Quotation Shehaj, Pranvera. 2020. Taxation of cross-border distribution of profits in Albania: Does it approach the scope of the EU Parent-Subsidiary Directive? WU International Taxation Research Paper Series . (14), 1-31.


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Abstract

Albania journey towards EU membership is governed by the Stabilization and Association Agreement (SAA), signed on June 12th, 2006. This article rises above Albania's obligations for the alignment of its tax legislation with EU standards and acquis, clearly defined in Title VI of the SAA. Unlike any prior analysis of legal and political character published, it aims to analyze the extent to which the Albanian tax legislation comply with one of the most important legislative acts of the EU law, the Parent-Subsidiary Directive, which aims to eliminate double taxation in the distribution of cross-border dividends. Three main conclusions have been drawn: First, Albania seeks to eliminate double taxation arising from cross-border distribution of profits mainly through double tax treaties. Second, in case of inbound dividends, as the State of Residence of the parent company, unless the State of source has a double tax treaty with Albania, Albania’s tax legislation does not exempt or gives a credit for the foreign income tax already levied on the distributed profits. If the State of source has a DTT signed with Albania, Albania tax system follows an asymmetric approach, applying simultaneously the exemption method for the domestic intercompany dividends, but it provides no more than indirect credit for inbound cross-border intercompany dividends. Third, also for outbound dividends, as the State of source, Albania levies a withholding tax only for dividends and distributions of profits paid to non-residents, while it reduces or exempts the withholding tax only if Albania has signed a DTT with the other State.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal WU International Taxation Research Paper Series
Language English
Title Taxation of cross-border distribution of profits in Albania: Does it approach the scope of the EU Parent-Subsidiary Directive?
Number 14
Year 2020
Page from 1
Page to 31
Reviewed? Y
URL https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3718703
DOI https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3718703
Open Access Y
Open Access Link https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3718703

Associations

People
Shehaj, Pranvera (Former researcher)
Organization
Institute for Austrian and International Tax Law IN (Details)
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