Banking and Finance


SEE LEGAL albania MEMBER KALO AND ASSOCIATES DELIVERS INFO ON LATEST AMENDMENTS TO SOME TAX AND CUSTOMS LAWS

January 16, 2017

1. Amendment to Excise Law
A new amendment no.126/2016 ““On some changes and additions to the Law no.61/2012 “On excise in the Republic of Albania”, as amended”, is effective as of January 1st, 2017.
Some of the main changes brought by this latest amendment include the followings:
• Biofuels used in the transport sector become subject to excise reimbursement for the value of the excise duty paid corresponding to the quantity of the “BIO” product, up to 5%. The
reimbursement shall be performed until 2020.
• Energy products such as petroleum gases and other gaseous hydrocarbons (with NC 27 11) will be subject to excise duty only if such products will be used as fuels for vehicles in road transport.
• The increase of the excise for tobacco products was cancelled for 2017. As of January 1st, 2018, the excise tax will be increased to ALL 5,750 for 1,000 cigarettes. Further, the excise tax is aimed to be increased annually to ALL 6000 for 1,000 cigarettes in 2019, ALL 6,250 for 1,000 cigarettes in 2020 and ALL 6,500 for 1,000 cigarettes in 2021. The excise tax rate for cigarillos and cigars is increased to ALL 4,400/kg as of January 1st 2017. The tax rate for other manufactured tobacco and tobacco substitutes remains unchanged amounting to ALL 4,400/kg; whereas, a reduced excise tax rate of ALL 2,500/kg shall apply for manufactured tobacco from leafs grown in Albania.
• Important changes are made to the Chapter XII of the Excise Law concerning applicable
penalties. Some of the main changes include the followings:
- In addition to penalties with fine (the amount of which remain unchanged), excise products
found without the proper fiscal documentation are to be seized;
- Additional penalties are imposed to the approved warehouse keeper;
- Excess or missing quantities in the fiscal warehouses are to be compared with the accounting register, whereas the penalty imposed for excess in the warehouses is the same but the fine may not be less than ALL 200 000;
- For differences identified in the quality of the products subject to excise tax, a fine of three
times the amount of tax liabilities that should have been normally paid, shall apply;
- For purposes of calculating the amount of excise tax for surpluses or missing quantities in the warehouses of manufacturing / stockpiling of raw materials for the production of excise
products, the level of excise tax will be calculated on the basis of the highest taxation for a
product that can be produced with the same raw materials;
- When the same person have performed several administrative violations at the same time,
each violation will be treated separately;
- The tentative violation is considered as committed.
2. Amendment to National Taxes Law
A new amendment no.127/2016 ““On some changes and additions to Law no. 9975, dated 28.7.2008
“On national taxes”, as amended”, is effective as of January 1st, 2017.
Some of the main changes include the followings:
• The value of the vehicles considered as luxury vehicles is changed from ALL 7 000 000 to a value equal to or exceeding ALL 5 000 000;
• Circulation and carbon taxes shall apply on diesel and petrol which is included in the composition of biofuels;
• Diesel and petrol that is produced in Albania but is subject to exportation is circulation and carbon taxes exempt;
• The royalty tax rate for the composition of the metallic minerals in the mineral byproducts is being
reduced from 2/3 to 1/2 of the royalty tax rate as defined specifically by this Law.
3. Amendment to Income Tax Law
A new amendment no.129/2016 ““On some additions to Law no. 8438, dated 28.12.1998 “On income tax ” as amended”, was published on January 6, 2017, in the Albanian Official Gazette and it is effective 15 days following the date of official publication.
The most important changes include the followings:
• In case of loans, borrowing or financing from related parties, the expense of extra net interest rate that exceeds 30% of the taxable income before interest and tax, depreciation and amortization (EBITDA) will not be recognized as deductible expenses in the relevant tax period. Each interest expense which is nondeductible may be carried forward in the consecutive tax period, except when the taxpayer's ownership or voting rights has changed by more than 50 %. The above does not apply to banks, credit financial institutions, insurance and financial leasing companies. This change will become effective as of 1st of January 2018.
• The expenses of banks regarding annual and extraordinary contributions made pursuant to the Law
on recovery and extraordinary intervention in the banks in the Republic of Albania, are considered as deductible expenses for purposes of the taxable income.
4. Change of some customs tariffs
A new amendment to Law no.128/2016 ““On some changes to Law no. 9981, dated 8.9.2008, “On approval of customs tariffs rates”, as amended”, was approved.
According to this amendment, starting as of January 1st, 2017, the customs tariffs are reduced to 0% for some specific raw materials used in the inward processing industry (please see the relevant Nomenclature Code).

SEE LEGAL ROMANIA MEMBER FIRM PUBLISHES TAX FLASH FOR JANUARY 2017

January 13, 2017

Emergency Ordinance no. 3/2017 amending and completing
Law no. 227/2015 regarding the Fiscal Code was published in the Official Gazette 16/2017

Nestor Nestor Diculescu Kingston Petersen (NNDKP) from Romania Among the main amendments notes the following:

Corporate income tax

Taxpayers performing exclusively activities of innovation, research and development, as well as related activities are exempt from corporate income tax within the first 10 years of activity.
Microenterprise income tax

The threshold for the classification as microenterprise was increased from EUR 100,000 to EUR 500,000.
The micro-enterprises tax rate will be 1% for microenterprises having at least one employee.
Income tax

It is specified that medical services rendered based on medical subscriptions, borne by employees, are also deductible from an income tax perspective within the equivalent in RON of EUR 400 per year.
Transfers of buildings and lands from personal patrimony are subject to 3% tax for the excess over the non-taxable amount of RON 450,000.
Individuals who derive income from salaries from seasonal activities, included within the NACE classifications of art. 1 of Law no. 170/2016, based on individual employment agreements concluded for a determined period are exempt from income tax.
Social security contributions

The threshold representing the amount of 5 times the average gross salary for the monthly base for calculating social security and health contributions for persons deriving income from salaries and assimilated to salaries was eliminated.
Individuals deriving incomes from investment or incomes from other sources do not owe health insurance contribution for these types of income if they derive other income already subject to health insurance contribution (such as salaries or income from independent activities).

SEE LEGAL PROVIDES SUPPORT TO ZAGREB STOCK EXCHANGE IN THE ACQUISITION OF SHARES IN LJUBLJANA STOCK EXCHANGE

Zagreb Stock Exchange acquired 100% shares in Ljubljana Stock Exchange in 2015 with Croatian and Slovenian SEE Legal members acting as legal advisors covering corporate, competition and employment aspects of the transaction. The deal was closed in December 2015.

SEE Legal Slovenia Member Firm Coordinates Establishment of Security for a Syndicate Loan in Four SEE Legal Jurisdictions

A syndicate of eight banks led by an Agent sought assistance from the SEE Legal Slovenia member firm in establishment of various types of security over the debtor’s assets located in Slovenia, Croatia, Serbia and Bosnia and Herzegovina. The banks were particularly keen on being able to understand potential legal risks relating to each jurisdiction and gave a great emphasis on cost-effectiveness of the project. First, the banks were impressed how the coordinating SEE Legal member firm was able to provide a rapid response regarding the law firms to be involved in the respective jurisdictions and their proposed fee quotes. As the project developed, due to excellent responsiveness of its fellow SEE Legal member firms, the coordinating firm was able to provide the Agent with solution-oriented legal input regarding each jurisdiction in a very short timeframe. The Agent appreciated very much that no additional management was required on its side and expressed the opinion that the access to a network of excellent quality law firms indeed represents an important comparative advantage of the SEE Legal member firms.

THE MACEDONIAN SEE LEGAL MEMBER FIRM COORDINATES THE CREATION OF A PLATFORM FOR REGIONAL TRADING WITH SHARES

Polenak Law Firm assisted in the creation of SEE Link, a company registered in the Republic of Macedonia,by three shareholders (Bulgarian, Croatian and Macedonian stock exchanges), with the aim to provide platform for regional trading of shares. With the assistance of SEE Legal member law firms BOYANOV & Co.(Bulgaria) and DTB (Croatia), Polenak Law Firm will construe contracts that will form common legal infrastructure for participating exchanges, taking into account the legal environment of each participant (Bulgaria, Croatia and Macedonia) and drafting contracts between SEE Link and the executing brokers, and between SEE Link and the initiating brokers, providing legal review of such contracts in all three jurisdictions. This is an ongoing project.

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