The Assembly of Kosovo has adopted Law No. 08/L-176, introducing, among other provisions, several amendments to the Law on Tax Administration and Procedures.
One of the most significant changes concerns the suspension of the obligation to pay tax liabilities while an appeal is under review.
Previously, a tax audit report became enforceable upon signing, meaning that the tax liabilities established in the report could immediately be collected by the Tax Administration of Kosovo (TAK). Consequently, in many cases, taxpayers’ bank accounts were blocked before their appeals against the tax audit reports had even been examined.
Under the new legislation, paragraph 1 of Article 82 has been deleted in its entirety. In its most recently amended version, this provision stipulated:
“1. Whether or not a person has submitted an appeal to the Appeals Division, the Independent Review Board or the competent court, this shall not suspend the obligation to pay tax liabilities.”
Following the deletion of this provision, Article 130 of the Law on General Administrative Procedure (LGAP) becomes applicable, providing that administrative appeals have a suspensive effect.
Article 130 of the LGAP provides:
“Unless otherwise provided by law, the submission of an appeal shall suspend, by operation of law, the legal effects of the administrative act until notification of the decision resolving the appeal.”
Accordingly, under this legislative amendment, the Tax Administration of Kosovo is no longer legally entitled to collect the disputed tax liabilities until the taxpayer’s appeal has been reviewed by the Appeals Department, contrary to the previous practice.
Furthermore, before the completion of the administrative appeal procedure, tax liabilities arising from the audit report may not be included in the tax certificate issued by TAK to the taxpayer.
Consequently, the audit report cannot produce legal effects until the Appeals Department has issued its decision.
We consider this legislative amendment to be a highly positive and important development for businesses.
The amendment is also consistent with previous legislative reforms. In particular, the Law on General Administrative Procedure had already changed the rule established under the previous legislation, which provided in Article 128 that an appeal did not suspend the enforcement of an administrative act where the act concerned the collection of fees, taxes or other budgetary revenues.
Other Important Legislative Amendments
The new legislation also introduces significant reductions in certain deadlines applicable to TAK when processing taxpayers’ requests.
1. Reduction of the Deadline for Taxpayer Deregistration
For requests concerning taxpayer deregistration, TAK now has 45 days instead of the previous 60 days to verify the taxpayer’s tax position and, where necessary, conduct an audit of the taxpayer’s business activities.
Furthermore, if a taxpayer does not receive a response within 45 days from the submission of the deregistration request, the taxpayer is deemed to have been deregistered.
TAK may extend this deadline only once where it considers the matter sufficiently complex and is unable to issue a decision within the initial period.
2. Reduction of the Deadline for Tax Refund Requests
Another positive development for businesses concerns the reduction of the deadline for TAK to process tax refund requests.
Under the previous provisions of Article 30, paragraph 4, TAK had 60 days to act on such requests.
The new legislation reduces this deadline to 30 days.
3. Administrative Appeals and Judicial Review
The Appeals Department remains the competent authority for reviewing taxpayers’ appeals against decisions issued by TAK.
Following the administrative appeal procedure, taxpayers may challenge the relevant decision before the competent court by initiating an administrative dispute.
For further information regarding the requirements and necessary content of an appeal against a TAK decision, you may consult another informative article prepared by our team:
