Tax news in Central European countries
Albania VAT Instructions amended
Instruction No. 30 dated 12 May 2009 made a numbero amendments to Albania’s VAT law.
Rental o buildings
One o the most signicant changes is a new optionto treat a rental supply o a building either as anexempt supply or a taxable supply. Previously, this wasconsidered a taxable supply. A taxable person can nowsubmit an application to the tax authorities requestingthat the supply be treated as exempt or taxable. Therequest must be in writing and submitted to theRegional Tax Directorate where the subject is registeredand provide details about the lease, such as the nameso the parties, tax identication number and address.
I a tax representative has not been appointed, allobligations and penalties imposed all on the Albanianbeneciary o the supply.
Penalties will be imposed on the tax authorities or latereimbursement i they ail to make a VAT reimbursementto a taxpayer within 30 calendar days rom the date arequest was submitted.
Social security contributions
Eective 1 May 2009, the minimum and maximumsalary base or purposes o calculating social and healthinsurance contributions is ALL 16,120 and ALL 80,600.
On 11 June 2009, the Council o Ministers approvedthe creation o a tax-ree economic zone in the regionaround Vlora, covering an area o approximately 478hectares. The zone is designed to encourage domesticand oreign investment and accelerate development othe area.The existing economic zone law (Law No. 9789, “Onthe development and unctioning o economic zones,”dated 19 July 2007) denes an economic zone as anarea with special “ree zone” or an “industrial park”status. Free-zone status is granted to a specied areao land and/or buildings and other immovable propertythat are used or production and commerce.A ree economic zone oers several tax advantages, inparticular, an exemption rom customs duties and VAT inrespect o goods that enter the ree zone rom licensedpersons and services rendered to such licensed personswithin the ree zone.Goods that enter the ree zone rom a dierent part othe customs territory o Albania and are not in transitare entitled to the same relies as goods destinedor export, meaning a VAT rate o 0%. Inrastructureservices that are oered rom a dierent part o theAlbanian customs territory to licensed developers andusers o the ree zone also receive the relies granted toexport services, such as VAT at the 0% rate.The ollowing goods and services, however, are notentitled to the benets o the customs duties or/and VATexemptions (the list is not exhaustive):
Goods that have entered the ree zone but aremissing are subject to customs duties and any tax thatwould have been due at the time they entered thezone.
Goods that leave the ree economic zone to entera dierent customs territory o Albania and arenot destined or transit in another state are in reecirculation only i tax liabilities are satised as i thegoods were imported goods.
Goods that are produced in the ree zone and thevalue o any components produced in the ree zonemust be deducted rom the value to calculate thetaxable base or customs duties purposes. Othertaxes, such as VAT, are calculated based on the ullvalue.
Goods or personal use that enter the ree zone aresubject to customs duties and other taxation.
Tax treaty news
Albania has continued to make progress in expanding itstax treaty network during the rst hal o 2009.
A treaty signed with Singapore on 28 May 2009 stillmust be ratied beore it can enter into orce.
Deloitte Central Europe