of which 35 are in force. Four of
the other five agreements22 have been ratified by the Albanian Parliament
but are not yet in force. Generally, the time taken between the signature of a
DTC arrangement and its ratification by Albania is less than one year. There
were no issues raised by peers on the length to which the EOI agreements are
brought into force in Albania.
247. Albania became signatory of the Multilateral Convention in March
2013 and brought it into force in December of the same year.
Be given effect through domestic law (ToRC.1.9)

248. For information exchange to be effective, the contracting parties must
enact any legislation necessary to comply with the terms of the agreement.
As discussed in section B, Albania has the legislative and regulatory framework in place to give effect to its agreements. In practice, there were no cases
during the period under review where Albania was not able to enact legislation to give effect to its exchange of information agreements.
Phase2 rating
Compliant.
22.
Estonia (2010), India (2013), Luxembourg (2009) and United Arabs Emirates (2014).
C.2. Exchange of information mechanisms with all relevant partners

The jurisdictions network of information exchange mechanisms should cover
all relevant partners.
249. Ultimately, the international standard requires that jurisdictions

exchange information with all relevant partners, meaning those partners who are
interested in entering into an information exchange arrangement. Agreements
cannot be concluded only with counterparties without economic significance. If
it appears that a jurisdiction is refusing to enter into agreements or negotiations
with partners, in particular ones that have a reasonable expectation of requiring
information from that jurisdiction in order to properly administer and enforce
its tax laws it may indicate a lack of commitment to implement the standards.
250. Albania has an extensive EOI network covering 102jurisdictions
through 40DTCs and the Multilateral Convention. Albanias EOI network
covers all of its significant partners including its main trading partners, all
OECD Members and all G20 countries. Albanias main trading partners are
EU member states and Russia.
251. Albania has also initialled a further two DTCs with Oman and Saudi
Arabia.
252. Ultimately, the international standard requires jurisdictions to
exchange information with their relevant partners, meaning those partners
who are interested in entering into an exchange of information agreement.
During the course of the assessment, no jurisdiction has advised that Albania
had refused to enter into negotiations or conclude an EOI agreement.
253. Albanian authorities have indicated that Albania is always willing to
negotiate EOI agreements and has never declined any request to negotiate an
EOI agreement. Comments were sought from the jurisdictions participating
in the Global Forum in the course of the preparation of this report, and no
jurisdiction advised the assessment team that Albania had refused to negotiate or conclude an EOI agreement with it.
Factors underlying
recommendations
Recommendations
Albania should continue to develop
its exchange of information network
with all relevant partners.
Phase2 rating
Compliant.
C.3. Confidentiality
The jurisdictions mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received.
Information received: disclosure, use, and safeguards (ToRC.3.1)

254. Governments would not engage in information exchange without the
assurance that the information provided would only be used for the purposes
permitted under the exchange mechanism and that its confidentiality would
be preserved. Information exchange instruments must therefore contain confidentiality provisions that spell out specifically to whom the information can be
disclosed and the purposes for which the information can be used. In addition
to the protections afforded by the confidentiality provisions of information
exchange instruments, jurisdictions with tax systems generally impose strict
confidentiality requirements on information collected for tax purposes.
International treaties
255. All Albanias EOI agreements have confidentiality provisions to
ensure that the information exchanged will be disclosed only to persons
authorised by the agreements. While a few of the EOI articles in the Albanian
DTCs might vary slightly in wording, these provisions contain all of the
essential aspects of Article26(2) of the OECD Model Tax Convention.
Confidentiality of the information exchanged in line with the standard is also
provided for in Article22 of the Multilateral Convention.
256. The DTC with the Netherlands specifically allows for provision of
the exchanged information to the arbitration board established for the purposes of carrying out a mutual agreement procedure under the DTC, if such
information as is necessary for carrying out the arbitration procedure.
Albanias domestic law

257. Under the Albania LTP, a taxpayer has the right to confidentiality of
his/her tax and financial information held by the tax administration including
any information provided by taxpayers or third parties to the tax administration in the course of its activity (art.31 LTP). Moreover, a civil servant of
the tax administration is prohibited from disclosing any information on the
taxpayer which the civil servant became aware of in the course of carrying

out his/her statutory duties without obtaining the taxpayers consent (art.25(1)
LTP). Administrative and criminal sanctions apply if information is disclosed
in breach of the LTP (arts 22 and 131(g) LTP). There are a few exceptions
which allow information to be made public. These exceptions refer to taxes,
in relation to which collection procedures have commenced and in cases
where a taxpayer waives the right to confidentiality in writing, and in accordance with the specific terms of his/her waiver (art.25(4) LTP). As discussed
in B.1, Article61/1 allows the GTD to exchange information with the foreign
authorities, as provided for in international treaties and agreements.
258. Albanian Tax Law contains clear provisions to ensure that information obtained in the course of the exchange of information under the
instruments Albania has in force will be kept confidential. Article61/1 and
Article25(5) of LTP provides that the same confidentiality rules as for the
information relevant for domestic tax purposes shall apply for international
EOI, unless provided otherwise in the international agreement under which
the information is requested. The scope of these provisions is extended to all
institutions and individuals involved in the exchange of information. Under
Article87 of Tax Procedures Law is stated that the GTD may request the
assistance of a foreign tax authority for the resolution of specific tax issues
based on valid bilateral or multilateral tax agreement or based on the principles of reciprocity and under the conditions the information given will be
subject to the confidentiality rules under the LTP Law.
All other information exchanged (ToRC.3.2)

259. The confidentiality provisions in Albanias exchange of information
instruments and domestic law do not draw a distinction between information
received in response to requests and information forming part of the requests
themselves. As such, these provisions apply equally to all requests for such
information, background documents to such requests, and any other document reflecting such information, including communications between the
requesting and requested jurisdictions and communications within the tax
authorities of either jurisdiction.
Confidentiality of EOI requests in practice

260. The GTD implemented a new information technology (IT) system
within the organisation in January 2015. Access rights to the IT system are
granted to GTD staff based on the individuals job scope. GTD staff had to
make a personal declaration to maintain the confidentiality of taxpayers tax
and financial information they receive in the course of their duties when they
join the organisation. The obligation of confidentiality continues even after
tax officers cease to be employed by the tax administration. New tax officers
have to undergo training on the confidentiality rule. The training offered to

new tax officers in the GTD focused on the maintaining the confidentiality
of taxpayers tax and financial information they receive in the course of their
duties when they join the organisation, it is not specific to the job scope of
EOI only.
261. In addition, with regard to sharing taxpayer information with other
government agencies, the GTD confirmed that only granular tax statistics are
shared and detailed individual taxpayer information would not be shared with
other government agencies.
262. EOI requests received from the requesting jurisdiction are handled
only by the Tax Treaty Unit within the GTD, and there is no reported case of
violation of access rights or breach of confidentiality of information on the
EOI request. In addition, once the EOI case is closed all hardcopy documents
relating to the case would be sent to GTDs central registry for archival and
access to the EOI files is restricted. The GTD explained that access to closed
EOI files would require authorisation from the Technical Director of the GTD.
Phase2 rating
Compliant.
C.4. Rights and safeguards of taxpayers and third parties

The exchange of information mechanisms should respect the rights and
safeguards of taxpayers and third parties.
Exceptions to requirement to provide information (ToRC.4.1)

263. The international standard allows requested parties not to supply
information in response to a request in certain identified situations where an
issue of trade, business or other secret may arise.
264. All Albanias DTCs stipulate that a Contracting State is not obliged
to supply information which would disclose any trade, business, industrial,
commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy and therefore respect the
rights and safeguards of taxpayers and third parties.

265. Communications between a client and an attorney or other admitted
legal representative are only privileged to the extent that the attorney or other
legal representative acts in his or her capacity as an attorney or other legal
representative. Where legal professional privilege is broadly defined it does
not provide valid grounds on which to decline a request for EOI. To the extent,
therefore, that an attorney acts in another capacity, such as a nominee shareholder, a trustee, a settlor, a company director, EOI resulting from and relating
to any such activity cannot be declined because of legal professional privilege.
266. In practice, there was no case during the period under review where
Albania requested information from admitted legal representatives for
exchange of information purposes. Consequently, there was no case where
professional privilege has been claimed to cover the requested information.
Albania also did not decline to provide any requested information during the
period under review because it is covered by legal professional privilege or
any other professional secret and no peer indicated any issue in this respect.
Phase2 rating
Compliant.
C.5. Timeliness of responses to requests for information

The jurisdiction should provide information under its network of agreements
in a timely manner.
Responses within 90days (ToRC.5.1)

267. In order for exchange of information to be effective, it needs to be
provided in a timeframe which allows tax authorities to apply the information
to the relevant cases. If a response is provided but only after a significant lapse
of time, the information may no longer be of use to the requesting authorities.
This is particularly important in the context of international co-operation as
cases in this area must be of sufficient importance to warrant making a request.
268. There appear to be no legal restrictions on the Albanian competent
authoritys ability to respond to EOI requests in a timely manner.
269. During the review period (from 1January 2012 to 31December
2014), a total of 16requests for information were received by Albania.
Albania was generally able to reply to EOI requests in a timely manner.

Albania provided full replies for 15 of the requests within 90days, and took
less than a year to reply the remaining request. In relation to the one request
that took more than 90days to be replied, Albania did not provide a status
update to its partner. Albania is recommended to ensure that status updates
are provided to EOI partners within 90days when it is unable to provide a
substantive response within that time.
270. All of the information requested during the review period is available within the GTD and the Albanian authorities did not have to approach
the taxpayer or third parties to gather the requested information. Most EOI
requests which Albania received during the review period were relatively
straight-forward and were related to taxpayers income declared in Albania,
taxpayer data in Albania or information on the tax residency of a taxpayer.
271. Peer inputs on the EOI assistance provided by Albania were positive.
Three peers provided peer input to the review. Two of them indicated that
requests were responded within 90 or 180days. The third peer that provided
input did not indicate any specific timelines where responses were provided
but did indicate that it was satisfied with the timeliness of Albanias response.
It is noted that the method for counting the number of EOI requests may
differ between Albania23 and its peers.
272. The following table shows the time taken to send the final response
to incoming EOI requests:
Responses times for requests sent to Albania during the three-year review period
2012
Total number of requests received
(a+b+c+d+e)
Full Response: < 90days

< 180days (cumulative)
< 1year (cumulative)
(a)
> 1year (cumulative)
(b)
Declined for valid reasons
2013
2014
Total Average
Num.
Num.
Num.
Num.
100%
100%
100% 16
100%
80%
100%
100% 15
94%
0%
0%
0%
0%
20%
0%
0%
6%
0%
0%
0%
0%
0%
0%
0%
0%
Failure to obtain and provide information requested (d)
0%
0%
0%
0%
Requests still pending (e)
0%
0%
0%
0%
23. Albania considers one EOI request letter as one request. While at least one of
Albanias peers indicated that their method of counting the number of EOI requests
sent to Albania was based on the number of subjects involved in an investigation.
Organisational process and resources (ToRC.5.2)

273. It is important that a jurisdiction has appropriate organisational processes and resources in place to ensure a timely response.
274. The EOI function within the GTD is handled by the Tax Treaties
Unit, which comprises of a Head of unit managing the overall workload for
the team and five specialists. The Tax Treaties Unit has a diverse portfolio
which, besides handling inbound EOI requests, includes the interpretation of
tax treaties for requests to claim treaty benefit such as lower withholding tax
rates, direct taxes and national social contributions. It is observed that over
the review period, the Tax Treaties Unit has had a shortage of manpower to
manage its large portfolio. Furthermore, staff in the Tax Treaties Unit did not
attend any specific training on EOI work, nor was there a formal in-house
EOI manual to guide staff on the steps and processes for handling incoming
EOI requests.
275. Albanian authorities did however clarify that there are internal GTD
guidelines for case officers handling EOI requests on the timelines for replying to EOI requests, as follows:

if the requested information is available within GTD office in Tirana,

the EOI request will be processed and the EOI reply to the Foreign
Competent Authority will be sent within 15 to 20days of receipt of
the EOI request letter.
If the requested information is available from GTD regional offices

outside Tirana, or from third parties, the EOI request will be processed and the EOI reply to the Foreign Competent Authority will be
sent within 1 to 2months from the receipt of the EOI request letter.
276. Over the review period, the GTD did not have to approach third parties for information to relating to incoming EOI requests.
Handling of EOI requests

277. The process of handling inbound requests in the Tax Treaty Unit is
as follows:
i.
the request letter will be sent to GTD Protocol Office (as per all
correspondence to GTD) and a protocol number is assigned to the
document before the letter is forwarded to the General Directors
Office;
ii. the General Director channels the EOI request to the Head of Tax
Treaty Unit;
iii. the Head of unit sends to EOI request to specialist to gather information;
iv. the specialist reviews the request, ensures the request letter is from
the competent authority of treaty partner, and reviews the relevant
treaty to ensure that it is in force with the relevant EOI article;
v. the specialist retrieves information from GTD database. If information is maintained in another government agency, the Specialist
sends official letter to request for the information;
vi. once information is obtained, the EOI reply will be signed off by the
General Director. Two copies of the reply are prepared in English
and Albanian, and are sent to the requesting jurisdiction by registered mail;
vii. The official documents of the closed request are sent to Protocol
Office for record keeping.
278. Albanian authorities acknowledged there was no formal internal
organisation process to track EOI requests and no existing EOI manual during
the review period. In addition, due to a shortage of manpower, the resources
in the Tax Treaties Unit are at times overstretched. The position of Head of the
unit was vacant for six months in 2013, which could partly explain the lack of
proper record keeping of the workload of the team during the review period.
In addition, there was a rotation in staff members in the Tax Treaties Unit midway through the review period, and there was no formal training on EOI for
the staff members new to EOI work. At the on-site visit, the Albanian authorities shared that they are in the process of setting up an EOI manual, which will
be based on the Global Forum EOI Manual. Going forward as Albania implements automatic exchange of information, there is a possibility that future
incoming EOI requests may not be straight-forward cases with information
readily available within the GTD database (which was the case during the
review period). It is recommended that Albania build up the resources dedicated to the EOI function and improve its organisational processes to ensure
effective exchange of information.
279. Nevertheless, despite manpower constraints within the Tax Treaties
Unit of the GTD, peer inputs received were positive.
Absence of unreasonable, disproportionate, or unduly restrictive

conditions on exchange of information (ToRC.5.3)
280. Exchange of information assistance should not be subject to unreasonable, disproportionate, or unduly restrictive conditions. Other than those
matters identified earlier in this report, there are no further conditions that
appear to restrict effective exchange of information in Albania. There are no
legal or regulatory requirements in Albania that impose unreasonable, disproportionate or unduly restrictive conditions.

This element involves issues of practice that are assessed in the
Phase2 review. Accordingly no Phase1 determination has been made.
Phase2 rating
Largely Compliant
Factors underlying
recommendations
While Albanias responses to EOI
requests were generally provided
in a timely manner and peer inputs
confirms the positive EOI assistance
provided by Albania, there were
significant gaps in the organisational
processes of the competent authority
and human resources and relevant
EOI training appear to be insufficient
to ensure the effective exchange of
information on an ongoing basis.
Recommendations
appropriate organisational processes
and resources are put in place so that
requests continue to be responded in
a timely manner in all cases.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 95
Summary of determinations and factors

underlyingrecommendations
Overall Rating
LARGELY COMPLIANT
Determination
Factors underlying
recommendations
Recommendations
Jurisdictions should ensure that ownership and identity information for all relevant entities
and arrangements is available to their competent authorities (ToR A.1)
The element is in
place, but certain
aspects of the legal
implementation of
the element need
improvement.
Foreign companies with a

sufficient nexus to Albania
(e.g.being resident for
tax purposes) and foreign
partnerships that are carrying
on business in Albania or
having income, deductions
or credits for tax purposes
in Albania are not required
to maintain nor provide to
the authorities ownership
information in all cases.
Albania should ensure the

availability of ownership
information regarding to
foreign companies with
sufficient nexus to Albania and
foreign partnerships carrying
on business in Albania or
having income, deductions
or credits for tax purposes in
Albania in all cases.
Under the current legislation,

there is uncertainty whether
there are requirements on
companies that might have
issued bearer shares prior
to 2008 which obligate the
holders of any such shares
to comply with the ownership
registration mechanisms.

appropriate mechanisms are
in place to identify holders of
bearer shares issued under
the 1992 Law on Companies.
96 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
Determination
Phase2 Rating:
Partially Compliant
Factors underlying
recommendations
Over the review period, the
National Registration Centre
and Centre of Registration
of Shares did not have a
system of oversight in place to
monitor compliance with the
obligations to maintain and file
ownership information and it is
not apparent that sanctions for
non-compliance were enforced
in practice.
Recommendations
Albania is recommended to
improve its system of oversight
in order to ensure that updated
ownership information is being
maintained in respect of all
relevant entities.
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities
and arrangements (ToR A.2)
Phase2 Rating:
Largely Compliant
The General Taxation

Department (GTD) is the
supervisory authority tasked
with monitoring the availability
of accounting records
in Albania. However, no
information was available in
relation to the compliance rate
with tax filing requirements
or in relation to enforcement
measures taken in relation
to non-filers. Information
concerning the percentage of
taxpayers audited was also
not available. Therefore, the
adequacy of the oversight
system could not be fully
ascertained.
Albania is recommended
to enhance its system of
oversight to ensure that
accounting information is
being maintained by all
relevant entities.
Banking information should be available for all account-holders (ToR A.3)

Phase2 Rating:
Compliant
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 97
Determination
Factors underlying
recommendations
Recommendations
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information) (ToR B.1)
Phase2 Rating:
Largely Compliant
Albania has introduced

legislation and regulations
to explicitly provide for
access powers for collecting
information for EOI and the
procedures to be followed
in those instances. These
provisions became effective
after the review period and,
therefore, could not be tested.
Albania is recommended to
monitor the effectiveness of
Article61/1 of the Law on
Tax Practices and Instruction
15/2015 of the Ministry of
Finance.
The rights and safeguards (e.g.notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information (ToR B.2)
Phase2 Rating:
Compliant
Exchange of information mechanisms should allow for effective exchange of information
(ToR C.1)
Phase2 Rating:
Compliant
The jurisdictions network of information exchange mechanisms should cover all relevant
partners (ToR C.2)
Albania should continue

to develop its exchange of
information network with all
relevant partners.
Phase2 Rating:
Compliant
The jurisdictions mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received (ToR C.3)
Phase2 Rating:
Compliant
98 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
Determination
Factors underlying
recommendations
Recommendations
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties (ToR C.4)
Phase2 Rating:
Compliant
The jurisdiction should provide information under its network of agreements in a timely
manner (ToR C.5)
This element involves
issues of practice
that are assessed in
the Phase2 review.
Accordingly no
has been made.
Phase2 Rating:
Largely Compliant
While Albanias responses to

EOI requests were generally
provided in a timely manner
and peer inputs confirms
the positive EOI assistance
provided by Albania, there
were significant gaps in the
organisational processes of the
competent authority and human
resources and relevant EOI
training appear to be insufficient
to ensure the effective
exchange of information on an
ongoing basis.

appropriate organisational
processes and resources are
put in place so that requests
continue to be responded in a
timely manner in all cases.
ANNEXES 99
Annex1: Jurisdictions response to the review report24

Albania is extremely grateful to the Global forum Secretariat; the highly
competent and professional assessment team for their strong commitment
and hard work throughout the review process and presentation of the report.
Albania expresses its appreciation to the Peer Review Group for their active
participation and comments provided during the formulation of the Phase2
Report. The report accurately reflects Albanias legal framework for transparency and exchange of information. Albania agrees with the report and
continues to affirm its strong commitment to maintaining the international
standards for effective exchange of information.
24.
This Annex presents the jurisdictions response to the review report and shall not
be deemed to represent the Global Forums views.
100 ANNEXES
Annex 2: List of Albanias exchange of information

mechanisms
Multilateral and bilateral exchange of information agreements

Albania signed the amended Convention on Mutual Administrative
Assistance in Tax Matters (the Multilateral Convention) on 1March 2013.
The Multilateral Convention entered into force in Albania in December
2013. In the case of the Multilateral Convention the date when the agreement entered into force indicates the date when the Multilateral Convention
becomes effective in relation to the other jurisdiction. The table also includes
territories to which the Multilateral Convention applies based on territorial
extension declared by a state party. The chart of signatures and ratification
of the Multilateral Convention is available at www.oecd.org/ctp/eoi/mutual.
Albania has signed 40DTCs, of which 35 are in force (see the table below).
No.
Jurisdiction
Type of EOI agreement
Date signed
Date in force
Andorra
Multilateral Convention
05-Nov-13
Not in force in
Andorra
Anguillaa
extended
01-Mar-14
Argentina
03-Nov-11
01-Dec-13
Arubab
extended
01-Dec-13
Australia
30-Aug-12
01-Dec-13
Austria
DTC
14-Dec-07
01-Jan-09
signed
01-Dec-14
Azerbaijan
23-May-14
01-Sep-2015
Barbados
28-Oct-15
Not in force in
Barbados
Belgium
DTC
14-Nov-02
01-Jan-15
04-Apr-11
01-Apr-15
ANNEXES 101
No.
Jurisdiction
10
Belize
11
Bermuda
12
Bosnia and Herzegovina
13
14
Date signed
Date in force
29-May-13
01-Dec-13
extended
01-Mar-14
DTC
17-Jun-08
10-Oct-08
Brazil
03-Nov-11
Not in force in
Brazil
British Virgin Islandsa
extended
01-Mar-14
DTC
09-Dec-98
01-Jan-00
26-Oct-15
Not in force in
Bulgariac
15
Bulgaria
16
Cameroon
25-Jun-14
01-Oct-15
17
Canada
03-Nov-11
01-Mar-14
18
Cayman Islandsa
extended
01-Jan-14
19
Chile
24-Oct-13
Not in force in
Chile
20
China, Peoples Republic

of
DTC
13-Sep-04
01-Jan-06
27-Aug-13
01-Feb-16
21
Colombia
23-May-12
01-Jul-14
01-Mar-12
01-Dec-13
DTC
02-Dec-94
01-Jan-99
11-Oct-13
01-Jun-14
extended
01-Dec-13
10-Jul-14
01-Apr-15
DTC
22-Jun-95
01-Jan-97
22 Costa Rica
23 Croatia
24
Curaao
25 Cyprus
26 Czech Republic
27 Denmark
26-Oct-12
01-Feb-14
27-May-10
01-Dec-13
DTC
23-Feb-05
01-Jan-06
01-Jun-15
Not in force in
El Salvador
DTC
05-Apr-10
Not in force
29-May-13
01-Nov-14
extended
01-Dec-13
27-May-10
01-Dec-13
28 Egypt
29 El Salvador
30 Estonia
31
Faroe Islandsd
32 Finland
102 ANNEXES
No.
Jurisdiction
Date signed
Date in force
DTC
24-Dec-04
01-Jan-06
27-May-10
01-Dec-13
DTC
15-Jan-98
01-Jan-99
35 Gabon
03-Jul-14
Not in force in
Gabon
36 Georgia
03-Nov-10
01-Dec-13
DTC
06-Apr-10
01-Jan-12
03-Nov-11
01-Dec-15
10-Jul-12
01-Dec-13
extended
01-Mar-14
33 France
34
37
Former Yugoslav
Republic of Macedonia
Germany
38 Ghana
39 Gibraltar
40 Greece
DTC
14-Jul-95
01-Jan-01
21-Feb-12
01-Dec-13
41
Greenlandd
extended
01-Dec-13
42
Guatemala
05-Dec-12
Not in force in
Guatemala
43 Guernseya
extended
01-Aug-14
DTC
06-Dec-95
01-Jan-96
12-Nov-13
01-Mar-15
44 Hungary
45 Iceland
46 India
47
Indonesia
48 Ireland
49 Isle of Man
50 Israel
51
Italy
52
Japan
53 Jerseya
27-May-10
01-Dec-13
DTC
08-Aug-13
Not in force
26-Jan-12
01-Dec-13
03-Nov-11
01-May-15
DTC
16-Oct-09
01-Jan-12
03-Nov-11
01-Dec-13
extended
01-Mar-14
24-11-15
Not in force in
Israel
DTC
12-Dec-94
01-Jan-00
27-May-10
01-Dec-13
03-Nov-11
01-Dec-13
extended
01-Jun-14
ANNEXES 103
No.
Jurisdiction
Date signed
23-Dec-13
01-Aug-15
08-Feb-16
Not in force in
Kenya
DTC
17-May-06
01-Jan-09
27-May-10
01-Dec-13
57 Kosovo
DTC
28-Mar-14
1-Jan-16
58 Kuwait
DTC
04-Apr-10
01-Jan-14
DTC
21-Feb-08
01-Jan-09
29-May-13
01-Nov-14
54 Kazakhstan
55 Kenya
56 Korea
59 Latvia
Date in force
60 Liechtenstein
21-Nov-13
Not in force in
Liechtenstein
61
07-Mar-13
01-Jun-14
DTC
14-Jan-09
Not in force
29-May-13
01-Nov-14
DTC
24-Jan-94
01-Jan-95
Lithuania
62 Luxembourg
63 Malaysia
DTC
02-May-00
01-Jan-01
26-Oct-12
01-Dec-13
65 Mauritius
23-Aug-15
01-Dec-15
66 Mexico
27-May-10
01-Dec-13
DTC
06-Dec-02
01-Jan-04
27-Jan-11
01-Dec-13
13-Oct-14
Not in force in
Monaco
DTC
22-Dec-05
01-Jan-07
extended
01-Dec-13
21-May-13
Not in force in
Morocco
DTC
5-Oct-15
Not in force
DTC
22-Jul-04
01-Jan-06
27-May-10
01-Dec-13
64 Malta
67
Moldova
68 Monaco
69 Montenegro
70
Montserrat
71
Morocco
72 Netherlands
73
New Zealand
26-Oct-12
01-Mar-14
74
Nigeria
29-May-13
01-Sep-15
104 ANNEXES
No.
Jurisdiction
Date signed
Date in force
27-Nov-15
Not in force in
Niue
DTC
14-Oct-98
01-Jan-00
16-Sep-09
01-Dec-13
29-Sep-14
Not in force in
Philippines
DTC
05-Mar-93
01-Jan-95
09-Jul-10
01-Dec-13
27-May-10
01-Mar-15
DTC
01-Jan-95
01-Jan-96
15-Oct-12
01-Nov-14
DTC
11-Apr-95
01-Jan-98
03-Nov-11
01-Jul-15
82 San Marino
21-Nov-13
01-Dec-15
83 Saudi Arabia
24-Feb-15
01-Apr-16
04-Feb-16
Not in force in
Senegal
DTC
22-Dec-04
01-Jan-06
24-Feb-15
01-Oct-15
DTC
23-Nov-10
01-Jan-12
29-May-13
01-May-16
extended
01-Sep-13
29-May-13
01-Mar-14
DTC
27-Feb-08
01-Jan-10
75
Niue
76
Norway
77 Philippines
78
79
Poland
Portugal
80 Romania
81
Russia
84 Senegal
85 Serbia
86 Seychelles
87
Singapore
88 Sint Maarten
89 Slovak Republic
90 Slovenia
91
South Africa
92 Spain
93 Sweden
94 Switzerland
27-May-10
01-Dec-13
03-Nov-11
01-Mar-14
DTC
02-Jul-10
04-May-11
11-Mar-11
01-Dec-13
DTC
26-Mar-98
01-Jan-00
27-May-10
01-Dec-13
15-Oct-13
Not in force in
Switzerland
ANNEXES 105
No.
Jurisdiction
95 Tunisia
96 Turkey
97
Turks and Caicos Islandsa
Date signed
Date in force
16-Jul-12
01-Feb-14
DTC
04-Apr-94
01-Jan-97
03-Nov-11
Not in force in
Turkey
extended
01-Dec-13
98 Uganda
04-Nov-15
Not in force in
Uganda
99 Ukraine
27-May-10
01-Dec-13
DTC
13-Mar-14
Not in force
DTC
26-Mar-14
01-Jan-14
27-May-10
01-Dec-13
27-May-10
Non amended
convention in
force since
1March 2014
(amended
convention not
yet in force
in the United
States)
100 United Arab Emirates

101 United Kingdom
102 United States
Notes: a. Extension by the United Kingdom.

b. Extension by the Kingdom of the Netherlands.
c. Bulgaria deposited its instrument of ratification on 14March 2016. The Convention will enter
into force for Bulgaria on 1July 2016.
d. Extension by Kingdom of Denmark.
106 ANNEXES
Annex3: List of all laws, regulations and other relevant

material
Commercial laws
Law on Entrepreneurs and Companies
Law on Non-Profit Organisations
Law on the National Registration Centre
Law on the Registration of Non-Profit Organisations
Law on Accounting and Financial Statements
Law on statutory audit
Taxation laws
Law on Income Tax
Law on Tax Procedures in the Republic of Albania
Banking laws
Law on Bank of Albania
Law on Banks in the Republic of Albania
Anti-money laundering laws

Law on the Prevention of Money Laundering and Financing of Terrorism
ANNEXES 107
Other
The Albanian Civil Code
Criminal Code of Albania
Law on Advocate
Law on Civil Servant
Law on Securities
Law 7918 on privatisation of state assets
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(23 2016 21 1 P) ISBN 978-92-64-25872-3 2016
Global Forum on Transparency and Exchange of Information

for Tax Purposes
PEER REVIEWS, PHASE 2: ALBANIA

This report contains a Phase 2: Implementation of the Standards in Practice review,
as well as revised version of the Phase 1: Legal and Regulatory Framework review
already released for this country.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is
the multilateral framework within which work in the area of tax transparency and exchange
of information is carried out by over 130 jurisdictions which participate in the work
of the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes.
These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange
of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
party. Fishing expeditions are not authorised, but all foreseeably relevant information
must be provided, including bank information and information held by fiduciaries, regardless
of the existence of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identified by the Global Forum
as relevant to its work, are being reviewed. This process is undertaken in two phases.
Phase 1 reviews assess the quality of a jurisdictions legal and regulatory framework
for the exchange of information, while Phase 2 reviews look at the practical implementation
of that framework. Some Global Forum members are undergoing combined Phase 1
plus Phase 2 reviews. The ultimate goal is to help jurisdictions to effectively implement
the international standards of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus represent
agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange
of Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency and www.eoi-tax.org.
Consult this publication on line at http://dx.doi.org/10.1787/9789264258730-en.

This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and
statistical databases.
Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-25872-3
23 2016 21 1 P
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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE

OF INFORMATION FOR TAX PURPOSES

Peer Review Report

This work is published on the responsibility of the Secretary-General of the OECD.

Please cite this publication as:

ISBN 978-92-64-25872-3 (print)

About the Global Forum  5

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

ABOUT THE GLOBAL FORUM 5

About the Global Forum

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

recommended that Albania ensure that appropriate organisational processes

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Information and methodology used for the peer review of Albania

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

General information on the legal system and the taxation system

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

The tax system

The National taxes include:

Income taxes (including corporate income tax and personal income

Value Added Tax

Excise duties (administered by customs department);

Taxes on games of fortune and casinos;

Other national taxes and fees.

Local taxes include:

Simplified income tax (tax on small business activities);

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Exchange of information for tax purposes

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Overview of the financial sector and relevant professions

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Compliance with the Standards: Availability of information 21

Compliance with the Standards

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

22 Compliance with the Standards: Availability of information

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Compliance with the Standards: Availability of information 23

Albanian domestic law that prevent a resident of Albania from acting as

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

24 Compliance with the Standards: Availability of information

A.1. Ownership and identity information

Companies (ToR4 A.1.1)

limited liability companies (LLCs) are separate legal entities with

Terms of Reference to Monitor and Review Progress towards Transparency and

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Compliance with the Standards: Availability of information 25

only up to the amount of their unpaid contribution to the companys

joint stock companies are companies which equity capital is

Information kept by public authorities

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

26 Compliance with the Standards: Availability of information

the value of the initial share capital subscribed,

nominal value of each share,

participation in the share capital, and

PEER REVIEW REPORT PHASE 2 ALBANIA OECD 2016

Compliance with the Standards: Availability of information 27

About the Global Forum 5