New Fiscal Package Proposal
The government of Albania has submitted to the Parliament the 2019 fiscal package, containing a number of amendments on the main tax laws, as follows:
- Law on income tax
- Law on value added tax
- Law on local taxes
- Law on national taxes
- Law on excise duties
- Law on custom duties
- Law on tax procedures.
Based on the proposed amendments to the law on income tax, starting from the tax year 2019, the tax rate for dividends will be reduced from 15% to 8%. Such reduction will apply also for the dividends of the 2018 tax year, as well as for undistributed dividends from previous years, provided that for dividends from the 2017 tax year and preceding years, are paid by 30 September 2019 at the latest, and that dividends from the 2018 tax year are paid no later than 20 August 2019.
Taxation of Transactions Related to Real Estate and Natural Resources
Based on the proposed amendments to the law on income tax, any transaction related to shares, interests, trusts or other similar interests, wherever located, which are directly or indirectly related to the holder of real estate and/or rights on natural resources located in Albania (e.g. mining resources, hydrocarbons etc.), is deemed taxable in Albania, if during a period of 365 days prior to the transaction, said shares, interests, trusts or other similar interests are related, directly or indirectly, to at least 50% of the value and/or income from such real estate and/or rights on natural resources located in Albania.
Based on the proposed amendments to the law on income tax, if during a tax period there is a transfer of at least 20% of the capital or voting rights in an Albanian company, the company shall be deemed to have sold its assets, as existing immediately prior to such transfer transaction. In these circumstances, the company shall be treated as:
a) the seller and beneficiary of all proceeds from the sale of its assets (proportionally to the capital/voting rights being transferred), at the market value of said assets at that time; and at the same time
b) having re-purchased the same assets at the same value.
In this case, the party (e.g. shareholder) transferring the capital or voting rights in the Albanian company shall be excepted from any capital gain tax on such transfer.
The company must inform the tax authorities of the occurred transaction as above, no later than 45 days following the date of the transaction. Moreover, the Albanian company is also obliged to inform the tax authorities of any other transaction between 10%-20% of its capital or voting rights, when such transaction falls in the category of taxable transactions related to real estate and natural resources located in Albania.
Reduced VAT Rates - Exemptions
Based on the proposed amendments to the law on value added tax, the following taxable supply shall benefit form a reduced rate:
- the rate for the supply of advertising in audio-visual media, shall be reduced to 6%;
- the rate for the supply of electric public transportation means, for 10 or more passengers, shall be reduced to 10%.
Moreover, based on the same proposal, the following supplies shall be treated as VAT exempt:
- the supply of agricultural machinery, based on the list to be approved by the Council of Ministers;
- the supply of subcontracting services to taxable persons benefiting from the custom regime of inward processing of goods;
- the import of raw materials for the production of pharmaceuticals, based on the list to be approved by the Council of Ministers, with the exception of dual use materials, imported by holders of pharmaceutical production authorization.
Bosnia & Herzegovina
Law on Mining
The Law on Mining regulates the conditions and method of exploitation of mineral resources, construction, use and maintenance of mining facilities, mining projects, mining geodetic measurements and plans, protection measures and other issues related to the exploitation of mineral resources, personnel requirements for performing certain mining operations, as well as the conditions for issuing and revoking licenses in mining. In relation to the previous Law, this Law introduces licenses for legal entities and natural persons, by which they acquire the authority to perform certain mining activities. In addition to this, the Law also provides a higher level of harmonization with the EU regulations in the field of mining waste management and the protection of health and safety of workers in the exploitation of mineral resources.
Law on the Amendments to the Law on General Administrative Procedure
This Law, in the context of public administration reform, introduces and regulates the electronic communication of authorities and parties, the adoption and delivery of administrative acts by electronic means.
The reason for the adoption of this Law is the need for more detailed regulation of the electronic communications between administrative authorities and third parties in order to achieve faster, more economical and simpler management of the administrative procedure. By this Law, electronic communication and electronic delivery are set up as an option, and not as an obligation, as it depends on the will of the third party in the administrative procedure whether or not they will use these methods and whether or not business systems and processes of administrative organs have enabled this option.
Law on Amendments to the Federation of BiH Labor Law
In the application of the new Labor Law, adopted in mid-April 2016, there was a need for certain corrections, and when determining amendments, the Government stated that they "provide a more just and efficient protection of workers' rights, facilitate and accelerate the process of collective negotiations and prevent possible abuses. The deadline for registering the employer to apply for obligatory insurance is reduced from 15 to 5 days, and a 30-day vacation is provided.
New Cyber-security Act in Bulgaria
The first Cyber-security Act in the Bulgarian legislation has been promulgated in the State Gazette issues 94/ 13 November 2018 and is now in effect. It transposes the requirements of Directive 2016/1148 of the European Parliament and of the Council of 6 July 2016 concerning measures for a high common level of security of network and information systems across the EU.
The Cyber-security Act regulates the organization, governance and supervision of cyber-security, including activities and projects on cyber defense and combating cyber-crime. It imposes obligations on administrative bodies; operators of essential services acting in sectors such as energy, transport, banking, financial market infrastructures, healthcare, drinking water supply and distribution, digital infrastructure etc.; digital service providers where such services are defined as online marketplace, online search engine and cloud computing; persons and organizations in a broad area of public service activities which provide administrative services electronically.
All entities, subject to the Cyber-security Act, are required to implement appropriate and proportionate technical and organizational measures to ensure the network and information security (NIS), to manage the risks, to prevent and minimize the impact of any accidents affecting the NIS.
The CA imposes severe administrative sanctions and fines which may go up to BGN 25,000 (EUR 12,782) in case of repeated violations of the lawful requirements.
Important Amendments to the Administrative Procedure Code
The Bulgarian Administrative Procedure Code (APC) has been recently amended, with a number of significant amendments to enter into force as of 1 January 2019. The major changes concern the procedure for appeal of administrative acts, the increase of state fees for cassation and the acceleration of the implementation of e-justice, to name a few.
Matters related to appeal of individual administrative acts will now be sought by the court in whose jurisdiction the addressee of the appealed act has their permanent address or registered office. In cases where one of these is abroad, competent shall be the Administrative Court Sofia-City. The jurisdiction in matters related to appeal of acts, issued by specific authorities (Commission for Protection of Competition, Financial Supervision Commission, etc.) is now shifted to Administrative Court Sofia-District, irrespective of the residence or seat of the addressee of the act.
The state fee for cassation has been several times increased with the aim is to limit the possibility for abuse of the right to legal process.
An opportunity for closed sessions before the Cassation Court instance has been introduced aiming at speeding up the completion of cases where the legal and factual background shows no complications. Nevertheless, this rule applies insofar as a litigant does not require open session.
The procedure for delivery of acts and summoning in administrative and court proceedings has been amended to introduce electronic exchange as the main means of communication. In cases where organizations and attorneys-at-law are concerned, delivery should take place with priority through their e-mail addresses.
A large number of the introduced amendments have already been appealed before the Constitutional Court regarding their compliance with the Constitution of Bulgaria and a constitutional case has been initiated. However, most of the new provisions shall apply as of 1st January 2019 (October 2019 for the electronic exchange), unless a contrary decision by the Constitutional Court is delivered.
New Obligations for Online Shops Under the Bulgarian Vat Act
The amendments to the Bulgarian Value Added Tax Act (VAT Act) and the Ordinance No. H-18 have laid the foundations for new regulation aiming to establish control over the rapidly growing industry of online sales of goods and services. The state is looking to ensure better traceability and accountability for this type of business activity and a higher collection of taxes due by persons operating e-shops.
The concept of an “electronic shop” is defined for the first time in the Bulgarian legislation and englobes “a website through which sale of goods/services is carried out by concluding a distance contract under Art. 45 of the Consumer Protection Act and which has a built-in functionality to select, include and exclude goods/services in a shopping basket, to submit information about the buyer, the delivery address and to choose a method of payment.”
Such definition leaves open the question whether the new requirements would apply only to online sales to end users / consumers. Further clarifications are expected from the National Revenue Agency (NRA).
The key points in the new legal framework are as follows:
- Setting up a public list (record) of persons operating an online shop;
- Obligation to provide information to the NRA on the range of goods or services sold, the name of the online shop and its domain, technical information about the e-shop, data about the legal entity which is conducting the business, etc., which is to be submitted prior to commencing the activity;
- Obligation to store the information generated through the software of the e-shop for the time periods set out in the Tax and Social Security Procedure Code which will also influence the operators of such e-shops when establishing personal data retention periods in accordance with GDPR.
The amendments to the tax legislation shall enter into force as of 29th December 2018. Legal entities which have already been operating e-shops up to this date will have 3 months to comply with the new regulatory requirements.
Act on Electronic Invoicing in Public Procurement Enters into Force
The Act transposes Directive 2014/55/EU on electronic invoicing in public procurement into Croatian legislation. The Act defines electronic invoice and establishes the Financial Agency as the central information intermediary, which provides the services of receipt and transmission of electronic invoices and accompanying documents, i.e. performs the electronic transmission of invoices between the issuer of electronic invoices and public contractors.
Draft Proposal of the Amendments of the Act on Renewable Energy Sources and High-efficiency Co-generation
The Government of Republic of Croatia submitted the draft proposal of the amendments on 16 November 2018. The proposed amendments intend to broaden the scope of the Act by including matters of development of production facilities and obtaining the status of favored electricity producer for production facilities using any of primary renewable energy sources. By new amendments, the Government intends to establish the model of sale of electric energy purchased from favored producers which would ensure financial stability and sustainability of production of electricity from renewable energy sources.
The Act proposes the obligation of electric energy suppliers to purchase a percentage, of net delivered electricity from favored producers, regulates the status of favored electricity producer and adoption of state aid programs for system of production of electric energy from renewable energy sources.
Act on Amendments of the Maritime Code
The Parliament of Republic of Croatia accepted the draft proposal of the amendments to the Croatian Maritime Code, which harmonizes the provision of the Maritime Code with EU Directive 2009/18/EC establishing the fundamental principles governing the investigation of accidents in the maritime transport sector. The act implements certain important changes, in particular:
- A unique centralized registry of ships is introduced in electronic form and the rules on registration are liberalized.
- New taxation rules are prescribed for yacht crew members in international voyage.
- New regulations of activities of anticipation, prevention, restriction and prompt reaction against sudden contamination
The act is consolidated with the 2007 Nairobi Convention of the Removal of Wrecks and regulates matters of ownership over shipwreck by the state, jurisdiction and financing.
The final draft proposal of the Amendments is expected to be proposed by the Government.
New Trademark Act
A New Trademark Act was accepted by the Parliament of the Republic of Croatia. on 12 October 2018. The final draft proposal is expected to be proposed by the Government. The new legislation is intended to ensure the harmonization of Croatian legislation with Directive (EU) 2015/2436 to approximate the laws of the Member States relating to trademarks.
The proposal contains more available registration systems and trademark protection by determining clear rules and efficient protection procedures ensuring consistency and harmonization of trademark registration in accordance with EU and international legal framework established by the Madrid system.
It is expected that the Act will have positive effects on the legal certainty and market competitiveness as no new fees or compensations are introduced and trademark protection system in international market made more available to business entities.
Draft proposal of the Agriculture Act
The Government of Republic of Croatia submitted the final draft proposal of the new Agriculture Act on 2 November 2018. The aim of the new Act is to improve the current framework for the implementation of the Common agricultural policy for program-financial period 2014-2020 and adjustment of national legislation in agriculture sector.
New Law on the Prevention of Money Laundering and Financing of Terrorism
Macedonian Assembly adopted a new Law on the Prevention of Money Laundering and Financing of Terrorism repealing the 2014 law. The new Law is adopted for the purpose of harmonization with the Directive (EU) 2015/849 of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. The main changes introduced with the Law are the following:
- Establishment of Registry of Beneficial Owners in scope of the Central Registry in Republic Macedonia. The legal entities will be obliged to possess, preserve and report to this Registry the data of their beneficial owners. The operation of this Registry is expected to commence latest in October 2019.
- Redefining of the scope of entities obliged to measures and activities towards preventing money laundering and terrorist financing: Along with the persons entrusted with public functions, the Law adds the following categories of obliged entities: natural and legal persons that provide services of organizing and conducting auctions and game of chance organizers (lottery, betting, automat club and internet games of chance).
- Lowering to EUR 2.000,00 of the threshold for goods/services cash transactions (carried out in a single operation or in several operations which appear to be linked, and not carried out through a bank, a savings house or an account in another payment service institution). Further lowering of the threshold is planned for 2019.
Amendments to the Company Law
The Company Law was amended in light of the new Law on the Prevention of Money Laundering and Financing of Terrorism and the establishment of Registry of Beneficial Owners. Namely, the legislator abolished the provisions that provided the legal possibility for creation of secret companies. The already concluded secret companies’ agreements will be interpreted only in accordance to the Obligations Law provisions on partnership agreement.
Law on Amendments to the Law on the Default Interest Rate
The Law on Amendments to the Law on the Default Interest Rate was adopted by the National Assembly of Montenegro on 27 July 2018. The default interest rate is determined at the rate of the basic default interest rate increased by eight percentage points (instead for seven percentage points).
Law on Amendments to the Law on Expropriation
The Law on Amendments to the Law on Expropriation was adopted by the National Assembly of Montenegro on 12 November 2018. The new amendments stipulate that the state can seize private property and enter into possession of it in an urgent procedure with the payment of compensation for which the Government Commission determines that it is fair.
The Law on Amendments to the Law on Terms of Secondment of Employees Abroad for Temporary Employment and Their Protection
The Law on Amendments to the Law on Terms of Secondment of Employees Abroad for Temporary Employment and Their Protection introduces certain novelties. Amendments proscribe that the employee needs to be employed at least three months by the employer in question before being seconded abroad and abolish employer’s legal obligation to send notifications of seconding employees abroad for temporary work to the Ministry of Labor and certificate from Central Registry of Compulsory Social Insurance, which to a certain extent relieves the procedure itself. Namely, all relevant information regarding the secondment aboard shall now be sent directly to the competent Ministry through the Central Registry.
Law on Amendments to the Law on the Legalization
Some of the most important amendments to the Law on the Legalization are:
- illegally constructed buildings cannot be disposed of until they are successfully legalized. In this respect, the cadaster is under an obligation to register annotation on prohibition of disposal of these buildings within 6 months as of the date the Amendments come into force;
- cities which are composed of several inner-city municipalities (e.g. Belgrade) can assign resolution of legalization proceedings to these inner-city municipalities;
- in case legalization process results in denial or rejection of legalization claim in the first-instance and second-instance, construction inspection is entitled to order immediate demolition of the building, without waiting for the decision on denial or rejection of the legalization claim to be decided in court-administrative procedure (which was previously a standard third-instance legal remedy).
- in case a building which is subject of legalization proceedings is constructed in vicinity of a public building, the owner of illegal building must provide a statement whereby it waives all claims regarding environmental effects of public buildings to the building which is subject to legalization proceedings.
- in case a decision on legalization of the building is not enacted within 5 years as of the date when the Amendments became applicable, the competent authority will render decision on denial of legalization claim.
Law on Amendments to the Law on Civil Procedure
According to the Strategy for Resolving Problematic Loan Agreements selling of problematic loan agreements by the banks is recognized as a major issue, if a civil procedure is in progress, and was initiated by the bank. In that case, in accordance with the recent provisions of the Law on Civil Procedure, a person who buys problematic loan agreements could not enter into a lawsuit instead of a bank without the consent of both parties to the dispute. The consent of the defendant is no longer required in order for other person to act as a plaintiff instead of the initial one, whereas such person acquired certain thing or right which is subject to an ongoing litigation. As of the respective amendment the written consent of the initial plaintiff delivered to the competent court will suffice. In such manner stepping into the respective legislation will be substantially easier.
Law on Amendments to the Law on Personal Data Protection
The main reason behind the adoption of this new piece of legislation is harmonization with the European Union rules, i.e. ensuring the same level of protection of personal data as in the European Union member states. The introduction of the Law is part of Serbia’s obligations in process of the accession to the European Union. Further, the Law was adopted with the aim of facilitating the conducting of business of companies, having in mind the current level of application of modern information technology and social networks. Namely, the general assessment of the previous law on personal data protection is that it was already outdated at the time of its adoption, and therefore its application in practice was often marred by significant difficulties.
The Commissioner for Information of Public Importance and Personal Data Protection’s stand regarding the text of the Law is that it represents a literal translation of the General Data Protection Regulation, and therefore exhibits a high level of formal compliance with the respective regulation of the European Union, but the practical application in Serbia is highly questionable.
Law on Construction Products
The Law on Construction Products regulates the conditions for placing on the market and making available on the market of construction products, making a declaration of performance and placing a sign of conformity of construction products, obligations of business entities, technical regulations for construction products and Serbian technical specifications, simplified procedures, technical evaluation authorities, authorities for evaluation and verification of the continuity of performance of construction products, the validity of the documents for conducting the assessment and verification of the permanence of performance of construction products and marks of conformity issued abroad and other issues relevant to the construction products as well.
Law on Lobbying
The main goal of the Law on Lobbying is to establish a clear normative framework in the field of lobbying in the Republic of Serbia, thus removing shortcomings in our legal system. The legal regulation of lobbying largely protects the public interest by increasing the publicity of the work of state administration bodies, strengthening the integrity and accountability of lobbying persons who perform public functions and raising citizens' trust in the decision-making process, i.e. establishing rules related to the conduct of lobbying.
Law on Amendments to the Law on Environmental Protection
The most important amendments to the Law on Environmental Protection is stipulating the term “users of incentives of IPARD funds”, which are, by the provisions of this law, obliged to fulfill the respective requirements of environmental protection.
The Social Assistance Act (ZSV)
The new Social Assistance Act (ZSV) entered into force on 1 October 2018. The novelty introduces a new organizational structure of social work centers, whereby the previous 62 centers were merged into 16 regional centers for social work. The 62 centers became units, which operate in the places, where the previous centers were based. The organizational change shall streamline the functioning of the centers and increase the efficiency and quality of their work. The reorganization does not interfere with the rights of users. Users will continue to be able to manage their rights from public funds just as they have done so far.
Some centers have developed better practices than the others and those better practices will be therefore more easily transferred between 16 centers than between previous 62. Meaning that dealing with an individual family, that has problems in several areas, will be easier, because experts working in the field of families and those working in the field of transfers will be able to consult more easily.
The novelty also brings more rationality in the work of the centers. Only 16 directors of the regional centers will now deal with business matters and moreover, the same applies for the accounting. Another advantage is also that the local community council will operate in the newly established centers and therefore, will provide the center with information from the municipalities on which issues they should pay attention to.
In recent months has been much talk in the media about local elections, which took place on 18 November. This year's local elections are the seventh in a row. The first local elections since Slovenia became independent were held in 1994, when there were considerably fewer municipalities. In the next decade, the number of municipalities has risen from the initial 147 to 210, and later two more were established.
In this year’s local elections, new leadership is going to be selected in 212 Slovene municipalities. Around 1.7 million eligible voters could vote on new mayors and municipal councilors in approximately 3200 polling stations. There were 688 candidates in 212 municipalities, among them there were 588 men and 100 women. The oldest among the candidates was 78 years old and the youngest 24. The biggest interest was in Maribor, the second biggest city in Slovenia, where this year 18 candidates ran for mayor. Only two candidates were in 60 municipalities, and in 36 municipalities was only 1 candidate. Where in the first round of elections the mayor will not be elected, the second round will take place on 2 December this year.
For about 3,400 places in municipal and city councils were 22,313 candidates, and among them 10,198 women. The oldest among the candidates was 96 years old and the youngest 18.
EU General Data Protection Regulation (GDPR)
The new EU General Data Protection Regulation (GDPR), which has been in force since 25 May 2018, required companies, inter alia, to take additional measures, which also brought certain costs. As explained in some Slovene companies, the changes were not drastic and they do not report any specific problems.
In Telekom Slovenija, the provider of communication services, they explained that the collection of consents has become more complicated and, therefore, lengthier, while the GDPR in the entire field of data processing and protection requires additional measures, including more documentation for demonstrating compliance of business operations and renewed work processes. All of this is also reflected in higher operating costs. In Nova KBM, one of the banks, they reported that certain operating costs were increased as well as the cost of technical solutions to ensure compliance with the GDPR. Zavarovalnica Triglav, the insurance company, also recorded a slight increase in costs.
Slovenia has not yet implemented the GDPR in its legal order. Prior to the introduction of the GDPR, warnings were heard that the non-adoption of the national law could bring many complications. Telekom Slovenija and Zavarovalnica Triglav partially agreed with the latter and pointed out that GDPR in some parts has some provisions that could be more clearly defined by the adoption of the national law on personal data protection.