Albania has adopted Country-by-Country Reporting (CbCR) regulations as part of its alignment with OECD’s BEPS (Base Erosion and Profit Shifting) Action 13 and international tax transparency standards. The General Directorate of Taxation (GDT) in Albania oversees these requirements. This guide provides essential information for finance directors of multinational enterprises (MNEs) operating in Albania, including the criteria for applicability, reporting requirements, deadlines, penalties, and useful resources.

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Applicability of CbCR in Albania

Criteria for Reporting:

• The CbCR regulations in Albania apply to multinational groups if:
  • The group’s annual consolidated revenue equals or exceeds €750 million (approximately 73,762,500,000 Albanian Lek) in the previous fiscal year.
  • The ultimate parent entity (UPE) is tax-resident in Albania, or:
    • The UPE is located in a jurisdiction that does not require CbCR,
    • No agreement exists for the automatic exchange of CbC reports with Albania,
    • The UPE fails to provide the report.

Relevant Legislation:

• CbCR requirements in Albania are stipulated under Law No. 8438 on Tax Procedures, as amended, and the accompanying administrative guidelines issued by the GDT.

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Reporting Requirements

Information to be Reported:

• The CbC report must provide jurisdiction-specific aggregated data on:
  • Total revenue (segmented into related and unrelated party transactions),
  • Profit or loss before tax,
  • Income tax paid and accrued,
  • Stated capital and retained earnings,
  • Number of employees,
  • Tangible assets excluding cash or equivalents.
• The report must also include details of each group entity, their jurisdictions of tax residence, and main business activities.

Form and Submission:

• Reports must be filed electronically using the designated portal provided by the General Directorate of Taxation. Details on technical formats, such as XML schema, are outlined in GDT’s official documentation: GDT – CbCR Resources.

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Filing Deadlines

• The CbC report must be submitted within 12 months of the fiscal year-end. For example, for a fiscal year ending 31 December 2023, the report is due by 31 December 2024.
• Constituent entities in Albania must notify the GDT of the reporting entity’s identity and jurisdiction by the last day of the fiscal year.

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Penalties for Non-Compliance

Penalties:

• Non-compliance with CbCR obligations in Albania may result in:
  • Administrative fines for failing to file or for inaccuracies in the report.
  • Additional scrutiny, including audits, for repeated or deliberate non-compliance.

Defences:

• Penalties may be waived if the taxpayer demonstrates reasonable cause for non-compliance, but the burden of proof rests on the entity.

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Confidentiality and Use of Information

Data Protection:

• The data submitted in the CbC report is used solely for risk assessment and transfer pricing purposes. Albania ensures compliance with OECD confidentiality standards to safeguard sensitive information.
• Reports are exchanged with jurisdictions with which Albania has signed agreements, such as the Multilateral Competent Authority Agreement (MCAA), provided these jurisdictions adhere to data protection standards.