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GUIDELINE No. 24 of 2.9.2008 ON TAX PROCEDURES IN REPUBLIC OF ALBANIA Based on article 102, point 4 of Constitution of Republic of Albania and article 10, point 1 of Law No. 9920 of 19.05.2008 “On Tax Procedures in Republic of Albania’’, Minister of Finance, ISSUES THIS GUIDELINE: GUIDELINE PURPOSE For the implementation of Law No. 9920 of 19.05.2008 “On Tax Procedures in Republic of Albania”, this Guideline has the purpose to establish rules and procedures for administration of tax liabilities, and principles of organization and the working of tax administration in Republic of Albania. The Guideline Intends to unify and establish contemporary standards in order to guarantee a fair competition, equal and impartial the treatment, and transparency for a correct and uniform implementation of established procedures and rules, maintaining at the same time the proper balance between rights and obligations of taxpayer and tax administration. Rules and procedures of tax administration is terrible used in this Guideline intends to clarify the sense of Law provisions in order to guarantee their correct and uniform implementation and guarantee administration of taxes and duties with the lowest cost for tax administration and for taxpayer, by encouraging self-assessment and voluntary filling in of obligations by taxpayers, through education of taxpayer and impartial control based on analysis. CHAPTER I 1. Scope of Law and Guideline for Tax Procedures 1.1 Law No. 9920 of 19.5.2008 “On Tax Procedures in Republic of Albania”, a hereinafter referred to as “Procedures Law” or briefly the “Law”, and provisions of this Guideline “On Tax Procedures”, hereinafter called shortly “Guideline”, regulate administration procedures of tax liabilities in Republic of Albania and principles of organization and working of tax administration in Republic of Albania. Administration of all national or local kinds of duties, taxes and contributions of social and health insurance in Republic of Albania is based on Procedures Law, on this guideline, on laws and bylaws related to taxes. 1.2 Provisions of Law and Guideline to are implemented for all kinds of duties and tax liabilities, the including national and local duties and taxes and contributions of social and health insurance, except for the case his when a special always provide for it differently. 2. Range of action 2.1 Law “On Tax Procedures” and this guideline are applied for: a) registered taxpayers or obliged to be registered in tax administration, tax agents, agents for withholding tax in source, and other entities provided for by tax legislation; b) entities charged to calculate, pay, withhold, declare and transferred to State Budget contributions for social and health insurances; c) entities that are unregistered in tax bodies obliged to declare and pay contributions for social and health insurance or income tax, for their obligation regarding a sin of information, calculation, declaration and payment of of contributions and taxes ; ç) taxpayers and system of local taxes and duties, for procedures, tax rights and liabilities which are not regulated by Law No.9632 of 30.10.2006 “ On System of Local Taxes”, with amendments made or to be made to that law in the future. 3. Tax legislation Tax legislation comprises of: a) international agreements that Republic of Albania, Council of Ministers, local government bodies or other central or local institutions sign with other States or central and local institutions of those States, provided these agreements are there ratified by Parliament of Albania; b) specific tax laws regulating administration of central local taxes and duties including legislation on collection of contributions of social and health insurances; c) bylaws, including decisions of Council of Ministers, guidelines and orders of Minister of Finances, technical regulations and guidelines of General Tax Director, approved to support tax laws. 4. Kinds of duties and taxes Names and definitions regarding national and local duties and taxes are given in provisions of tax legislation, as referred to in point 3 above. 5. Definitions 5.1 Administration of all kinds of national and local duties, taxes and contributions of social and health insurances in Republic of Albania is based on Law No. 9920 of 19.05.2008 “On Tax Procedures in Republic of Albania ”, on this guideline, on other bylaws for implementation of this law, on special tax laws and bylaws for implementation of these laws. Tax administration, in its relations with taxpayers and other third parties, during all the process of administration of duties and taxes into consideration the use of unique terms as provided for in article 5 of Law, specific definitions made in international tax agreements, specific tax laws and Law on local taxes. 5.1.1 In implementation of letter “g” of article 5 of Law, the term “taxpayer”, includes the taxable entity or individual who is obliged by law to pay duties, taxes or contributions of social and health insurances, and the agent who withholds the tax in source. 5.1.2 In implementation of letter “gj” of this article, “main business place” shall mean that place where the taxpayer is a registered, has the central seat and where the effective business administration is made. If the registered place does not match with the place where business is effectively administered, main business place shall be considered the latter. Effective place of business administration is the place where business is actually managed, where management bodies are convened and where business decisions are taken. 6. Tax liability 6.1 Tax liability arises when the person realizes income, makes payments for is made and owner of the property, which are object of taxation according to tax legislation. 6.2 Tax liability rises when the person realizes income, makes payments, illegally, or becomes owner of a thing by illegal forms. Tax liability rises from the moment of income realization, of payment made or owning of the thing, regardless of time of identification by tax bodies. When the person becomes an owner of a thing by illegal forms, these liabilities calculated for the entire period in which the person has enjoyed the fruits of these property. 6.3 Tax liability includes tax, interest for overdue payments and penalties, in accordance with provisions of this law and specific tax laws and legislation on local taxes. 6.4 Tax liability for dead individuals or liquidated companies is provided for as follows: a) In case of a dead individual or natural commercial person, tax liability ceases on the day of death and legal heirs are responsible for calculation and payment of duties of this person; b) In case of a liquidated legal entity, tax liability ceases on the date of liquidation and liquidator or representative, appointed legally, is responsible for calculation and payment of text of this entity. 6.5 Tax liabilities are calculated and paid in lek, save the cases when law provides for otherwise. 7. Rights and obligations of tax withholding agent. 7.1 Tax withholding agent has the same rights and obligations as a taxpayer, save the case when this law or specific tax laws and local taxes legislation provides for otherwise. 7.2 In addition to other obligations as taxpayer, tax withholding agent has the following duties regarding calculation, withholding and transfer of tax held in source to tax bodies: a) to calculate and withholding the source the tax, including contributions of social and health insurance for employees or third parties, in accordance with provisions of tax legislation; b) to a tax and contributions withheld in source in relevant accounts of tax bodies, in accordance with procedures and deadlines provided for in tax legislation; c) to keep records for duties held in the source, for entities whose tax was held and for tax payments in accounts of tax bodies in accordance with tax legislation provisions; ç) to give to tax administration Information regarding accounts, withholding and payment of tax in source, including other information regarding taxpayers whose tax was held in source in accordance with tax legislation provisions; d) to inform taxpayers whose tax was held in source regarding calculation, withholding and payment of tax in accordance tax legislation provisions. 8. Resident and non-residents taxable entity 8.1.1 Article 8 of Law gives the criteria for the establishment of tax residence for individuals, legal entities and commercial natural entities. Tax residence is the place where taxpayer has the complete tax responsibility regarding declaration of income, payments and properties object of taxation pursuant to tax legislation in force. So, Albanian tax resident taxpayer enjoys all rights and has all responsibilities deriving from provisions of Albanian tax legislation, including of obligation for registration, keeping of documentation, calculation, declaration and payment of taxes, giving information for each property for income realized by sources in Albania or abroad in accordance with requirements of tax legislation in force. 8.1.2 Individuals are considered Albanian residents for tax purposes when: a) When their place of residence is in Republic of Albania, in the sense of article 12 of Civil Code Code, that is, they have the permanent house, they have a family, they have vital and economic interests in Albania (country of vital interests) regardless of whether they work for different periods abroad or may have a foreign citizenship. b) They have Albanian citizenship and exercise functions in the name of Republic of Albania as diplomatic functionaries or employees appointed by the State in embassies, consulates or other similar international organizations abroad. c) They stay in Albania continuously or with interruptions, in a total of more than 183 days during the tax year regardless of citizenship for the country where their vital interests are. Calculation of duration of their stay includes the days of physical presence, that is, not only the business days, but also the days of arrival, days of departure and days of holidays. All individuals meeting at least one of the above criteria are considered Albanian tax residents. 8.1.3 Legal entities are considered to be Albanian residents for tax purposes when: a) They are registered as Albanian legal entities and at the central seat in Republic of Albania; b) They have the actual business management place in Republic of Albania. All legal entities meeting at least one of the above criteria are considered Albanian tax residents. 8.1.4 Commercial physical persons are considered Albanian residents for tax purposes, when they are registered as such in national registration center and have the main place of business exercise in Albania. 8.1.5 All taxpayers that do not meet one of the criteria mentioned in points 8.1.1 - 8.1.4 above are considered non-resident taxpayers. 9. Appointment of tax representative from non-resident persons 9.1 Pursuant to article 9 of Law, non-resident taxpayer nominates a resident tax representative, when this is required by legislation force. Resident tax representative may be an individual, a commercial natural person or a legal entity. The person nominated as tax representative has the right to act on behalf of his principal (the non-resident person) for all purposes are related to duties. He is also responsible to meet all obligations of non-resident taxpayers or all obligations he represents. Tax representatives should apply to register in National Registration Centre based on power of attorney issued by non-resident taxpayer that he will represent, as provided for in Law No. 7850 of 29.07.1994 “On Civil Code of Republic of Albania”. When the same person is nominated by special power of attorney to be tax representative of some non-resident taxpayers at the same time, he is obliged to register separately for each of them. Registration as text representative of a non-resident taxpayer is separate from the registration that this server presented to you might have done for his activity. The purpose of nomination of tax representative is to guarantee the calculation, declaration and payment of tax on behalf of the principal (non-resident natural or legal person), which on the basis of Albanian tax legislation is not obliged to be registered in Albania, but, because of business, properties or transactions that he makes in Albania, tax obligations rise, which should be met through a tax representative. 9.2 If all the income with the source in Albania are Subject to final withholding of tax in source, non-resident taxpayer may not nominate a tax representative. In the case of the non-resident individual, he may also not nominate a tax representative, if he manages to hand over tax statements, which, in accordance with special tax laws, he is obliged to submit to tax administration. 10. Technical guidelines 10.1 Pursuant to article 10, paragraph 1 of Law, Minister of Finance issues this General Guideline which includes every specific provision, stipulated by other provisions of this law, save the cases when they are regulated by special provisions. 10.2.1 Pursuant to article 10 of Law, when General Taxation Director deems it necessary or at the request of taxable persons or tax administration structures, he’s entitled to issue decisions expressing the tax administration official attitude for taxpayers specific circumstances pursuant to tax legislation. Decision has binding effect for tax administration, and taxable person who made the application and it is published in the website of General Taxation Directorate within 5 calendar days from its issue. Decision becomes binding for the taxpayer on the day when he receives the notice for that. Decisions of General Taxation Director are issued on the basis of “Administrative Procedures Code”, Part VI “Administrative Activity” and Chapter I of “Administrative Acts”. Publication of technical guidelines is made in such a way as not to give identifying data for the individual taxpayer 10.2.2 Technical guidelines issued by General Taxation Directorate should be considered to be included in the future in General Guideline for the implementation of this Law, in specific guidelines for the implementation of tax special laws of or in tax procedural manuals. 11. Negotiation, signing and implementation of international agreements 11.1 Tax international agreements are negotiated and signed by Ministry of Finance in cooperation with General Taxation Directorate, in accordance with provisions of Law “On signing International Agreements and Treaties”. 11.2 It is the General Taxation Directorate (shortly “GTD”) and not regional tax branches which makes the implementation of tax provisions of bilateral or multilateral agreements or conventions. Applications of taxpayer for implementation of international agreements are addressed to GTD. When taxpayers appear in regional taxation directorates and require exemptions, facilities, fiscal facilities, residence certificates or documentation and guidelines related to implementation of international agreements concluded by our country, they [applications] should be transferred to General Taxation Directorate for examination. This rule shall be implemented also for bilateral agreements for elimination of double taxation and prevention of fiscal invasion, concluded by our country and tax provisions that other agreements may contain, such as agreements for international transport, agreements for aids, agreements for credits, concessionary agreements, agreements for social and health insurances, etc. 11.3 Regional Taxation Directorates act directly according to provisions of international agreements only when provisions of tax laws and bylaws provide for such a thing or when they receive an official reply or guideline in writing from General Taxation Directorate. CHAPTER II PRINCIPLES, ORGANIZATION AND PERSONNEL OF TAX ADMINISTRATION 12. Principles of tax administration Administration of tax system of Republic of Albania by central and local tax administration is led by the following principles: a) Equal and effective implementation of legislation by tax administration, which means that tax legislation provisions or bylaws, including technical guidelines and tax manuals are implemented uniformly and logically for each taxpayer in the same and similar circumstances; b) promotion of self-assessment and self-declaration of tax obligations by taxpayers, which means the right of taxpayers to calculate and meet tax obligations in accordance with provisions of laws and bylaws in force; c) promotion of voluntary observance of tax legislation by means of informing, education and publication of secondary legislation, which means obligation of tax administration to inform taxpayers, tax agents and tax representatives with all means and methods available, including electronic and written publications and audiovisual media, publication in official gazette, publication of leaflets, etc. d) drafting and implementation of operational strategies and plans in order to guarantee implementation of tax legislation and fight against tax evasion and tax avoidance; e) cooperation with local and international tax bodies, cooperation with tax bodies for exchange of information, for implementation of tax legislation and prevention and fight against tax avoidance and tax evasion; f) pursue of changes in business and legislative environment and adaptation of organization systems of resources, technologies, information and working processes in order to achieve proper efficiency and effectiveness; g) promotion of electronic tax services, especially electronic declaration and payment of tax obligation; h) recruitment, training and promotion of tax employees, who are honest, polite and fair, who, for each case, implement the law, bylaws and decision, based on objective facts. 13. Tax administration organization 13.1 Tax administration is composed of: a) General Taxation Administration, its regional directorates and Tax Appeals Directorate; b) Local tax administration, which includes tax offices under local government authority. 13.2 Central tax administration is a central institution under Minister of Finance. 14. Tax administration 14.1 Pursuant to 1 of article 14 of Law, General Taxation Directorate together with its regional directorates is the only central tax authority in Republic of Albania. As such, it is the only authority that accepts tax statements for national duties and taxes including statements for contributions of social and health insurance. Based on them, it defines tax obligations, it controls exactness of statements of tax obligations of a taxpayer and reimbursement or return of duties paid in excess, if there are such ones. No other body, including Supreme State Audit, other external audit structures has the right to control, define or change the amount of tax liabilities of an individual taxpayer. 14.2 Main responsibilities and functions of General Taxation Directorate are: 1. To prepare and approve the strategic plan of main objectives and targets of tax administration for all GTD directorates and all regional tax directorates for a short term, midterm and long term period and monitor its rigorous implementation. 2. To identify, based on experience from practical implementation of legal framework and tax bylaws in force, the needs for changes and present relevant proposals to Ministry of Finance regarding changes in tax laws and bylaws for their implementation. 3. To prepare and approve working operational working procedures. In this regard, GTD should be guaranteed that these procedures promote proper transparency in relations with tax administration with taxpayers, create systems of internal control that minimize danger of corruption, guarantee equal treatment for all taxpayers, reduce subjectivity of tax employees and create documented cases, making it possible to control them and have responsibility for all actions made. 4. To offer assistance to guarantee correct implementation of tax laws, bylaws and manuals of regional tax and directorates. 5. To define uniform measures in accordance with legislation of civil service to measure performance of tax administration employees and create standard reports to check assessment performances nationally and for regional tax directorate. 6. To guarantee fair allocation of resources for each regional tax directorate. 7. To cooperate with all regional tax directorates to prepare annual working plans, based on number of personnel established for each directorate and functional objectives of performances for each regional tax directorate. These objectives are set based on productivity improvement. They should be a combination of quantity of work made (that is, of generated income) and quality of working processes made. 8. To draft and implement an annual program of visits in each regional tax directorate, to offer assistance and to make assessments, regarding efficiency of work made. In addition to numerical achievements and targets, these assessments include also effectiveness of management and work, regarding qualification of employees and performance of duty according to set procedures. Work assessment reports describe also the actions to be undertaken in order to correct the defects by setting also suitable deadlines for their realization. 9. To prepare assessment reports for the work of each regional tax directorate. A copy of this report is given to director of assessed regional directorate. 10. To approve annual working plan and plan of tax income for each regional tax directorate. 11. To decide the budget plan of each regional tax directorate and control its implementation. 12. To prepare common agreements, in order to coordinate the work with business associations and other State authorities, such as Customs, Treasury, High Labour Inspectorate, local government units, etc., in order to create proper possibilities for cooperation of exchange of information to the interest of tax administration. 13. To coordinate international relations for cooperation and exchange of information with tax administration of other States. 14. To implement a recruitment policy for employees of central tax administration in accordance with legislation on civil service and in accordance with approved structures. 15. To prepare, approve and control implementation of Ethics Code for tax administration employees, in accordance with rules of public administration ethics. 16. General Taxation Directorate units are not allowed in any case to control taxpayers directly. 14.3 Main responsibilities and functions of Regional Tax Directorate are: 1. To be assured that all actions they undertake in their activity are in accordance with and lead to rigorous implementation of strategic plan of tax administration. 2. To generate the amount of tax income in accordance with tax legislation in force, with the lowest possible cost, by promoting self-assessment and voluntary meeting of obligations by taxpayers and by impartial controls for all taxpayers, in order to detect and correct cases of failure to implement tax laws. 3. To cooperate with General Taxation Directorate in order to employ qualitative personnel, with moral integrity, with suitable taxation training and qualification, with necessary knowledge on functional procedures and proper personal skills to promote positive behavior on the part of taxpayers. 4. To prepare in cooperation with relevant directorates in GTD the operational plan in accordance with objectives in GTD strategic plan. 5. To set annual objectives in writing for each function and employee. 6. To cooperate with relevant structures in GTD for employees training. 7. To draft and implement programmes for all managers, in order for the latter to prepare a written report for assessment of the work made during the year by employees under them. 8. To follow all standard procedures of work, decided by directorates in General Taxation Directorate; 9. To give suggestions and make proposals to General Taxation Directorate regarding ways to improve standard working procedures. 14.4 Responsibilities and functions of tax administration GTD internal regulation provides for responsibilities and functions of directorates and sectors in General Taxation Directorate and in regional tax directorates. 15. Local government tax offices Local government tax offices work and implement Law No. 9632 of 30.10.2006 “On Local Taxes System”, amended and administer taxes, tax liabilities and local public payments, based on that law and further possible amendments. 16. Structure of central tax administration 16.1. Prime Minister approves Organizational Structure and general number of personnel of central tax administration, at the proposal of Minister of Finance, after coordination with Public Administration Directorate, in Ministry of Interior (PAD). 16.2. Minister of Finance approves the detailed organization chart of General Taxation Directorate and regional taxation directorates at the proposal of General Taxation Director. 16.3. Central tax administration is organized in directorates, according to the following basic functions: a) Service to and education of taxpayer, including public relations; b) Tax control, including verifications on the ground, selection for control by risk analysis and control operations; c) Tax administrative complaint, through Tax Appeals Directorate in General Taxation Directorate; ç) Collection of tax liabilities, including identification and management of tax debt and implementation of coercive measures; d) Tax investigation, including services and intelligence, investigation and implementation (task-force); dh) Supporting functions including processing of tax statements, assessment and reimbursement, income bookkeeping, finance, planning and statistics, information technology and internal audit, legal services, human resources administration and drafting of technical rules and international agreements. 16.4 Appeals Directorate is an independent unit in central tax administration. Tax Appeals Directorate has full independence in judgment of complaints and decision taking for them. 16.5. Internal regulation proposed by General Taxation Director and is approved by Minister of Finance provides for functions and duties of General Taxation Directorate, its directorates, regional directorates. 16.6 Minister of Finance may decide, in accordance with legislation in force, to subcontract specialized private entities, to carry out functions provided for in article 16 of Law. 17. Nomination of Director and deputy General Taxation Director 17.1 General Director is the highest management body of tax administration central. 17.2 General Taxation Director is appointed by Prime Minister, at the proposal of Minister of Finance. 17.3 Deputy Directors of General Taxation Directorate are nominated by Minister of Finance, at the proposal of General Taxation Director. 18. Tax Appeals Directorate 18.1 Tax Appeals Directorate is part of central tax administration. Tax Appeals Directorate administers tax complaints based on tax legislation in force by an independent judgment and decision taking. 18.2 Director of Tax Appeals Directorate is nominated by Minister of Finance. 19. Nomination of personnel 19.1 Legislation for civil servants for independent institutions is applied for nomination and promotion of employees of central tax administration, save the cases when this law provides for otherwise. 19.2 Legislation of civil service for independent institutions is applied for recruitment procedures of new central tax administration employees. 19.3 Tax administration employees that do not have the status of civil servants, are administered on the basis of Labour Code provisions. 20. Employment and employment categories 20.1 General Taxation Director makes the recruitment, parallel movements, promotion, motivation or disciplinary measures for central tax administration employees at the proposal of relevant structures and in accordance with provisions of civil service legislation or Labour Code depending on the case. 20.2 Structural organization divides personnel, according to duties, in employees of high, middle and low level, managers and executive employees. Division is made by approval of organizational structures and detailed organizational chart, taking also into account points 14, 16 and 19 of this Guideline. 20.3 Council of Ministers approves salaries level for each category, and procedures and time limits, for passing from a low level to a higher level in career, at the proposal of Minister of Finance, after coordination with PAD. 21. Personnel remunerations 21.1 Tax administration employees are motivated by remunerations based on effectiveness and efficiency of their work and special difficulties in certain functions. Amount of remuneration depends on individual performance indicators (meeting objectives), based on judgment of direct superiors and internal and external control reports. 21.2 Incentive bonuses are given by General Taxation Director, at the proposal of employee’s direct superior, approved by Deputy General Taxation Director or director of regional directorate depending on the case. 21.3 Minister of Finance approves a special guideline with rules and criteria to be followed by General Taxation Director for bonuses. 22. DISCIPLINARY PROCEDURES 22.1 General Taxation Director examines cases of violations identified by direct superiors, officers and other employees of central tax administration and proves disciplinary measures against employees of central tax administration. In order to exercise this function, General Taxation Director approves a Disciplinary Committee composed of five members, namely: Deputy General Director of Supporting Services with attributes of chairperson and four employees of category A (Directorate Directors). This Committee convenes according to needs (collected proposals) and it proposes disciplinary measures to General Taxation Director for employees who made the violation, giving facts and arguments for the violation and proposed disciplinary measure. 22.2 Taxation Disciplinary Committee examines submitted cases through: a) written request of direct superior of tax administration officer or employee; b) written request made by taxpayer, or his representative; c) with the initiative of General Taxation Director. 22.3 Disciplinary measures to be applied for tax administration civil servants should be also in accordance with legislation on civil service. Likewise, disciplinary measures taken against employees who do not enjoy the status of civil servants should be in accordance with Labour Code provisions. CHAPTER III GENERAL ADMINISTRATIVE PROVISIONS 23. Communication with taxable entities 23.1 Pursuant to point 1 of article 23 of Law, in order to communicate with tax administration regarding meeting of tax liabilities, taxpayers shall use the forms set in guidelines of Minister of Finance for implementation of special tax laws. These guidelines provide also for the data contained in these forms, completion deadlines and methods of their submission to tax administration. 23.2 Assessments, notifications and tax decisions and official communication that tax administration shall have with taxable entities is made in writing and sent to updated address given by taxable person using for this registered postal service. An official communication in writing sent by tax administration to taxpayer’s address, but not reaching the taxpayer or reaching him with delay for whatever reason is taxpayer’s responsibility. The day the taxpayer is informed about each act and correspondence sent by tax administration is considered the seventh day after date of sending of act or correspondence. Date of sending is date of admission of act of correspondence in the postal service. So, if an act or another whatever correspondence is admitted by postal service on date 1 of the month, it is considered to have been received and made known to taxpayer on date 8 of the month. 23.3 Tax administration official act or each other correspondence may be taken by taxpayer in person, if the latter wills it. In this case, date of reception of act is considered the date when the act is handed over to the taxpayer and is confirmed by the latter. On the other hand, in special cases, tax administration may send in person to the taxpayer every other act or official correspondence. In this case date of reception of act is considered the date when the act is handed over to taxpayer and is confirmed by the latter. In the case of handover of acts or every other correspondence in person, when taxpayer refuses to take them over, date of reception shall be considered the date when taxpayer has refused to take it over. 23.4 Taxpayer is obliged to declare full identification data, including address, telephone number, fax and electronic address (if applicable), so as to guarantee reception of notifications in time. 23.5 At the proposal of General Taxation Director, Minister of Finance approves the kind, form and content of tax documentation. 24. Giving tax information 24.1 Pursuant to article 24 of Law, tax administration is obliged to respond in writing for free to each request of Albanian or foreign official authorities mentioned in that article. Pursuant to letter c of this Law article, tax administration, based on written request is obliged to give information to Supreme State Audit only for cases when request is for control made by this institution in tax administration and for preparation of recommendations that they will make for it. Information given to these institutions does not include documentation declared and submitted by taxpayer, documentation contained in his file, which is confidential pursuant to article 25 of Law. These institutions do not have the right to decide, change or remove tax liabilities of a taxpayer. Pursuant to point 1 of article 14 of Law, tax administration is the only tax authority in Republic of Albania. 25. Confidentiality 25.1 Pursuant to article 25 of Law, taxation and financial data of each taxpayer, owned by tax administration, are confidential. Each tax administration employee who has access to these data, who was informed about these data during or because of exercise of his functional duties or for whatever other reason, is obliged to maintain their confidentiality against a third party. Confidential data are considered all data of taxation and financial nature related to taxpayer’s statements, taxation assessments made for him, exercised taxation controls, information coming or received from various sources, etc. Only taxpayer’s identification data and data related to his unpaid tax obligations for which procedures have started to be collected by force are not considered confidential data. 25.2 Obligation to maintain confidentiality continues even after tax administration employee is not any longer in this administration for whatever reason. 25.3 Information related to special taxpayers is used within tax administration, only to the extent required for tax administration and only by employees related directly to assessment or control of tax liabilities of those taxpayers. Violations of this provision are submitted for examination to Disciplinary Committee by direct superior of employee who made the violation. 25.4 Condition for maintenance of confidentiality ends in cases when taxpayer waives in writing his right to maintain confidentiality for as long as it is allowed in the statement made by the taxpayer. 25.5 Exchange of information is made in execution of international agreements inside the country signed by tax administration is made with the condition of maintenance of confidentiality for institutions and individuals who are informed about the taxation data in accordance with provisions relevant of those agreements and provisions of this guideline and specific taxation guidelines. 26. Avoiding conflict of interest 26.1 Tax administration civil servants and employees implement tax laws directly, impartially and they do not administer, influence or orientate the taxpayer in his activity. Tax inspectors should declare to direct superior and should not to be involved in tax assessments, controls for tax investigations, etc., of taxpayer with which they have direct or indirect relations in the sense of this Guideline. Violations of this provision are submitted for examination to Disciplinary Committee by direct superior of employee who made the violation. 26.2 Tax administration employees cannot control or assess their own taxes or those of people related to them except for cases of self-assessment of his liabilities, when this thing is required by legislation in force. Declaration of such cases and punishments in cases of violations are made in accordance with provisions of point 26.1 above. 26.3 Tax administration employees can be employed with part time or fulltime in other activities with payment, save teaching activity, part time employment or participation in such groups in scientific and educational public or non-public institutions, with the sole purpose to carry out scientific studies for teaching, taking into consideration provisions of points 26.1 and 26.2 above. 27. Tax information publication 27.1 Tax administration may publish summarized information of tax income, tax controls, during its activity, with the purpose to inform taxpayers and the public, and to use taxation data in drafting statistics. 27.2 Publication is made in such a way and form as not to allow identification of individual taxpayers and guarantee maintenance of confidentiality of individual taxpayer’s data. Exceptions to this rule are cases of collection of tax obligations liabilities by force and cases of persons who exercise illegal activities or are not registered in taxation bodies. 28. Public information for changes in tax legislation and tax procedures 28.1 Tax administration has the duty, by using all communication means including written or electronic media to inform the public about contents, role and importance of tax legislation. General Taxation Directorate publishes clarifying materials, commentaries and other explanatory materials regarding tax legislation and possible amendments to provisions of tax laws and bylaws. 28.2 For the purposes of public information, for the new tax laws, amendments made in tax legislation and other bylaws issued for its implementation, the publication is made by written and electronic media and through official internet web page of General Taxation Directorate no later than 15 days after publication in Official Gazette. 29. Tax liabilities file 29.1 Regional tax directorates open files for each taxable person, registered under their jurisdiction. Taxable person’s file is confidential. Each data or information related to taxable person is inserted in his file. Taxable person’s file should be updated continuously. 29.2 Tax administration is obliged to make available to taxable person all data that file of his tax liabilities has. When it is possible, these data are made accessible to taxable person electronically. Otherwise, these data are made available to taxable person by paper copies of file documents, at his written request. 29.3 Taxpayer’s file is always preserved. They are preserved in an alphabetical order. A regulation approved by General Taxation Director provides for more detailed instructions regarding form, manner and deadline of preservation of file data. CHAPTER IV TAXPAYERS RIGHTS 30. Right to information and assistance 30.1 Taxpayers have the right to receive in time all proper information which enables them to know, understand and implement correctly taxation legislation and tax liabilities. They have also the right to be assisted for free in order to know their rights and meet obligations for their specific situations. This system is guaranteed by tax administration in a binding way through directorates of services to taxpayers, created in each regional taxation directorate, and by compulsory public information, according to article 28 of Law. Public information includes obligation of taxation administration to make available to taxpayer electronically and by written media, leaflets, different publications and ways of information about tax legislation, guidelines issued to implement it, commentaries, orders and tax manuals. 30.2 Tax administration has the obligation to treat all taxpayers fairly, impartially and with professionalism. 31. Right of data confidentiality 31.1 Pursuant to article 31 of Law, tax administration should protect confidentiality of taxation, personal and financial data entrusted to it or that it has managed to find in different ways. Taxpayer’s data shall be used by tax administration only for purposes allowed by law. Only tax administration employees which should consult the data of a taxpayers in order to carry out their legal functions will have access to these data. In order to control and implement correctly this right of taxpayer, regional tax directorate should supervise continuously their internal working the processes. 31.2 pursuant to the of point 2 of article 31 of Law, confidential are considered the data of taxation and financial nature that are the found in statements of taxpayers, exercised taxation controls, taxation assessments made for these taxpayers and information coming or received from third parties or from other various sources. 32. Right to be notified 32. Taxpayers have the right to be notified at any time for each tax administration administrative act issued on their name that affects their property or tax liabilities. They have also the right to "get to know the reasons and legal basis for issue of such an administrative act. On the other hand, tax administration, based on article 69 of Law, has the obligation to send the administrative decision issued by it for the taxpayer and give the legal basis and every other proper explanation its nationwide, by informing at the same time the taxpayer for a piece of the rights and obligations of related to this decision. This obligation is not observed by tax administration only when it owns concrete and reliable evidence and that the taxes are in danger. 33. Right to reasonable controls 33. In case of a tax control by tax administration, taxpayer has the right to be notified in advance for the time when control shall start, the place where it will be the made, kinds of duties to be controlled, tax periods that control will cover, etc. Taxpayer has also the right to expect to be treated politely and respectfully during the entire time, including also the period when he will be ask for information, when he will be interviewed or controlled. Moral integrity, professionalism, respect and cooperation are tax administration main values that taxpayer should see in a tax control. These qualities should be manifested by tax administration in order to reflect its devotion to give the best possible service to taxpayer. 34. Right to information 34.1 Taxpayers have the right to expect from tax administration correct Law implementation so that each of them has the rights belonging to them and pay tax liability due amount. They have the right to claim and see in tax administration a reliable administration for what it does. Taxpayers have the right to submit all their claims regarding taxation assessment by tax administration. Taxpayers, who do not agree with taxation assessment of tax administration, have the right to receive a written reply for their claims, in which all reasons of taxation assessment, assessment method, rights and obligations regarding this assessment are given. 34.2 With a written application of taxpayers, within a deadline of no more than 5 business days from application registration date in taxation body protocol, tax administration is obliged to issue certificates confirming taxation situation of taxpayers regarding payments of tax liabilities, taxable income, unpaid tax liabilities, etc. 35. Right to representation 35.1 Taxpayer has the right to nominate his representative by power of attorney. Taxpayer’s representative is a person chosen by taxpayer to represent him with regard to taxation issues. Taxpayer’s representative undertakes taxpayer’s rights and obligations and tax administration is obliged to cooperate and operate with representative appointed by taxpayer. 35.2 Nomination of a taxpayer’s representative does not discharge the latter from taxation responsibility. He remains legally responsible to meet his tax liabilities. An error made by taxpayer’s representative in declaration and payment of tax liabilities, does not discharge the latter from responsibility for the mistake. 36. Right to require evidence in writing or electronically Based on article 36 of Law, taxpayer has the right to require from tax administration at any moment an electronic or written copy, certified with the original, of each document contained in his individual file. In addition to this, he has the right to require printed copies of electronic data related to his situation. If taxpayer needs printed copies of electronic data, they should be certified by tax administration. Based on article 29 of Law, tax administration has the obligation to create and update taxpayer’s file of tax liabilities, which should be accessible by taxpayer electronically. If electronic access to his file is not possible, taxpayer has the right to require in a written form from tax administration to make copies of file documents available to him. 37. Right to be heard Before tax administration takes an executive decision, taxpayer has the right to expect from the latter to be herd attentively in order to give necessary clarifications, to submit his claims, to explain specific circumstances, etc. He has also the right to be guaranteed that his explanations and claims shall be examined attentively and fairly by tax administration in order to take fair decisions in conformity with taxation laws. 38. Right to complain 38.1 Whenever taxpayer does not agree with an administrative act and believes that tax administration has not implemented law correctly, he has the right to complain to Tax Appeals Directorate in GTD, requiring the independent administrative re-examination of issues related to this act. If taxpayer shall not be satisfied with decision of Appeals Directorate, he has the right to continue his complaints to the court. 38.2 Taxpayer has also the right to complain to Regional Directorates or to GTD administratively each action or inaction by taxation officials that may violate taxpayer’s rights. CHAPTER V OBLIGATION OF TAXABLE PERSONS TO BE REGISTERED 39. Registration of individuals 39.1 According to special taxation laws in force, individuals are responsible to pay tax liabilities to tax administration, directly (not withholding tax in source), in certain conditions and circumstances. This comprises tax on personal income which is paid for some kinds of income for which no tax in source is withheld. Individuals which profit these kinds of income have the obligation to make self-declaration about them. In this case, in order to be identified for payments made, these individuals declare to tax administration their personal identification number which is a unique number issued for individuals by authorities of social insurances. 39.2 According to point 2 of article 39 of Law, for identification of individuals taxpayer who will pay tax on personal income to be self-declared, tax administration opens a special register in which all identification data are entered. This register shall be drafted and produced by GTD, in a database form, according to the model approved by GTD directorates. 40. Registration of persons who exercise commercial economic activity 40.1 Each person who will exercise economic commercial activity is obliged to make initial registration in National Registration Centre according to procedures set in Law No. 9723 of 3.5.2007 “On National Registration Centre” (QKR). Initial registration and every other registration is made by application to each reception service of National Registration Centre in the entire territory of Republic of Albania, regardless of the place of exercise of activity, residence or seat of applicant. Registration is made by submitting relevant application, with attached associating documents proving the data to be registered. 40.2 Registration, in accordance with Law “On National Registration Centre” serves at the same time as registration in taxation, in social and health and insurance schemes and in labour inspectorates and tax bodies; 40.3 In the initial registration and provision of registration certificate, in addition to other things taxable person declares in registration form also the compulsory data according to legislation on taxation and contributions of social and health insurances. Registration of taxable persons in commercial register is at the same time a registration in tax administration for tax liabilities and contributions of social and health insurances. Commercial register data are transferred periodically to tax administration, according to rules set in Law on National Registration Centre and bylaws for its implementation. After registration in NRC and in the ongoing activity exercise taxpayer is obliged to inform and match with tax administration all kinds of duties and taxes that he should declare, pay, withhold in source or transfer to relevant accounts. 40.4 When registered in National Registration Centre each taxable is provided with a Registration Certificate, which contains Identification Number of Taxable Person (NIPT). Identification Number of Taxable Person is unique. Taxable person, who exercises the activity in different business addresses (locations), is provided with registration certificate for each address, which has the same unique Identification Number of Taxable Person. Registration Certificate contains name of taxable person, his commercial name (if applicable), Identification Number of Taxable Person (NIPT) and the date when registration enters into force. All statements made for taxation bodies, all invoices issued by registered person and all documents used by him in this economic and commercial activity should contain Identification Number of Taxable Person. Registration Certificates of taxable person should be exposed in all addresses where taxable person exercises his economic and commercial activity. These certificates are taken at the beginning of economic commercial activity and are valid forever, until cancellation of registration of taxable person. After their registration, taxable persons as a rule shall be under the jurisdiction of regional tax directorate where they have their central seat. 40.5 Law “On National Registration Centre” provides for registration procedures of persons who exercise commercial activity. Secondary legislation for implementation of this law provides for documents required as part of application for taxation purposes. Registration is made in National Registration Centre or its branches in districts. 40.6 Failure to register does not release a person from payment of taxation liabilities or meeting other taxation obligations. 41. Identification of persons exercising commercial activity without registration 41.1.1. A person who is not provided with a Certificate for Activity Exercise and has actually exercised the activity is not exempt from taxation liability. A taxation liability starts from the moment when the person has started his activity. This liability includes taxable persons which exercise economic commercial activity and each non-profit organization, foundation, national or local public entity, special projects implementation units, political organizations and other similar bodies which carry out religious, humanitarian, charitable, public, educative, scientific or educational activity. 41.1.2 Central and local taxation administration has the legal obligation to identify the persons who exercise economic and commercial activity without registration in National Registration Centre. Central Taxation administration has also the legal obligation to identify all the other persons as non-profit organizations, foundations, project implementation units, national and local public entities, political organizations and other bodies similar to them, which exercise activity without registration in tax administration. In this case, persons identified as unregistered are obliged to register within 15 days from date of identification as unregistered,. 41.1.3 All persons identified as unregistered are registered in a special register of taxation administration, writing protocol number of identification (finding) as unregistered identification date, person’s identifying data, company’s complete address, telephone number and every other available data. 41.1.4 Tax administration has the right to register a non-profit organization, foundation, national or local public entity, special projects implementation units, political organizations and other similar bodies which carry out religious, humanitarian, charitable, public, educative, scientific or educational activity with no profit purpose, when identified as unregistered, which, though obliged, does not require to be registered. Registration is made in regional taxation directorate of jurisdiction. Registration from taxation administration is made by completing the registration form on behalf of taxable person. Registration certificate is issued for these persons by regional branch of taxation of the jurisdiction when they are registered, which contains also the unique identification number of non-profit organization. After registration, regional taxation directorate of jurisdiction notifies non-profit organization, according to notification rules set in this Guideline. In addition to others, notification includes assessment of taxation liability of non- profit organization for the entire period from the moment of commencement of activity until obligatory registration date. 41.1.5 Compulsory registration by tax administration includes also taxable persons who exercise economic and commercial activity. For this category of persons registration is made in regional taxation directorate of jurisdiction. Their registration of by tax administration is made in a special and temporary register. After registration in this register, regional taxation directorate of jurisdiction notifies taxable person according to notification rules set in this Guideline. In addition to others, notification includes assessment of taxation liability of taxable person for all the period from the moment of commencement of activity until compulsory registration date. All procedures set in law and this Guideline are applied against these taxable persons as for all other taxable persons registered correctly. 41.2 Based on article 41 of Law, if persons identified as unregistered are not registered within 15 calendar days, depending on the case, in National Registration Centre or in tax administration, regional taxation directorate of jurisdiction takes measures to close the activity. 41.3 Taxation administration calculates and collects taxation liability and administrative fines, until registration in National Registration Centre is completed, in accordance with this law. 41.4 Taxation administration calculates, assesses and collects taxation liabilities by applying also coercive measures, in accordance with taxation legislation, during the period until registration process completion by the person. Non-registration does not prohibit taxation administration to collect taxation liabilities rising from taxation legislation in force. 42. Registration of non-profit organizations 42.1.1 Non-profit organization, foundation, national or local public entity, special projects implementation units, political organizations and other similar bodies which carry out religious, humanitarian, charitable, public, educative, scientific or educational activity with no profit purpose, are obliged to be registered in tax administration and be provided with taxation certificate in this administration. In order to be provided with taxation certificate, the above persons should submit to taxation bodies the court decision which approves registration, incorporation act, statute and all other data provided for in point 3 of article 42 of Law. In addition to these documents, they should complete and submit the form “Application for Registration”. When the form “Application for Registration” is completed, non-profit organizations declare, besides others their status regarding taxation liabilities for each kind of tax and for contributions of social and health insurances. 42.1.2 Registration of non-profit organizations is made in regional taxation directorate of jurisdiction, within 5 days from completion and submission of form “Application for Registration”. Tax administration keeps a special electronic register to record non-profit organizations. When non-profit organization is registered, tax administration issues the Registration Certificate for it, which contains name, form, unique identification number of initial registration and address of principal place of activity exercise. These persons take a single identification number regardless of number of branches they have. When non-profit organizations exercise activity in more than one address, tax administration issues a registration certificate for each address of their activity exercise. 42.1.3 All statements made for tax administration and all documents used by non-profit organizations in their activity should contain the unique identification number of person. Registration Certificate in tax administration is issued in original for each separate address of activity exercise. In case of loss or damage of registration certificate of person, it is replaced by a duplicate issued by tax administration. Registration Certificates should be exposed in all addresses where these organizations exercise their activity. These certificates are received at the beginning of activity and are valid forever until cancellation of person’s registration. 42.2 Tax administration keeps a special electronic register for non-profit organizations including foundations and budgetary institutions listed in point 42.1.1 above. 42.3 In the register mentioned in point 42.2 above, the following data are registered: a) name; b) duration, if this is defined; c) activity scope; ç) place of activity exercise; d) personal data of manager and organization’s legal representative; dh) document certifying representation competences and deadlines of their nominations; e) other organization data in relations with third parties helping to control and collect taxes; f) number of employees. 42.4. Registration in tax administration of nonprofit organizations is made after submission to tax administration application form for registration together with documentation attached to the form. Application form for registration and require documentation as part of the application are published in official web site of General Taxation Directorate and may be downloaded by persons concerned or may be received for free in each reception of service to taxpayers. 42.5 Tax administration, within 5 days from date of reception of completed and correct application form, process is the application for taxation registration, registers the applicant and provides him with a registration certificate, with an identification number. 43. Changes in registration 43.1 According to article 43 of Law, taxable persons who exercise economic and commercial activity, are obliged to declare to National Registration Centre, every later changer regarding name, address, seats and branches, legal form, creation or closing of branches, change in kind of activity, etc., as provided for in legal provisions for NRC. 43.2.1 When taxation liability after initial registration changes, taxable person is obliged to notify regional taxation directorate of jurisdiction for occurred changes. Regional taxation directorate makes these changes in tax administration system, by making the necessary system eyes in taxable person’s file. A case of change of tax liability may be, for example, surpassing the turnover volume of 8 million lek in a calendar year (surpassing threshold of registration for value added tax). In this case, tax liability of taxable person changes, that is, from a taxable person of local tax on small business, he should be transferred into taxpayer registered in VAT. Another case of change of tax liability may be the change of liability for contributions of social insurances, for example, from the single self-employed person to the self-employed person with employees, etc. and in this case, taxpayer is obliged to notify tax administration for each change, and it makes these changes in tax administration system. 43.2.2 In order to make the needed change, taxable person who meets the above conditions, should complete within 15 days from the moment his taxation liability has changed the form of changes in register and submit it to regional taxation directorate of jurisdiction. Based on this form signed by taxable person, regional taxation directorate makes the required change in +computer science taxation system. The change made in this way by tax administration, within 10 calendar days is made known to National Registration Centre and depending on the case to relevant taxation office of local government unit. 43.2.3 In cases when a taxable person has not notified tax administration for the occurred change, though he has the legal obligation to do it, the change is identified and verified by tax administration control, which makes the needed change and notifies the taxable person and depending on the case, National Registration Centre and taxation office of relevant in local government unit. So, for example based on taxation control made in place of taxable person or based on data of imports received by customs, it appears that taxpayer of the local tax on business met conditions to be a person registered for value added tax. But, though taxable person himself is obliged by law on value added tax, he has not made the registration as the VAT taxpayer. In this case, tax administration enjoys the right to complete in the name of taxable person the relevant form of changes in register, to enter it in electronic system of the duties of taxation and notify at the same time the taxable person for this and depending on the case, National Registration Centre and taxation office of relevant unit in local government. 43.3 Non-profit organizations, foundations, special project implementation units national or local public entities, political organizations and other similar bodies are obliged to notify tax administration (relevant taxation regional directorates), for every later change related to: a) change of name; b) change of address of activity or contact; c) change of legal status; d) creation/closing of branches, sectors or new units; e) change of kind of economic activity; f) change of number of employees; g) every other change, provided for in laws and bylaws issued for implementation of taxation legislation. 44. Transfer into passive register 44.1.1 Tax administration has the right to transfer registration of a taxable person from active register into passive register of taxable persons. This transfer is made when regional taxation directorate has found sufficient evidence that taxable person for whatever reason, did not exercise activity in the recent fiscal year, that is, has not submitted tax statements and/or has submitted statements with no activity, and/or in cases when taxpayer declares and approves officially suspension of commercial activity according to specifications made in law. In all the above mentioned cases, when taxpayer do not submit tax statements and/or has submitted tax statements with no activity during 12 months of recent fiscal year, regional taxation directorate: a) should verify in business premises or address of taxpayer the absence of economic activity during 12 months of recent fiscal year. This verification is identified in a protocol. b) should verify the data received by General Customs Directorate and send to regional taxation directorate whether taxable person has made imports during 12 months of recent fiscal year. c) should verify the data owned by third parties including Treasury, regional directorate, whether taxable person has made actions during 12 months of recent calendar year. Only after all the above actions are undertaken, taxpayer and registration service in regional taxation directorate jurisdiction transfers these persons into passive register and from this moment no tax statements are generated any longer for these taxpayers, releasing them from all kinds of taxation liabilities for the time the data are in passive register. 44.1.2 Specific procedure for transfer of taxable person from active register into passive register of taxable persons, documentation that is prepared, duties and responsibilities of directorate and sectors, which take part in this process are described in the relevant taxation manual. 44.1.3 After a taxable person is transferred into passive register, regional taxation directorate of jurisdiction does not consider him any longer non-declarant. Consequently, from this moment and during the entire period that taxable person remains in passive register, no penalties are imposed for this person for non-declaration for all kinds of tax liabilities and contributions social and health insurances. Non-imposing of penalties does not include the last period of 12 months before transfer into passive register. For all this period and for every other period before this, possible unpaid taxation liabilities, including each penalty or overdue interests remain in force and all measures are taken to collect them by force as provided for in law and this Guideline. Likewise, for this period and for each other period before that, regional taxation directorate may make taxation assessments at any time for taxable person transferred into passive register. 44.1.4 After taxable person is transferred into passive register, he will be under supervision of tax administration. Supervision in this case means verification of customs data, possible data from controls exercised in other entities, data of possible verifications in place, etc. Taxable person is notified immediately for peace and notification is accompanied by relevant Tax Assessment-Notification. If it appears from these data that taxpayer has made activity, he is transferred into active register of taxable persons and against him all proper legal measures are taken. 44.1.5 Transfer into passive register of National Registration Centre, according to procedure set in Law “On National Registration Centre”, is not a condition for transfer of this person to passive register of tax administration for taxation effect and, according to its procedures, Regional Taxation Directorate applies the same rules set above in this Guideline for taxable persons transferred into passive register of National Registration Centre. 44.1.6 The same rules for transfer from active register into passive register are valid also for non- profit organizations, foundations, projects implementation units, public national and local entities, political organizations and other bodies similar to them. 44.2 In cases when suspension of activity is declared by taxpayer, regional directorate of jurisdiction makes the transfer into passive register in accordance with provisions of point 44.1 above. 44.3 Regional taxation directorate of jurisdiction notifies taxable person in writing for transfer into passive register within 10 days from date of his transfer into this register, reminding taxpayer also of his obligation to notify immediate tax administration immediately and make application for transfer into active register if taxpayer will restart his activity. 44.4 Transfer of taxation registration from active register into passive register does not eliminate existing taxation liability and does not prohibit tax administration for assessment and collection of taxation liability after transfer into passive register. 44.5 Taxable persons transferred into passive register at any time have the right and obligation to require to be transferred into active register if they will continue the activity. The application is submitted to regional taxation directorate where the person is registered and this is associated with necessary explanations for restart of activity and with all payments of possible unpaid tax liabilities, including here also each penalty or overdue interests. Transfer into active register may be made also by tax administration when the latter has identified the restart of activity. The transfer into active register is made within 10 days from the date that application is received by regional taxation directorate of jurisdiction, or when the latter has identified the activity restart. 45. Cancellation of taxation registration 45.1. Cancellation of registration of taxable persons who carry out economic and commercial activity 45.1.1. Taxable persons exercising economic and commercial activity are cancelled from registration according to provisions of Law “On National Registration Centre”. Taxable person, who wishes to have registration cancelled for whatever reason, is obliged to pay in advance all outstanding tax liabilities and submit the balance sheet of closed activity to taxation directorate in which he is registered. Application for registration cancellation is submitted to National Registration Centre, according to procedures provided for in Law “On National Registration Centre”. The latter notifies relevant regional taxation directorate of relevant jurisdiction for registration of opened liquidation procedure for legal entities that required to cancel registration and opened procedure of registration cancellation of natural persons. 45.1.2 Within 30 days from reception of notification for starting registration cancellation procedures for taxable person, regional taxation directorate of relevant jurisdiction makes all needed verifications regarding taxation situation of this person. Verification includes all kinds of tax liabilities of taxable person including contributions of social and health insurances and eventual penalties and overdue interests related to these liabilities. In addition to verification of taxation situation of taxable person, when Regional taxation directorate deems it necessary may exercise taxation control in premises where the person exercises his economic and commercial activity. 45.1.3 If these verifications or controls in place show that taxable person has outstanding liabilities, penalties and overdue interests or tax statements that he has not submitted, regional taxation directorate should present its written objection to registration cancellation of the person. Regional taxation directorate of jurisdiction includes amount of outstanding tax liabilities or taxation statements that are not submitted in objection to registration cancellation. If written objection submitted by regional taxation directorate does not contain amount of outstanding tax liabilities for the taxable person, National Registration Centre may cancel registration of this person. 45.1.4 Regional taxation directorate is obliged to withdraw its objection at any time, as soon as taxable person pays outstanding tax liabilities, penalties and overdue interests. After withdrawal of objection from regional taxation directorate, and within five calendar days from date of objection withdrawal National Registration Centre cancels registration of taxable person. National Registration Centre does the same even when regional taxation directorate does not withdraw the objection, though taxable person has paid all outstanding tax liabilities, penalties and overdue interests and for this the person submits to National Registration Centre the document certifying payments of outstanding liabilities. 45.1.5 Regional taxation directorate does not undertake any concrete action if after verification of taxable person’s situation, it appears that there are no outstanding taxation liabilities. This means that regional taxation directorate agrees with the continuation of cancellation procedures on the part of National Registration Centre. The same effect has the case when, for various reasons, regional taxation directorate does not manage to submit its objection for cancellation within 30 days from date of notification for commencement of procedures for registration cancellation received from National Registration Centre, though the person might have outstanding taxation liabilities, penalties and overdue interests. In this case regional taxation directorate has the responsibility, the director of which finds personal responsibility of taxation employees and proposes disciplinary, legal or criminal measures against them. National Registration Centre notifies regional taxation directorate of relevant jurisdiction for each cancellation of taxable persons. 45.2 Registration cancellation of non-profit organizations 45.2.1. Non-profit organization, foundation, projects implementation units, national or local public entity, political organizations and other similar bodies, which carry out different activities are cancelled according to provisions of Law. Non-profit organization which is willing to be cancelled, for whatever reason, is obliged to pay in advance all outstanding tax liabilities and submits the balance of closed economic activity to regional taxation directorate where it is registered. Application for cancellation of registration is submitted to relevant court, according to relevant legal procedures. The court for her part, notifies regional taxation directorate of relevant jurisdiction, for registration of procedure opened for registration cancellation. 45.2.2. Within 30 days from reception of notification for start of registration cancellation procedures, regional taxation directorate of relevant jurisdiction makes all necessary verifications regarding taxation situation of non-profit organization which is willing to be cancelled. Verification includes all tax liabilities of non-profit organization, liabilities for contributions of eventual social and health insurances, penalties and overdue interests related to these liabilities. In addition to taxation verification of taxation situation of taxable person, when regional taxation directorate deems it necessary, it may exercise taxation control in premises where non-profit organization exercises its economic and commercial activity. 45.2.3 If these verifications or controls in place show that non-profit organization has outstanding liabilities, penalties and overdue interests or tax statements not submitted (taxation statements on personal income from salaries and statements of contributions of social and health insurances), regional taxation directorate should submit its written objection to the court for registration cancellation of this non-profit organization. Objection to registration cancellation of non-profit organization, submitted to the court by regional taxation directorate of jurisdiction contains the amount of outstanding tax liabilities or tax statements that are not submitted. If written objection submitted by regional taxation directorate does not contain the amount of outstanding tax liabilities of non-profit organization, the court of jurisdiction may cancel its registration. 45.2.4 Regional taxation directorate is obliged to withdraw its objection at any time, as soon as non-profit organization pays outstanding tax liabilities, penalties and overdue interests. After withdrawal of objection from regional taxation directorate, and within five calendar days from date of objection withdrawal the Court cancels registration of non-profit organization. The Court does the same even when regional taxation directorate does not withdraw the objection, though non-profit organization has paid all outstanding tax liabilities, penalties and overdue interests and for this it submitted to the Court the document certifying payments of outstanding liabilities. 45.2.5 If after verification of non-profit organization’s situation, it appears that there are no outstanding taxation liabilities regional taxation directorate does not undertake any concrete action. This means that regional taxation directorate agrees with the continuation of cancellation procedures by the Court. The same effect has the case when, for various reasons, regional taxation directorate does not manage to submit its objection for cancellation within 30 days from date of notification for commencement of procedures for registration cancellation received from this Court, though non-profit organization might have outstanding taxation liabilities, penalties and overdue interests. In this case regional taxation directorate has the responsibility, the director of which finds personal responsibility of taxation employees and proposes disciplinary, legal or criminal measures against them. Relevant court notifies regional taxation directorate of relevant jurisdiction for each cancellation of taxable persons. 45.3 Taxation effects of registration cancellation 45.3.1 After registration cancellation, cancelled taxable person or non-profit organization hands over the Registration Certificate, respectively to National Registration Centre and to regional taxation directorate of jurisdiction. 45.3.2 Eventual outstanding liabilities including each penalty or overdue interests for the period before registration cancellation remain in force and all coercive measures provided for by law and in this Guideline continue to be undertaken for their collection. Likewise, when there are pieces of information that taxpayer has exercised the activity during this period, and after making the necessary taxation verifications and controls, regional directorate takes relevant measures for implementation of legislation in force. CHAPTER VI DATA KEEPING 46. Documentation and keeping of accounts for taxation purposes 46.1 Taxable person is obliged to keep records and use taxation documentation in accordance with tax legislation provisions. 46.1.1 A taxable person exercising economic and commercial activity, being subject of value added tax or profit tax, is obliged to issue VAT invoices regarding the supply for each taxable person who receives the supply. Taxable person who receives the supply may be another taxable person, subject to value added tax or profit tax, taxable person, subject to local tax on small business and a non-profit organization, foundation, project implementation unit, national or local public entity, political organization or any other body similar to them. Form and content of VAT invoice is provided for in Law “On VAT” and Guideline of Minister of Finance for implementation of this law. 46.1.2 Taxable person, retailer, subject to value added tax or profit tax, in addition to tax coupon, is obliged to issue also VAT invoice, when value of each supply made for the purchaser, regardless of the latter’s status, is bigger than 20 thousand lek, including VAT. It is compulsory to write name, second name and address of purchaser for every such supply made for individual, non-commercial consumers, in the invoice issued by the seller. 46.1.3 Taxable person, retailer, subject to value added tax or profit tax in addition to tax receipt, is obliged to issue VAT invoice, regardless of supplied value, in cases when supply receiver is a taxable person and requires tax invoice for business needs. 46.1.4 Taxable person, retailer, subject to value added tax or profit tax, is obliged to issue VAT invoice for every goods supply or services supply made for non-profit organizations, foundations, projects implementation units, public national a local entities, political organizations or other bodies similar to them, which exercise various activities. 46.1.5 Tax receipt is issued by all taxable persons, retailers, subject to value added tax, who, according to Decree of Council of Ministers No. 781 of 14.11.2007, are obliged to have cash register. Decree of Council of Ministers No. 781 of 14.11.2007 provides for the form and content of tax receipt. 46.1.6 Tax receipt is issued by all taxable persons, retailers, subject to value added tax, or profit tax, who do not have the cash register according to Decree of Council of Ministers No. 781 of 14.11.2007 may not the issue tax receipts in special cases. Tax receipt role may be played by other documents approved in other laws or bylaws in force, for example tickets of passengers urban, interurban or international transport, receipts issued by fortune games electronic machines, fortune game tickets approved by an Ministry of Economy, Trade and Energy, etc. 46.1.7 Tax coupon and tax receipt may not serve as justifying documents for deductible business expenditures for purchaser, save the case when tax coupon is accompanied by a VAT invoice. 46.1.8 When supplies are received by different individuals that do not have the quality of trader, taxable person may issue for himself a tax invoice in accordance with provisions of point 53 of this Guideline. This invoice should be certified by supplying individual with his signature and other identification data like name, second name, passport number, etc. Taxable person, subject to value added tax and profit tax, receiver of supply is obliged to note on the invoice prepared for himself also his identification number. Invoice issued as above by purchaser, taxable person as subject to value added tax or profit tax, is document testifying deductible business expenditures for calculation of profit tax. 46.1.9 For each internal movement of goods from warehouse to warehouse, from warehouse to shop and vice-versa, from centre to subsidiary, from place of production to warehouses, from place of production to shop, etc., taxable person is obliged to issue the goods accompanying invoice. Goods accompanying invoice is issued also in the case of ambulatory sales. In this case, when goods are moved from warehouse of seller or from his place of production with his transport means, by which ambulatory sales shall be conducted, taxable person, subject of value added tax and profit tax, issues and invoice to accompany the goods. Whereas at the moment of realization of each ambulatory sale of goods, taxable person issues VAT invoice for purchaser. 46.1.10 Customs declaration of imports issued by customs administration, accompanied by invoice issued by foreign goods supplier shall serve as a document for movement of goods, for goods imported from abroad transported from customs where goods will be cleared towards the warehouse of taxable person importing taxable person. When big supplies, where movement of goods from customs to warehouse or from warehouses of importing taxable person requires some means and transport cargos, as a document for movement of goods shall serve a document accompanying goods as accompanying invoice when issued by importer for each transport means and for each cargo or a document issued by shipment agency or customs agency for each transport means together with a copy of import customs declaration and invoice issued by foreign goods supplier. 46.1.11 During exercise of activity for which they are created, non-profit organizations, foundations, projects implementation units, public national and local entities, political organizations and other bodies similar to them may exercise goods or services supply and take payments for various reasons. In these cases they issue simple tax invoice, with exception of cases when based on tax legislation in force, they are obliged to issue VAT invoice. 46.2 Taxpayer, subject to VAT, registers all transactions and financial actions and prepares and keeps books and accounting registers, in which the following, but not limited only with them, are registered: a) daily sales of goods or conduct of taxable works and services, including amount of each action and amount of charged tax; b) completed works or services, but not yet invoiced; c) non-taxable transactions; ç) payments for goods and services, including amount of each purchase for payments, amounts of paid tax and supplier’s name and address; d) collections and payments. 47. Documentation and keeping of data from taxpayer of small business 47.1.1 When a taxable person, subject to local tax on small business and income tax, makes the supply of goods and services, at the time of supply, is obliged to issue a simple tax invoice regarding that supply for each taxable person receiving the supply. Law “On Local Tax on Small Business” and guideline for this law implementation provides for the form and content of simple tax invoice. For purchaser, taxable person, subject of whatever tax, this invoice serves as a justifying document for deductible business expenditures. 47.1.2 Taxable person, subject to local tax on small business and income tax is obliged to issue a simple tax invoice for each supply of goods and services made for non-profit organizations, foundations, projects implementation units, public national and local entities, political organizations and other bodies similar to them, who exercise different activities. 47.1.3 Taxable person, retailer, subject of local tax on small business and income tax, for each sale in retail units, made for individuals, final consumers, is obliged to issue tax coupon with cash register in absence of taxation receipt. 47.1.4 Tax coupon is issued by all taxable persons, subject to local tax on small business and income tax, which according to Decree of Council of Ministers No. 781 of 14.11.2007, are obliged to be provided with cash register. Decree of Council of Ministers No. 781 of 14.11.2007 provides for form and content of tax coupon. 47.1.5 Tax receipt is issued by all taxable persons, retailers, subject to local tax on small business and income tax, are provided with cash register, not obliged to be supplied with cash register according to Decree of Council of Ministers No.781 of 14.11.2007 or cash registers of which for whatever reason are not in working condition. Role of tax receipt may be played also by other documents approved with other laws and bylaws, as for example tickets of passengers transport. 47.1.6 Tax coupon issued by cash register and tax receipt cannot serve as justifying documents for business deductible expenditures for purchaser, save the case when tax coupon is associated also with a simple tax invoice. 47.1.7 Taxable person, subject to local tax on small business and income tax, for each internal movement of goods from warehouse to warehouse, from warehouse to shop and vice versa, from place of production to warehouse or from place of production to shop, is obliged to issue goods associating invoice. Movement of goods imported from abroad shall be regulated by above point 46.1.10 of this Guideline. 48. Duration of documentation maintenance 48.1 Taxpayer is obliged to keep registers, books and electronic files or manuals containing financial information entered chronologically and systematically for commercial and business actions of taxpayers, in accordance with legislation on accounting and tax legislation. 48.2 Pursuant to point 2 of article 48 of Law, financial and accounting data and information are kept by taxable persons for at least 5 years, starting from the end of exercise year, to which documents belong. Basic documentation, as VAT invoices and simple tax invoices, registers and all records made in these registers, accounting books and all records made in these books, which are kept as provided for by Law “On Accounting and Financial Statements”, financial reports, groups of sale and groups of purchase, which are kept as provided for by Law “On VAT and Guideline for its implementation, are preserved for at least 5 years, starting from the end of exercise year in which they are issued. This means that tax invoice issued in January of 2003 should be preserved until 31 December 2008. 49. Tax invoices 49.1 Tax invoices are considered VAT invoices, issued by taxable persons , subject to value added tax or profit tax and simple tax invoice, issued by taxable persons, subject to local tax on small business and income tax, and non-profit organizations, foundations, budgetary institutions, etc. Tax invoices is prepared in no less than two copies. When supplier of goods or services deems it necessary or when provisions e tax legislation require it, invoice is issued in more than two copies. The original copy of sale tax invoice is always received and preserved by purchaser, because only the original gives him the right to be credited for VAT (when applicable) and to justify business deductible expenditures for profit tax or personal income tax. When original sale invoice is lost, in order to recognize business deductible expenditures, invoice notarized copy may serve, provided it appears to have been declared by seller according to verification. 49.2 Tax invoices for sale of things or execution of works or supply of services are basic documents on which further registrations are based for calculation of taxation liability. 49.3 Tax invoice contains ordinal number, serial number, taxpayer’s identification number and place of issue, name and address of transport parties, carrier’s name, name of goods or services, price per unit (if applicable) and complete value of sale and if applicable, other increases or deductions applied and total amount, whichever the manner of liquidation of invoice is. 50. VAT invoice 50. VAT invoice 50.1 Law No. 7928 of 27.4.1995 “On Value Added Tax”, amended, and relevant guideline for implementation of that law provides for form and content of VAT invoice. 50.2 Taxable persons, subject to value added tax or profits tax, are obliged to issue VAT invoice for each supply of goods or services. In cases when a taxable person supplies considerable quantities of items at the same time and for the same client and registration of these items in a single invoice is impossible, he may attach to this invoice the list of supplied items, which contains the data of supplier and purchaser, names, units, quantity and value of each item of transaction and signatures of parties. Tax invoice issued in this case contains total value of transaction that is made. 50.3 Tax invoices is not issued for each retail sale when fiscal equipment is used, but taxpayer should issue tax invoice at the end of each business day for all tax coupons issued through the fiscal equipment including (when applicable) tax receipts. 50.4 Movement of goods during transport is associated with original invoice of goods sale or with associating invoice in cases of internal movement of goods or in the case of movement of goods or equipment which are part of a service supply. 50.5 In cases when transport is made with means of seller or purchaser, this fact is noted in the part of the invoice where data are required for carrier and identification data are given for transport means and driver 50.6 Normally, date of issue of invoice is compatible with date of transport departure. In cases when these data do not match, that is, when goods transport is made after date of issue of goods invoice, these facts do not comprise any reason for goods to be blocked or confiscated and goods transportation is not hindered. When it is deemed reasonable, verifications may be made at the seller and/or the purchaser or regional taxation directorate of jurisdictions are informed, which use the information for later verifications or controls. 50.7 In cases, when transport of goods is made by third parties (transport companies), movement of goods is associated with goods sale invoice, which has also data for carrier and date of transport. Carrier has the first copy of VAT invoice during transportation, which is handed over to purchaser; second copy of original invoice is kept by carrier. 50.8 Transport service invoice (which is issued by carrier) should not necessarily keep goods transportation date and should not necessarily accompany movement of goods during transport. Transport service invoice may have reference data of goods sale invoices for which transport service was supplied and invoiced. 50.9 When collection of payment is made before delivery of goods or supply of service, the seller issues an invoice for collection of advance payments (for VAT payment) which is cancelled (deducted) after goods sale invoice is issued. 51. Issue of tax invoice 51.1 Seller issues tax invoice and purchaser should require it at the time sale or works or service is made. Tax invoice is prepared by sender in no less than two copies, one of which is taken by purchaser, whereas the other one is kept by seller. 51.2 Goods sold, transported or bought with no tax document (tax invoice or accompanying invoice) are confiscated in accordance with provisions of article 121 of Law. 51.3 Market value for confiscated goods pursuant to point 1 of article 121 of Law, is defined by regional taxation directorate based on: a) real data of sale prices for those products applied by purchaser and seller; b) real data of sale prices for those products paid by other purchasers; c) real data of sale prices for the same products used by other operators; ç) customs reference prices; d) data found by General Taxation Directorate, by its structures regarding prices; e) Regulation of Minister of Finance No.1 of 11.2.2002 “On Transfer of Prices”. The above criteria are implemented one after the other. That is, the next successive criterion is followed, when there are no data for implementation of precedent criterion. 52. Production and distribution of taxation documents 52.1 Production and distribution of VAT invoice, simple tax invoice, tax receipts and accompanying invoice is made or authorized by General Taxation Directorate. It is binding for these documents to be in the form and content approved by Minister of Finance at the proposal of General Tax Director. 52.2 Relevant decree of Council of Ministers provides for criteria to be met by persons who are licensed for printing and distribution of taxation documentation, printing conditions, information contained, security standards and rules of tax invoices distribution or making the available to taxpayer. 52.3 When printing and distribution service of taxation documents is made by commercial private entities, authorization for printing and distribution of taxation documents is issued by General Taxation Director. 52.4 General Taxation Director is entitled not to allow the use of taxation documents mentioned in point 52.1 above. For this, taxable person, subject to value added tax and profit tax should submit a written application to regional taxation directorate of jurisdiction, in which he argues that his registration system is computerized, able to produce reliably taxation documents with serial number for each taxable transaction and that he has a number of considerable customers. In this case, taxable person submits the model of invoice that he proposes to use. Regional taxation directorates, after verification of whether computer invoice to be issued by taxable person contains all necessary data, written application of the person, together with a short opinion and of it, and sends it to general taxation. Within 30 days from date of reception of application from regional taxation directorate, gives or refuses use of this invoice taxable person notifying in writing regional taxation directorate at the same time. In case of approval, General Taxation Directorate, through regional taxation directorate in which the person is registered, notifies him officially for the range of serial numbers for invoices that he will use in his economic and commercial activity. 52.5 In special cases, by using the same criteria as given in point 52.4 above, General Taxation Director authorizes the use of computer invoices or accompanying invoices and simple tax invoices, depending on the case, for VAT for taxpayers, for taxpayers of small business, non- profit organizations, foundations, projects implementation units, public national and local entities, political organizations and other bodies similar to them. 53. Tax invoices prepared by purchaser 53.1 In case of sales from individuals, who do not have the quality of trader, invoices are prepared by purchaser, exerciser of commercial activity, provided the document contains descriptions and data provided for in this law and to be certified by supplier. The invoice used in this case is tax invoice with serial number that purchaser, commercial entity uses in his activity. Taxable person as receiver of supplies is obliged to note in prepared invoice for himself identification data of seller. Invoice issued as above to purchaser himself, taxable person, is a document which justifies deductible business expenditures for calculation of profit tax For example, a taxpayer, collector of agricultural products, purchases agricultural or animal products from small farmers unregistered in taxation. In this case, purchaser drafts an invoice, in which he appears as a purchaser and gives identification data of individual seller and amount of value of goods purchased by him. VAT invoice or simple tax invoice that the taxpayer uses normally in his business may serve for this purpose depending on the case, in accordance with provisions of this guideline. “Invoice issued by purchaser” is written in these invoices in a visible place. Likewise, a commercial company pays a local or foreign individual (which is not a registered in Albanian taxation bodies) for an occasional consultancy, translation, etc., service, benefiting company drafts an invoice, which contains the note “Invoice issued by purchaser”, with identification data of the individual, service supplier, service value and taxation withheld in source calculated for this service payment. 53.2 Minister of Finance, may stipulate by a guideline, special documents forms, substituting taxation invoice. 54. Fiscal coupon issued by fiscal equipment 54.1 Tax coupon is a document, issued by fiscal equipment or other electronic equipment with printing machine. Decree of Council of Ministers No.781 of 14.11.2007 “On technical and functional characteristics of fiscal equipment, integrated computerized system for periodic transfers, automatic financial statements, communication system for procedure and documentation for their approval, and criteria for provision of authorization to authorize companies for provision of fiscal equipment” and other bylaws for its implementation provide for the form and content of tax coupon. 54.2 Entities obliged to issue tax coupon, should issue also VAT invoice in cases provided for in points 46.1.2 and 46.1.3 of this Guideline. 54.3 Taxable persons, who sell goods for final consumption or offer their services in permanent units opened for public, should install fiscal equipment and issue taxation coupons. Taxation coupon is issued in two copies, one of which is a copy on paper, given to consumer of purchased goods or services and the other remains with the taxable person in control paper roll of cash register. Tax coupon is a document by which proper transparency is realized in relations of each business with customers. 54.4 Coupons of cash register or receipts are not recognized as justifying documents for expenditures made by purchaser who exercises commercial activity, save the case when they are associated by taxation invoice. 54.5 Taxable persons, subject to value added tax or profit tax who sell goods and services by retail, but are not obliged to be provided with cash register or other fiscal equipment and taxable persons, subject to local tax and small business and income tax that sell goods and services by retail which, are not obliged to have cash register or other fiscal equipment, are obliged to issue a tax receipt for each sale. Issue of tax receipt is compulsory in each other case that cash register or other fiscal equipment, for whatever reason, are not in working condition. Tax receipt is issued in two copies, one of which is given to client consumer of purchased goods and services and the other remains in invoice book of taxable person. 55. Obligation to use fiscal equipment Taxable persons , subject to value added tax or profit tax and taxable persons, subject to local tax on small business and income tax, are obliged to be provided with, to use and maintain fiscal equipment in accordance with provisions of Decree of Council of Ministers No. 781 of 14.11.2007 “On technical and functional characteristics of fiscal equipment, integrated computerized system for periodic transfers, automatic financial statements, communication system for procedure and documentation for their approval, and criteria for provision of authorization to authorize companies for provision of fiscal equipment” and other bylaws for its implementation 56. Collection of fiscal equipment data Minister of Finance may decide by special guideline creation and functioning of an automatic system for collection of data recorded in fiscal equipment. 57. Keeping accounting records for taxation purposes 57.1 Taxable persons, subject to value added tax or profits tax are obliged to keep accounts, registrations and registers for all events and actions, including supplies made by them, supplies are received by them from other persons, for all imports coming from abroad and exports for abroad, in accordance with provisions e Law “On accounting and financial statements”, and other acts issued for its implementation. 57.2 For registration of economic and commercial actions related to liabilities taxation, books, registers for documentation are used, provided for in law on value added tax, in law on income tax, in law on excises, in other special taxation laws and in bylaws for their implementation. Registration of economic and commercial operations of taxable person in books and registers is made chronologically and systematically. These records shall serve as a basis for self-assessment and self-declaration of tax liabilities of taxable persons when applicable, in order to define their taxation liability. 57.3 Registers and books from taxable persons may be kept also electronically. Registers kept in electronic format should guarantee at any time complete reflection of economic actions and data for taxation. In this case, taxable person is obliged to allow access of tax administration to each computer where books and registers are kept. 57.4 Records made in memory of fiscal equipment or electronic equipment serve as a register for identification of sales by retail made by taxable persons. Daily turnover memorized in this equipment is entered every day with a single figure in sales book. The same thing is done also for retail sales documented by taxation receipts. Total turnover realized according to taxation receipts issued in a day are entered with a single figure in sales book. 57.5 Taxable persons, subject to local tax on small business and personal income tax, calculation of taxation liability keep registers, books and other documents, and issue a simple taxation invoices, taxation receipts and taxation coupons, in accordance with Law “On Local Tax on Small Business” and common Guideline of Minister of Finance and Minister of Interior for its implementation. These persons are obliged to keep the sales book (turnover) and purchases book, in which they register the sales and purchases of the day, chronologically everyday. These records shall serve as a basis for self-assessment and self-declaration of tax liabilities of taxable persons or, depending on the case, for definition of taxation liability. 58. Documentation of goods 58.1 All taxable persons, subject to value added tax or profit tax and taxable persons, subject to local tax on small business and personal income tax are obliged to justify by necessary taxation document, goods in stock in each business place, goods in transport or goods in use for whatever reason. Necessary taxation document proving ownership or control on goods in stock and in use is VAT invoice, simple taxation invoice and production documentation. Whereas necessary taxation document, proving ownership or control of goods during transport, is VAT invoice, simple taxation invoice or invoice for accompanying goods, in cases when transported goods are not destined for sale but for internal movement, as provided for in above point 46.1.9 and 46.1.10 of this guideline. 58.2 When controls exercised by authorized structures of tax administration, identify that required legal documentation is missing, relevant minutes are kept and goods are confiscated in accordance with provisions of article 121 of Law. Confiscated goods are administered in accordance with legislation in force. In case of general confiscations and especially in case of confiscation of goods which can be spoiled, as food, fruits-vegetables, agricultural products and animal products, etc., or which have a close expiry date, repurchase in their value may applied by taxable person. For this purpose, control group submits relevant minutes to Director of Regional Tax Directorate of jurisdiction, where violation is made, within 12 hours from its completion. Director of Regional Directorate within 24 hours issues assessment for confiscated goods in lek. This assessment is made by a permanent commission of regional taxation directorate composed of no less than 4 employees. Provisions of point 51.3 of this Guideline are applied for assessment of goods value. 58.3 Decision for assessment of confiscated goods is given to relevant taxpayers who should pay the liability within the first business day after its reception. Payment is made to the account of regional tax directorate of jurisdiction. Confiscated goods are released only after payment receipt with their value is handed over. A document copy of payment for confiscated goods value shall be filed in confiscation documentation. 59. Payments in cash 59.1.1 Pursuant to point 1 of article 59 of Law, taxable persons cannot make sales and purchases transactions between them in cash, when value of each transaction is bigger than 300 thousand lek. Transactions made in cash and not through liquidating account of purchaser to liquidating account of seller for sales and purchases which exceed the value of 300 thousand lek, comprise violation for the seller and for the purchaser and are punished according to article 120 of Law with a penalty 10 percent of value of each transaction made in cash. It is considered violation of point 1 of article 59 of Law and sanctions provided for in its article 120 are applied and when applied intentionally to avoid liquidation of liabilities through banking channels, taxable persons, seller and purchaser, fraction or divide in some invoices the supply or transaction made, which in normal conditions of unrelated persons would be a single transaction. 59.1.2 In order to verify whether division in many invoices of a transaction is made with the purpose to avoid payments through bank accounts and to establish cases of fractioning or division of an invoice, which normally a should be considered as a single one, tax administration analyses carefully the transaction form and the possibility that it is fractioned intentionally to avoid payment through liquidating bank accounts, taking into consideration such factors as: a) Nature and functions of supply component parts, which are fractioned in some invoices, b) Capacity of vehicle with which fractioned supplies are transported (for example with a 25 ton truck the seller may make some supplies, each with the weight of 2-3 ton, issuing not one but some invoices with a value below 1 million lek). 59.2 Exposure of prices 59.2.1 Pursuant to point 2 of article 59 of Law, taxable persons, who make supplies of goods or services, are obliged to expose sales prices of goods or services they supply regardless of nature of supply and status of purchaser. This provision is compulsory for all taxable persons, for those who supply goods or services by retail and those who make supply of goods or services by wholesale, regardless of whether they are taxable persons, subject to value added tax and profit tax or taxable persons subject to local tax on small business and personal income tax. Taxable persons who sell goods or services by retail are obliged to expose the price of each goods or service that they offer evidently with a label. Whereas taxable persons who supply wholesale goods or services are obliged to expose evidently in the place of supply, the list of prices of goods and services that they offer for supply. The list is made available to tax administration whenever the latter requires such a thing on occasion of verification or taxation control in place. 59.2.2 All taxable persons, subject to whatever kind of tax, exercising at the same time commercial activity of wholesale for other taxable persons and retail for individual final consumers, are obliged to organize these activities in separate places, divided from each other. This means that a taxable person, in a permanent unit of sale retail (shop) may not carry out in these units wholesale as well. Likewise, a taxable person who makes wholesale (for other taxable persons) directly from his warehouses or from his other business place cannot carry out from his warehouses or other business places sales by retail for individual final consumers. Retail sales are considered all those supplies made: a) for final consumption; b) in those quantities which do not exceed normal private needs of consumer; and c) which are not destined for resale. 60. Obligation of taxpayers to give information to tax administration and allow access to premises of economic activity 60.1.1 Taxpayer makes available to tax administration books, records, information and necessary documents for calculation of their precise taxation liabilities. 60.1.2 Taxable person, subject to whatever kind of taxation liability which does not pay the liabilities provided for in this guideline point, is penalized according to article 126 of Law, for refusal to give information required by tax administration. 60.2.1 Tax administration, is entitled to have access to each environment of place where taxable person exercises his economic and commercial activity. Access to each environment of taxable person is allowed only during business hours. In order to have access to each environment or place where taxable person exercises his economic, commercial activity, authorized person of tax administration, should submit the written authorization for access (daily working order) or the notice for control, signed by Director of Regional Directorate. 60.2.2 Tax administration authorized person accessing environments or places where taxable person exercises his economic and commercial activity may inspect and control operation of computers, cash register or other electronic equipment in environments of the person, and may receive copies of each accounts, registration or other information in these pieces of equipment. 60.2.3 Taxable persons , subject to whatever kind of taxes and duties during taxation control of tax administration, are obliged to make available to the latter each document, each book, each register and each registration and each other data required by it, necessary to make the precise calculation of tax liabilities for the person. 60.3.1 In the exercise of taxation control, tax administration has the right to require from taxable person additional explanations and information as well. Additional explanations and information may be required by tax administration in different ways, by sending, written questionnaires to taxpayer, by written requests to give documents, books, registers, to complete different data for economic activity, commercial transactions, financial operations made by taxable person with other third parties, etc. In these cases, taxable person is obliged to give additional explanations for information required orally or in writing within 20 days from date of posting of written request of tax administration or date of delivery of this request to electronic post of the person. 60.3.2 In the exercise of a taxation control, tax administration is entitled also to require meeting, with representatives of taxable person within business hours, from whom it requires additional explanations and information. Representatives of taxable person are obliged to respond to questions of employees of tax administration and give every additional datum that they require. 61. Obligation of third parties to give information 61.1.1 In the exercise of its functions and in exercise of control for a taxable person, tax administration may need to have other additional information from third sources for the person. In this case, tax administration, has the right to address in writing to each third party that has business relations and has entered into commercial and financial transactions with the taxable person to require information, documents, books or records relating to the person. Additional information may be required in different forms by tax administration by sending, written questionnaires to third party, by written requests to give documents, books, registers, to complete different data related to relations of the third person with taxable person. In these cases, the third person is obliged to give additional documents, and records, explanations or information required, orally or in writing within 30 days from date of posting of written request of tax administration or date of delivery of this request to electronic post of third person. 61.1.2 In the framework of taxation control for a taxable person or in the framework of performance of every other function, tax administration is entitled also to require in writing to meet within the business working hours in premises of economic activity of the third party or in tax administration premises with a representative of a third party, in order to require additional explanations and information. Representatives of taxable person are obliged to respond to questions of employees of tax administration and give every additional datum that they require. 61.2 Each third person related to taxable person or who has information and data for him but does not meet obligations stipulated in this point of guideline, is penalized according to article 126 of Law, refusal to give the information required by tax administration. 62. Persons to whom request to give information is addressed 62.1. Third persons, who are obliged to give information, documents, books, records or explanations for taxable persons, orally or in writing, within 30 days from date of posting of written request of tax administration or from date of delivery of this request to electronic post of third person, are the persons listed in points 62.2 – 62.12 consecutively. 62.2 All taxable persons, for dividends paid to shareholders or for profit parts distributed to partners, for commercial and financial transactions made with other taxable persons, for payments made for their subcontractors, for payments received as subcontractors of another person, for debtors and creditors. 62.3 In reply to a written request, banks and financial institutions are obliged to submit to tax administration all data owned for taxable persons. 62.4 Brokerage companies or companies of collective investments funds, for transactions and titles. 62.5 Immovable property agents for actions against customers. 62.6 Purchasers and sellers of immovable property for description, location, characteristics and price of immovable property. 62.7 Notaries, for notarial deeds, for purchase and sale of immovable and movable property or undertaking contracts. 62.8 Resident and non-resident legal persons, for payments made to non-resident persons. 62.9 State institutions and employees of State administration. It includes such institutions as general customs directorate and its regional branches, Treasury Directorate and its regional branches registration office of immovable properties, local government units (municipalities and communes), etc. These State institutions act as follows: a) General Customs Directorate is obliged to send officially each month (with no request) to General Taxation Directorate, according to provisions made in a Common Agreement, signed between both General Directorates, analytical data for all taxable persons that made imports and exports during the month. This information should necessarily contain identifying data of taxable person, his commercial name, his identification number, customs value and customs and taxation liabilities not paid in customs. Delivered data are divided for each taxpayer and for each district. Customs Administration is obliged to write identification number of taxable person on clearance paper of imports and on clearance paper of exports pursuant to Registration Certificate, year and place where taxpayer was registered. They are obliged not to allow customs actions for taxable persons who do not submit Registration Certificate as taxable persons and official certificate issued by regional taxation directorate of jurisdiction. Customs regional branches are also obliged to give each information regarding imports and exports of taxable person according to a written request of taxation. b) Treasury Directorate and its regional branches are obliged to send each month officially (with no request) to respective regional taxation directorate, according to provisions made in a Common Agreement signed between both directorates, analytical information for all taxable persons who have received funding from State budget, to execute different works or services or to supply goods for a State institutions. These pieces of information should contain all identification data for taxable benefiting person, as his commercial name, identification number, address, funded amount, etc. c) Immovable Property Registration Offices are obliged to send to regional taxation directorates, at a written request of the latter, property registration acts of taxable person, which contain the kind of property that is alienated, name of owner, tax paid and relevant value of sold or alienated property. Property registration acts for taxable person, which contain the kind of property that is eliminated, name of seller, paid tax and relevant value of sold or alienated property. These acts contain cases of transfer of property through sale, donation and property inheritance. ç) Local government units are obliged to send to respective regional taxation directorate, according to a written request of the latter, analytical information for all taxable persons who have received funding from their budgets to carry out different works or services or to supply goods for local institutions. These pieces of information should contain identification data for taxable person benefiting, commercial name, identification number, address, funded amount, etc. Local government units are also obliged to give information, at a written request of relevant regional taxation directorate, for all taxable persons registered in their jurisdiction. 62.10 Other contractors of taxpayers for economic and financial transactions that they have with taxpayer. 62.11 Donors, international organizations, non-profit organizations, foundations, budgetary institutions, etc., for payments made to taxpayer for supply of goods and services. 62.12 When their system of records keeping is computerized, all the above third parties are obliged to give information required by tax administration electronically. 63. Exemption from obligation to give information 63.1 The following persons have the right to refuse to give information in case of taxation investigation from taxation administration bodies: a) family members of taxpayers; b) lawyers, notaries, taxation advisers, doctors and medical personnel for the information they have acquired during normal professional activity. 63.2 Persons mentioned in point 1 above, except for taxpayers, are not obliged to give information to tax administration bodies when this information may expose them as first degree family members for criminal prosecution. In this case, tax administration should notify the taxpayer for the right of these persons to refuse to give information, a notification which should be registered and signed by the person concerned. CHAPTER VII TAX STATEMENT 64. Method of declaration, deadlines and place of submission of tax statements 64.1. For tax liabilities, which according to special taxation laws, are self-assessed and self- declared, for contributions of social and health insurances that are also self-declared according to relevant Law, taxable persons, declare and pay tax liabilities in accordance with those provisions. 64.2.1 According to kind of tax liabilities and contributions of social and health insurances and according to categories of taxable persons, each special taxation law provides for taxation periods. So, for taxable persons, subject to value added tax and profit tax, taxation periods are monthly for: VAT, tax on personal income from employment, for excise, for fortune games and for contributions of social and health insurances and they are annual for profit tax. Whereas for taxable persons, subject to local tax, on small business and tax on personal income, taxation periods are trimestral for all kinds of tax liabilities and contributions for social insurance and they are annual for tax on income from business. 64.2.2 Taxable persons interrupt declaration only after they have received confirmation from National Registration Centre for their registration cancellation from commercial register or confirmation by tax administration that they are transferred into passive register of taxable persons. Interruption of obligation for declaration enters into force depending on the case, in the first month, trimester, or year after date of registration cancellation or after transfer into passive register. So, a taxable person , subject to value added tax and profit tax, receiving a confirmation from National Registration Centre that registration cancellation has entered into force on 20 October 2008, shall interrupt submission of his monthly statements for VAT, personal income tax, contributions e social and health insurances, for taxation period November 2008 and on, whereas for profit tax starting from taxation period 2009 and on (after submission of taxation statements on profit for 2008). 64.3 Forms of declaration of every kind of tax and of contributions of social and health insurances and other accompanying forms of statement that taxable persons should submit for each taxation period, are made available to the latter without payment by tax administration. Tax administration realizes this as follows: a) by offering the possibility to taxable persons to declare and/or pay electronically taxation liabilities, through official website of General Taxation Directorate www.tatime.gov.al, b) by offering the possibility to taxable persons to download and print their taxation statements from official web site of General Taxation Directorate www.tatime.gov.al, c) by making tax statements available to taxable persons through receptions of service offices for taxable persons , ç) by sending them to person’s address by registered post service. In this case, taxable person should make a written request to regional taxation directorate, submission of which shall mean that the person has undertaken the liability of arrival in time and proper address of tax statements sent by registered mail. 64.4 Form and content of each taxation statement, for each kind of tax and for contributions of social and health insurances, and their change is approved by Minister of Finance, pursuant to tax legislation and legislation for contributions of social and health insurances. Together with taxation statements, taxable persons are obliged to submit to tax administration every other document required in guidelines of Minister of Finance, pursuant to special taxation laws. In addition to these, when deemed necessary to improve and facilitate tax administration, point 4 of article 64 of Law gives to Minister of Finance the authority to decide or change the form and content of tax statements and other taxation documents. 65. Submission of tax statements 65.1.1 Statement form is completed in two copies, one of which is for tax administration and one for taxable person himself. Taxable persons may submit the tax statement to tax administration: a) by postal service, with which General Taxation Directorate has signed a bilateral cooperation agreement. In this case, the statement is taken or considered to have been taken by taxation administration on the seventh date after sending date. So, if statement was admitted by postal service on date 1 of the month, it is considered to have been received by tax administration on date 8 of the month; b) by submitting it to every bank or other financial institution with which General Taxation Directorate has signed a bilateral cooperation agreement. In this case, statement is considered submitted on the day when it arrives at the bank and the latter affixes the dated seal on both statement copies. After returning one sealed copy of the statement to taxable person, the bank at the end of each new business day collects second copies of statements and hands them over to tax administration for processing, as provided for in common agreements signed between General Taxation Directorate and relevant banks; c) through electronic statements in taxation electronic statements system through the Internet in the web site of General Taxation Directorate www.tatime.gov.al. ç) in the case of electronic declaration, taxation statements are considered submitted, on sending date of statements completed by taxpayers. Burden of proof for sending the statements falls on taxpayer. 65.1.2 Taxable person submits tax statements of each tax and contributions of social and health insurances and if he has not paid taxation liability or contributions for taxation period, because his liability might be zero or because he might have not exercised activity during that taxation period. Precise completion of statement, submission and payment within time limits is a legal obligation for all taxable persons. Failure to meet this obligation charges taxable person with legal responsibility and is punished pursuant to Law and this Guideline. 65.2 Taxation statements are completed and sent in accordance with provisions of this Guideline and other guidelines for implementation of tax legislation. 65.3 In the cases when deadline for submission of statement falls on a holiday, then the deadline is calculated the first business day, after the holiday. So, for example, if date 14 of the month falls on Sunday and Saturday of this month, deadline for submission of VAT statement for taxable person is considered date 16 of the month (that is, Monday as the first day after Saturday and Sunday as holidays). 65.4 Taxpayer or his representative sign taxation statements, they write their taxation identification number and confirm the responsibility that the statement is complete and correct. Statements sent and paid electronically are accepted without formal signature of taxpayers. 65.5 Tax statement is considered submitted if it meets requirements of this law, tax legislation and bylaws issued for its implementation. 66. Extension of statement deadline 66.1 When it is not possible for a taxable person to submit his taxation statement in time, he pays the taxation liability and notifies regional taxation directorate of jurisdiction for extension of this statement submission deadline. Notification to regional taxation directorate should contain the reasons for impossibility of statement submission and it should be received by regional taxation directorate within the last day of statement deadline. Notification is made for each statement separately. After sending the notification for impossibility of submission of taxation statement in time, deadline for this statement submission to regional taxation branch is extended for 30 days, with no need to receive the consent or confirmation of taxation regional branch. Calculation of 30 days starts from the last day of legal statement deadline, regardless of whether it may happen to be an official holiday. Penalty measure is not applied for non-declaration in time within extended deadline of 30 days for taxable person. 66.2 Extension of submission deadline does not have any impact on deadline of payments of taxation liability and calculation of penalty and overdue interest for delayed payment of taxation liability, which shall result to be unpaid when taxation statement is submitted. 67. Change of taxation statement 67.1 After submission of a taxation statement, taxable person may find that he has completed it incorrectly or has made one or some mistakes while completing taxation statement. Mistakes may be of different kinds. For example, some sale or purchase invoices might have been forgotten to be entered in both sales and purchases and consequently in monthly VAT statement. One or some customs statements may have been forgotten to be entered in the book of purchases. During completion of a statement some mistakes might have been done in calculation, as for example taxable basis is not compatible with calculated VAT, etc. In all these cases, based on article 67 of Law, taxable person may complete a new taxation statement which will change and replace the first statement. 67.2 The new changed taxation statement may be submitted within 12 months from submission deadline of initial taxation statement. 67.3.1 By submitting a new changed taxation statement, additional tax liabilities and overdue interests related to this additional liability are calculated for taxable person, depending on the case, for the entire period from submission deadline of initial statement and making of payments until dates of submission of new changed statement and additional payments. Payment of additional taxation liability and overdue interests related to this additional liability is made according to provision of article 74 of Law and point 10 of this guideline. 67.3.2 By submitting a new changed taxation statement, taxable person depending on the case, may require also the crediting of taxation liability paid in excess and overdue interests that he should benefit regarding this excessive payment for all the period from submission deadline of initial statement and payment until submission date of the new statement. Amount paid in excess together with overdue interests related to it, may be required to pass for the account of other unpaid taxation liabilities when the new changed taxation statements is submitted for the account of future tax liabilities of taxable person. Regardless of the above, taxable person, by submitting the new changed taxation statement, has the right and possibility to require reimbursement of tax amount paid in excess and overdue interests related to this amount. 67.4 For calculation of interest mentioned in point 3 of article 67 of Law, provisions of this Guideline are applied for overdue interests. CHAPTER VIII TAXATION ASSESSMENT 68. Taxation assessment 68.1. Tax liabilities of taxable persons are assessed as provided for in special taxation laws and in accordance with provisions of this guideline and specific taxation guidelines. 68.2 Self-assessment made by taxpayer 68.2.1 If taxpayer is required by tax legislation to submit taxation statements and pay taxation liability, the statement is considered taxation self-assessment made by taxpayer. Calculation, statement and taxation payment are made in the manner and deadline provided for in relevant taxation law. Such are taxation statements on value added tax, on profit tax, contributions for social and health insurances, tax on income from employment, tax on personal income of small business, etc. 68.2.2 Self-assessment and self-declaration is made also for individual income for which no tax is kept in source, including income realized outside the territory of Republic of Albania by an Albanian resident taxable person. In these cases calculation and declaration of taxation liabilities is made by taxpayer in accordance with provisions of Law on income tax. 68.2.3 Payment of taxation liability in advance, which is used in case of advance payments of profit tax during the exercise year and local tax on small business, is also taxation self- assessment. Calculation of instalments of advance payment of profit tax and their payment is based on manner and deadlines provided for in Law “On Income Tax”. Final self-assessment of taxation liability is made when annual statement (profit and loss) of taxable income is submitted. Calculation of trimestral taxation liability of local tax on small business is based on manner provided for in Law “On Local Tax on Small Business”, final assessment of taxation liability is made when annual statement (profit and loss) of taxable income is submitted as provided for in Law “On Income Tax”. 68.3 Assessments made by Tax administration 68.3.1 Tax administration has the authority and obligation to supervise the entire assessment process; it may make taxation liability assessment of taxable person in the following cases: a) when taxation control, made in the place of taxable person, proves that taxation liability declared by the latter is not correct. In this case, tax administration is obliged to proceed with taxation control, according to rules provided for in chapter “Taxation Control” of Law and this guideline . b) when tax administration finds that taxation liability given in taxation statement is incorrect. In this case taxation assessment is based on information that taxpayer’s taxation statement contains or in results of a control, in accordance with Chapter X of Law or in alternative assessment methods, provided for in article 72 of Law. c) when taxable person has not respected the legal obligation to submit taxation statements. In this case, taxation liability assessment of taxpayer by tax administration may be done directly from the office, by using alternative methods of taxation assessment, provided for in article 72 of Law and this guideline. d) when taxable person does not allow access for exercise of authorized taxation control. In this case taxation liability assessment of taxpayer by tax administration may also be done directly from the office, by using alternative methods of taxation assessment, provided for in article 72 of Law and this guideline. 68.3.2 Assessment made by tax administration enters into force 10 calendar days after date when this assessment is received or is considered to have been received by taxpayer. 68.3.3 Burden of proof to prove imprecision of taxation assessments of tax administration falls on taxpayer. 68.3.4 Taxation assessment by tax administration, made from the office in accordance with paragraphs c) and d) of point 68.3.1 above is invalid and is cancelled as soon as taxable person regulates his situation by submitting the missing statement or statements allowing and creating necessary conditions, for exercise of taxation control on the basis of which the new taxation assessment is made. 68.4 Taxation assessment made by agent withholding tax in source If taxation liability is withheld in source by agent withholding tax in source and taxpayer is not subject to requirement to submit taxation statement for tax withheld in source, tax withheld in source is taxation assessment. This method is used chiefly for tax on personal income from salaries and other bonuses, for contributions of social insurance, for overdue interests or for those benefited from securities, dividends, loans and rents, property transfer, copyright and intellectual property, etc., pursuant to provisions of Law No. 8438 of 28.12.1998 “On Income Tax”. 68.5 Amount of taxation liability according to taxation statement or according to notification- assessment with the value up to 1.000 lek, is assessed as liability with zero value and for such amounts no taxation assessment is made by tax administration. 69. Notification of taxation assessment 69.1 Notification of taxation assessment made by tax administration for taxable person should be sent to the person by registered post within 10 days from date of its issue. Date of issue of taxation assessment notification is considered the date of its completion, which is written in relevant entry of assessment notification form. Taxation assessment notification sent by registered mail to address of taxable person is received or is considered to have been received by the latter 7 days after date of delivery by postal service. Taxation assessment notification enters into force 10 calendar days after it is received or it is considered to have been received by taxable person. With the entry into force of taxation assessment notification, the liability rises to pay taxation liability written on assessment notification. Taxable person, who does not agree with taxation assessment notification made by tax administration, has the right to complain about it within 30 days from entry into force of taxation assessment notification. So, for example, if taxation assessment notification is issued on date 1 of the month and it is submitted to registered postal service on date 11, it is received or considered to have been received by taxable person on date 18 of the month. Obligation to pay the amount set in assessment notification starts on the date of entry into force of assessment notification, that is, on date 28 of the month. 69.2 Taxation assessment notification and application for tax payments should contain the following information: a) name and second name of taxpayer natural person, or name of legal entity; b) identification number of taxpayer; c) date of notification; ç) issue, for which notification is made and taxation period or periods notification refers to; d) the amount of assessed tax, overdue interest and penalties; dh) application for tax payment and payment deadline; e) place and method of tax payment; ë) explanation of reason for assessment; f) explanation of rights of taxpayer to complain for assessment. 69.3 Taxation assessment notification is registered and a copy is filed in the file of taxable person within five calendar days from date of its issue. 69.4 Taxable person, who does not agree with the taxation assessment notification, is entitled to complain for it within 30 calendar days from its entry into force. That is, if we refer to example of paragraph 69.1, within date 28 of successive month. 70. Right to issue taxation assessment notification 70.1 Taxation assessment notification is issued by regional taxation directorate under jurisdiction of which is the taxable person and it is signed by director of this directorate. 70.2 Regional tax directorate may make taxation assessments for each kind of taxation liability and contributions of social and health insurances, subject to which are taxable persons under its jurisdiction. 70.3 Taxation offices of local governments issue taxation assessment notification for taxable persons, subject to local tax on small business and for all other taxable persons, subject to local taxes. 71. Right of tax administration to use alternative methods for taxation assessment 71.1 Tax administration is entitled to control precision of assessment of tax liabilities, regardless of taxation assessment method used. Taxation controls can verify precision of taxation statements for profit tax verification, for VAT and for all other kinds of tax liabilities, including employment income tax and contributions of social and health insurance. In conditions and circumstances provided for by law and in this guideline, tax administration is entitled to use alternative methods of assessment of tax liabilities of taxable persons. Their right to use alternative methods to assess tax liabilities is used in the following cases: a) When taxable person, has not declared his tax liabilities for a certain taxation period as provided for in specific taxation laws. So, for example, if a taxable person does not submit the monthly VAT statement, after implementing all preliminary procedures provided for in Law “On VAT” and guideline for its implementation, regional taxation directorate of jurisdiction, has the right to make taxation liability calculation with taxation assessments from the office according to procedures set in relevant working manual. The same way is followed also in cases when taxable person does not submit other taxation statements, as taxable income statement (balance sheet of economic-financial activity) of a certain year, excise statement, statement of tax on personal income, for those categories of income for which statement is obligatory according to relevant Law. In this case, taxation assessments, by using the rules provided for in article 72 of Law, may be made directly from the office, with no need to carry out their control in the place of taxable person. Taxation assessment notification from the office is sent to taxable person with the signature of director of regional taxation branch. Taxation assessment notification made from the office serves also as an appeal to taxable person to submit his taxation statements that he has not submitted. Taxation assessment of tax administration, made from the office is invalid and is cancelled as soon as taxable person regulates his situation, by submitting the missing statement or statements. Cancellation is always associated with implementation of relevant penalties for delayed statements and overdue payments and obligation to pay them. b) When during the taxation control made by regional taxation directorates, it appears that taxable person has submitted one or some tax statements with incorrect or forged data. Taxation assessment using alternative methods is always used in the framework of a taxation control in the place of taxable person. This assessment cannot be made from the office in any case. c) When during a taxation control made by regional taxation branch, proper records and documentation are not found in order to make taxation liability assessment, or when these records and documents have such gaps that they do not allow presentation of real situation of taxable person and calculation of their taxation. This is the situation when, for example, in cases of control of a taxable person, he does not submit documents of transactions made, has not kept correct records, which enable assessment of liability taxation, as provided for in special taxation laws and guidelines for their implementation. We have to do with the same situation when during taxation control it is proved that taxable person has not submitted a part of documentation or records and when documentation and records presented are evidently with defects, are not true and they are not reliable. So, taxation assessment, using alternative methods is always made in the framework of taxation control in the place of taxable person. This assessment cannot be made from the office in any case. ç) When taxable person does not allow access for control taxation assessment is made directly from the office, by using rules provided for in article 72 of Law needing no presence in place of taxable person. Taxation assessment notification from the office is sent to taxable person with the signature of director of regional taxation branch. Taxation assessment of tax administration, made from the office is invalid and is cancelled as soon as taxable person regulates his situation, allowing and creating necessary conditions to exercise taxation control. Cancellation is always associated with implementation of relevant penalties (including punishment for not allowing control) and obligation to pay them. d) when he does not cooperate with taxation control of tax administration and does not make available to control the required information and other necessary documents to calculate his taxation liability. In this case taxation assessment is also made with alternative methods, using the rules set in article 72 of Law. dh) when a taxation control made by regional taxation directorate, finds out that taxable person, makes transactions with related persons not on the basis of market value principle or makes transactions without essential economic effects. In all these cases, tax administration has the right to reassess the transaction, taking into account the real market value for the transaction, in the same way as it would have occurred if this transaction would have been made between two persons that are not related. We have to do with related persons in cases provided for by point “h” of article 5 of Law. Taxation assessment by using alternative methods provided for in point “dh”, of article 71 of Law, is always made in the framework of taxation control in the place of taxable person, considering also provisions of point 51.3 of this Guideline. This assessment cannot be made from the office in any case. e) When during the taxation control made by regional taxation directorate, it is found that taxable person, makes transactions of sale and purchase in cash and when transaction value exceeds the value of 300 thousand lek. In these cases, tax administration has the right to reassess only the transactions in question and not the entire activity of taxable person. Taxation assessment using alternative methods is always made in the framework of taxation control in the place of taxable person, considering also provisions of point 51.3 of this Guideline. This assessment cannot be made from the office in any case. ë) When during taxation control made by regional taxation directorate, it is found that taxable person, has not used fiscal equipment regularly. In these cases, tax administration may reassess the entire volume of retail sales of taxable person which should have been identified by issue of taxation coupons with fiscal equipment. Taxation assessments, using alternative methods set in point “ë”, of article 71 of Law, are always made in the framework of taxation control in the place of taxable person. This assessment cannot be made from the office in any case. 71.2 Application of taxation assessment alternative methods according to letters b), c) and dh) of article 71 of Law is made after a written decision taken by director regional directorate. 72. Basis of alternative taxation assessment methods 72.1 In using alternative methods of taxation assessment, tax administration is based on documentation and information it owns, taking into consideration also the facts and concrete business circumstances with the purpose to characterize again the transactions and calculate more precisely taxation liabilities in accordance with tax legislation in force. The main data on which judgment of tax administration is based, but not limited only on them, are: a) direct data from tax statements of taxpayers or other similar transactions of taxpayers; b) direct data, documentation and information received from third parties; c) data, documentation and information received from similar transactions made by other taxpayers; ç) other indirect data, as consumption of energy, fuel, raw materials, other norms, etc. d) customs reference prices, or information on retail price is owned by General Taxation Directorate . Provisions of point 51.3 of this Guideline are taken into consideration in the use of alternative methods. 72.2 General Taxation Directorate, may sign agreements with specialized business associations, for implementation of alternative assessment methods, when it is necessary and possible to define orientating taxable value on the basis of which assessment of taxation liabilities is made with alternative methods. These agreements are published in tax administration Taxation Bulletin. 72.3 When taxation liability is assessed, which rises from transactions between related persons, alternative method based on market value for those transactions shall be taken as a basis to calculate taxable income. Provisions of point 51.3 of this Guideline are taken into consideration in implementation of this method. 73. Deadline of prescription of right to make taxation assessment 73.1 Right of tax administration to make a taxation assessment is prescribed within 5 years from the last date of submission of taxation statement provided for in relevant tax legislation. 73.2 Prescription deadline, provided for in point 1 of this law, may be terminated when: a) Because of appealing previous assessments, the new assessment is made. In this case, prescription deadline is a later date between: i) prescription deadline provided for in point 1 of this law; ii) 30 calendar days from date of issue of appeals court final decision; b) Because of a taxation control or tax investigation of taxpayer money tax administration, a new assessment is made. In this case, prescription deadline is a later date between: i) prescription deadline provided for in point 1 of this law; ii) 30 calendar days from date of issue of final written decision of taxation control for investigation; c) a criminal case is started against taxpayer for his taxation liabilities. in this case, prescription deadline is a later date between: i) prescription deadline provided for in point 1 of this law; ii) 30 calendar days from date of issue of final court decision for the criminal case.
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