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The Assembly rejects the government's proposals, the banks and BSH win the "battle" for credit recognition

2023-04-03 08:54:51Politikë SHKRUAR NGA REDAKSIA VOX
The Assembly rejects the government's proposals, the banks and BSH win the
ASSEMBLY

The Parliament of Albania has rejected the government's proposals in the new law "On income tax" in the article related to the recognition of lost bank loans as deductible fiscal expenses, accepting the persistent request of the Bank of Albania and the banking sector.

The current law "On income tax", in article 24, provides for some special provisions for the recognition as deductible expenses of lost loans of financial institutions.

In the case of banks and non-bank financial entities, in the determination of taxable profit, the write-off of bad debt, related to the lending process, is recognized as a deductible expense upon completion of the 365-day deadline after the filing of the request for the initiation of the execution procedure binding on the executor, in case the loan is secured by movable or immovable property and 365 days after the issuance by the court of the execution order, in case the loan is not guaranteed by movable or immovable property. In the event that the movable or immovable property that secures the loan is executed before the above deadlines, the previous bank provisions, known as deductible expenses, continue to be recognized as such.

In the draft law proposed by the Government in the Parliament of Albania, these specific provisions were removed from the content. Article 31 of the draft law stated that "the full deduction of bad debt is allowed if the following conditions are met at the same time: the bad debt is removed from the accounting of the entity; all possible legal actions have been taken to collect the debt and the provisions created in the article must be added to the taxable profit".

But, at the persistent request of the Bank of Albania and commercial banks, the Parliamentary Committee on Economy has changed Article 31 of the draft law, restoring the special provisions for banks and institutions that are provided for in the current law, cited above.

According to the Bank of Albania and commercial banks, the changes proposed by the government risked creating premises for the increase of bad loans, because the non-recognition of written-off loans as expenses by the tax authorities would cause these loans to be kept on the banks' balance sheets and increase stock of bad loans.

Another issue where the banking sector has won the "battle" in the Assembly was the way of recognizing provisions or technical reserves for losses from problem loans.

Projektligji i propozuar në Kuvend nga Qeveria shqiptare përcaktonte se “në përcaktimin e fitimit të tatueshëm të institucioneve financiare, të rregulluara nga autoritetet rregullatore, lejohet zbritje për shumat që do të vendosen dhe/ose do të rrisin provigjionet e detyrueshme për bankat tregtare dhe institucionet e tjera financiare jobanka dhe shoqëritë e kursim-kreditit të krijuara sipas rregullave mbikëqyrëse të nxjerra nga Banka e Shqipërisë për këtë qëllim”. Kjo nënkupton se me ligjin e ri, në formën e propozuar, shpenzimet për provigjione nuk do të njihen më sipas IFRS-ve, por sipas standardeve lokale të Bankës së Shqipërisë. Kjo e rikthente njohjen e shpenzimeve për provigjione në situatën e para vitit 2013.

But, at the request of the banks, the Economy Commission overturned these changes as well, establishing a wording similar to the law in force that "in determining the taxable profit of financial institutions, regulated by the regulatory authorities, a deduction is allowed for the amounts that will establish and / or increase... mandatory provisions for commercial banks and other non-bank financial institutions and savings-credit societies established in accordance with the standards drawn up by the International Accounting Standards Board and certified without objection by auditors of external".

Basically, this means that banks and financial institutions will continue to recognize as deductible fiscal expenses the provisions created according to the international standards of Financial Reporting (IFRS)./Monitor


Në përputhje me standarded JTI

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