Albania and Iceland abrogate double taxation on incomes and capital

Albania and Iceland have abrogated the double taxation on taxes on incomes and capital, approved by the Albanian parliamentary Economy Commission on Wednesday, February 18.

The agreement creates a completed legal basis for the tax treatment of individuals and Albanian or Icelandic legal persons which are owners of businesses in respective countries or posses incomes from other sources, which fall under the jurisdiction of tax legislations of the two countries.

The agreement predicts how countries will abrogate double taxation by giving the right to only one state for the taxation of incomes or by dividing this right between the two countries, avoiding the double taxation for a business or individual.

The provisions of the agreement give priority to the tax legislations of respective countries and some of them predict that countries may exchange information and cooperate to prevent the fiscal evasion of subjects that operate in both countries.

The reached agreement according to Economy Commission member Anastas Angjeli, will boost the development of economic relations between the two countries and attract foreign investments. Angjeli asked the government to compile an agreement in order to abrogate the double taxation with the United States, a request made even by the American Chamber of Commerce in Tirana.

This agreement was signed in September 24, 2012, based in the model of Organization for Economic Cooperation and Development, with the aim to eliminate the double taxation and to prevent the fiscal evasion on incomes.

News source/photo credits: ATA