An article published on 25 August 2026 warns that the Albanian Tax Administration is increasingly scrutinizing loans and cash withdrawals by partners in limited liability companies (sh.p.k.) and joint-stock companies (sh.a.) under the disguised dividend provisions of Law No. 29/2023, Article 59. Where a partner receives funds without a formal dividend distribution resolution, and the loan lacks commercial terms (interest rate, maturity, collateral), the tax authority may recharacterize the amount as a deemed dividend subject to 8% withholding tax plus penalties and late-payment interest at 7.81% per annum. The guidance emphasizes that even interest-bearing loans can be challenged if the rate is below market or repayment is not enforced.
Key Takeaways
- Documentation is Critical: Every partner loan must be approved by the assembly, bear a market interest rate, have a written agreement with a repayment schedule, and be secured where appropriate.
- Tax Consequences: Reclassification triggers 8% dividend withholding tax on the gross amount, plus 0.06% daily late-payment penalty and 7.81% annual interest from the date of withdrawal.
- Preventive Measures: Companies should review existing partner loans before year-end, ensure compliance with transfer pricing rules, and consider formal dividend distributions where economically justified.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement