Profit shifting, Albania signs multilateral tax convention with OECD
Minister of Finance Petrit Malaj signed today in Paris the “Multilateral Convention on Facilitating the Implementation of the Second Pillar Subject of the Tax Rule”. Malaj signed on behalf of Albania while on behalf of the OECD the Deputy Secretary-General of the Organization for Economic Co-operation and Development, Fabrizia Lapecorella, signed.
The signing of this Convention is part of the measures within the framework of the international BEPS project, of which Albania has been a part since 2019.
The Pillar Two Subject to Tax Rule (STTR) is a treaty-based provision that applies to a specified group of payments within a cross-border group. When these payments are taxed at a corporate income tax rate lower than 9% in the beneficiary's country of residence, then the source country has the right to tax this income up to that minimum level.
The STTR is an integral part of the consensus reached on global rules against tax base erosion, which aim to address the tax challenges arising from the digitalization of the economy.
During his speech, the Minister of Finance stated that Albania will be able to fulfill its commitments more efficiently, given that the main goal of the Convention is to help increase the transparency and integrity of the international tax system.
The Ministry of Finance will continue to be committed to promoting tax justice, increasing revenues, preventing profit shifting, and ensuring fiscal sustainability, for the benefit of a better business climate.
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