Albania

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Overall Phase 2 Rating is Largely Compliant

Table of Determinations and Ratings of the Phase 2 Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
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.  Albania should ensure that appropriate mechanisms are in place to identify holders of bearer shares issued under the 1992 Law on Companies. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  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.  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)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
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)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
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)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
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 Article 61/1 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)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Albania should continue to develop its exchange of information network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  While Albania’s 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 organizational 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.  Albania should ensure that appropriate organisational processes and resources are put in place so that requests continue to be responded in a timely manner in all cases. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.