www.pwc.com/taxsummaries Worldwide Tax Summaries Corporate Taxes 2016/17 Quick access to information about corporate tax systems in 155 countries worldwide. Central Asia and Eastern Europe Worldwide Tax Summaries Corporate Taxes 2016/17 All information in this book, unless otherwise stated, is up to date as of 1 June 2016. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Foreword Welcome to the 2016/17 edition of Worldwide Tax Summaries (WWTS), one of the most comprehensive tax guides available. This year’s edition provides detailed information on corporate tax rates and rules in 155 countries worldwide. As governments across the globe are If you have any questions, or need more looking for greater transparency and detailed advice on any aspect of tax, with the increase of cross-border please get in touch with us. The PwC tax activities, tax professionals often need network has member firms throughout access to the current tax rates and other the world, and our specialist networks major tax law features in a wide range can provide both domestic and cross- of countries. The country summaries, border perspectives on today’s critical written by our local PwC tax specialists, tax challenges. A list of some of our key include recent changes in tax legislation network and industry specialists is located as well as key information about income at the back of this book. taxes, residency, income determination, deductions, group taxation, credits and I hope Worldwide Tax Summaries incentives, withholding taxes, indirect continues to be a valuable reference tool taxes, and tax administration. All in helping you manage your organisation’s information in this book, unless otherwise taxes around the world. stated, is up to date as of 1 June 2016. Our online version of the summaries is available at www.pwc.com/taxsummaries. The WWTS website is fully mobile compatible giving you quick and easy access to regularly updated information anytime on your mobile device. Some of the enhanced features available Colm Kelly online include Quick Charts to compare Global Tax Leader rates across jurisdictions, and reference PwC Ireland materials on Organisation for Economic +353 1 792 8943 Co-operation and Development (OECD), [email protected] European Union (EU), and World Trade Organisation (WTO) member countries, amongst other valuable information. www.pwc.com/taxsummaries Foreword 1 Contents Foreword ...............................................1 Global Tax Contacts ....................354 Building trust in society and Country chapters ..............................3 solving important problems ..............355 Central Asia and Eastern Europe............3 Indirect Taxes ...................................357 Albania ..................................................4 International Tax Services ................360 Armenia ............................................. 15 Legal Services ...................................364 Azerbaijan .......................................... 30 Mergers and Acquisitions ..................367 Belarus ............................................... 44 People and Organisation ..................371 Bosnia and Herzegovina ..................... 68 Tax Controversy and Bulgaria ............................................. 91 Dispute Resolution ...........................374 Croatia .............................................107 Tax Policy and Administration ..........377 Georgia ............................................125 Tax Reporting and Strategy ..............379 Kazakhstan .......................................136 Transfer Pricing ................................383 Kyrgyzstan ........................................148 Value Chain Transformation .............386 Macedonia .......................................161 Global Tax Industry Leaders .............388 Moldova ...........................................173 Worldwide Tax Summaries Montenegro .....................................191 Editorial Team ..................................389 Poland ..............................................201 Romania ...........................................222 Russian Federation ...........................253 Serbia ...............................................275 Turkey ..............................................286 Turkmenistan ...................................310 Ukraine ............................................319 Uzbekistan, Republic of ....................341 2 Contents PwC Worldwide Tax Summaries Country chapters Central Asia and Eastern Europe Albania PwC contact A Loreta Peci PricewaterhouseCoopers Audit sh.p.k. Blvd. Deshmoret e Kombit, Twin Towers, Tower 1, 10th floor, Tirana, Albania Tel: +355 4 2290 720 Email: [email protected] Significant developments Corporate income tax (CIT) From 1 January 2016, taxpayers with annual turnover up to 5 million Albanian lek (ALL) are exempt from CIT, whereas those with annual turnover between ALL 5 million and ALL 8 million are subject to a reduced CIT rate of 5%. Tax Certificates If a taxpayer’s financial statements and tax declarations are certified as compliant with the tax legislation by certified auditing companies, the tax administration will include this as a parameter in the taxpayer risk analysis for tax inspection purposes. Taxes on corporate income Albanian law applies the principle of worldwide taxation. Resident entities are taxed on all sources of income in and outside the territory of Albania, while non-resident entities are taxed on income generated only in the territory of Albania. The corporate income tax (CIT) rate in Albania is 15%. CIT is assessed on the taxable profits calculated as taxable income less deductible expenses. From 1 January 2016, taxpayers with annual turnover up to ALL 5 million are exempt from CIT, whereas those with annual turnover between ALL 5 million and ALL 8 million are subject to a reduced CIT rate of 5%. Local income taxes Local taxes on income depend on a number of factors, such as type of activity, municipality where the business is located, and the annual turnover. Consequently, these taxes may vary from ALL 20,000 to ALL 143,000. Corporate residence Based on Albanian legislation, a legal entity is deemed to be resident in Albania if it has its head office or its place of effective management in Albania. Permanent establishment (PE) PE in Albania means a fixed place of business where an entity carries out, wholly or partly, its business activities, including, but not limited to, an administration office, a branch, a factory, a workshop, a mine, and a construction or installation site. The determination of a PE, where applicable, is based on the provisions of the double tax treaties (DTTs) that Albania has entered into with a number of countries. When dealing with DTT provisions, the Albanian tax authorities refer to the Organisation for Economic Co-operation and Development (OECD) commentaries. www.pwc.com/taxsummaries Albania 4 Albania Other taxes Value-added tax (VAT) The standard VAT rate is 20%, and the standard VAT period is the calendar month. Taxable transactions include goods and services supplied domestically as well as goods imported into Albania by a taxable person. The following transactions are also taxable: • Transactions performed for no consideration or for a consideration less than market value (the latter applies if the parties included in the transaction are considered as related parties). • Barter transactions. • The private use of taxable goods by a taxable person (self-supply). Determination of VAT payers ‘Taxable person’ shall mean any person who, despite the legal form of organisation, independently carries out any economic activity, whatever the place and the purpose or results of that activity. The VAT registration threshold in Albania is annual turnover over ALL 5 million. Any person providing taxable supplies and whose annual turnover does not exceed ALL 5 million is not required to register, although voluntary registration is possible. VAT obligations for non-resident entities For a non-taxable person, the place of supply shall be in Albania if the supplier of the non-taxable person has established their business or a PE there. For a taxable person, the place of supply of services shall be in Albania if the taxable person who receives the service has established their business or PE there. Zero-rated goods and services The following goods and services are subject to 0% VAT in Albania: • Exports. • The supply of goods transported in the personal luggage of travellers. • International transport. • Supply of gold for the Bank of Albania. VAT-exempt goods and services The VAT Law provides a list of supplies that are considered as VAT-exempt: • The supply by the public postal services of services, and the supply of goods incidental thereto. • Hospital and medical care and closely related activities. • The provision of medical care in the exercise of the medical and paramedical professions. • The supply of human organs, blood, and milk. • The supply of services by dental technicians in their professional capacity. • The supply of services by independent groups of persons, who are carrying on an activity that is exempt from VAT. • The supply of services and of goods closely linked to welfare and