Executive Summary
General Requirements
- The Albanian transfer pricing framework follows the arm’s length principle as codified in Law no. 29/2023 and is largely aligned with OECD Guidelines.
- Compliance obligations apply exclusively to international cross-border transactions involving related parties, excluding purely domestic dealings.
- Related parties are defined by a direct or indirect ownership threshold of at least 50% or the existence of effective control over business decisions.
- The scope of these regulations extends to any legal person, individual, or other body of persons, including local branches of foreign companies.
Documentation Requirements
- Taxpayers must submit an annual “Notification of Controlled Transactions” if the aggregate value of transactions with related parties exceeds ALL 50 million.
- Comprehensive transfer pricing documentation, which must align with local guidelines for Master and Local File content, must be available and provided within 30 days upon formal request.
- Multinational enterprise groups exceeding the consolidated revenue threshold of ALL 105 billion are required to file a Country-by-Country Report and related notification.
- Documentation must include local industry and market analyses, an entity overview, and organizational charts to ensure full penalty protection.
Results of Non-Compliance
- Failure to submit the annual controlled transactions notice within the deadline results in a fixed fine of ALL 10,000 for each month of delay.
- Missing or incomplete documentation triggers a daily penalty of 0.06% on unpaid tax liabilities, capped at a maximum of 21.9%.
- Late filing of a required CbC Report is subject to a monthly penalty of ALL 10,000 for up to one year, followed by a fixed penalty of ALL 200,000.
- Taxpayers who submit documentation timely and in compliance with local rules are generally relieved from fines in the event of a transfer pricing adjustment.
Country Specific Information
- The General Directorate of Taxes identifies transfer pricing as a high-risk area and utilizes specific risk-assessment criteria to select entities for audit.
- Thin capitalization rules restrict interest deductibility for related-party financing if the total debt-to-equity ratio exceeds 4:1.
- Advance Pricing Agreements (APAs) are available for complex transactions exceeding an aggregate value of EUR 30 million.
- The statute of limitations for transfer pricing assessments is five years from the date the related corporate income tax return is filed.
Compliance Table
| Document | Deadline | Language | Thresholds, Scope & Penalties |
| Local File / TP Documentation | Provided within 30 days upon formal request by the tax authority. | Albanian or English. | Mandatory for cross-border transactions if aggregate value > ALL 50 million. English requires translation within 30 days of request. Penalty of 0.06% per day on adjustments if incomplete. |
| Master File | Provided within 30 days upon formal request by the tax authority. | Albanian or English. | Required for taxpayers exceeding the ALL 50 million aggregate transaction threshold. Must include group-level functional analysis and organizational structure. English requires translation within 30 days of request. |
| CbC Notification | No later than the last day of the reporting fiscal year of the MNE group. | Albanian or English. | Mandatory for all local constituent entities of groups with consolidated revenue $\ge$ ALL 105 billion. Informs the authority of the reporting entity’s identity. |
| CbC Report | No later than 12 months after the last day of the MNE group’s reporting fiscal year. | Albanian or English. | Required for groups with consolidated revenue $\ge$ ALL 105 billion (approx. EUR 1.05 billion). Failure to file results in ALL 10,000 monthly fine, increasing after one year. |
| Other / SMEs (Annual Notice) | Annually by March 31 of the following year. | Albanian or English. | Mandatory if aggregate value of controlled transactions (including loan balances) exceeds ALL 50 million. Failure to file results in fixed fine of ALL 10,000 per month. |
Disclaimer: This information is obtained from secondary sources and is included for informative purposes. It should be confirmed by a local advisor.
