Albania to re-write oil contract with Bankers after tax tiff

Wed Jan 20, 2016 12:57pm EST
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* Albania says to renegotiate contracts with oil companies

* Wants to impose limit on cost recovery of oil companies

* Companies only pay 50 pct profit tax after recovering costs

* Albania is in dispute with Bankers Petroleum over tax it says it is owed

TIRANA, Jan 20 (Reuters) - Albania will re-negotiate its oil output-sharing contracts with Bankers Petroleum and other oil firms and impose a limit on their recoverable expenses to improve tax receipts, Energy Minister Damian Gjiknuri on Wednesday.

Albania has accused corporations of understating profits made in the country to avoid its 50 percent profit tax. The dispute with oil firms stems from a clause in their contracts that allows firms to pay profit tax only if they have recovered their costs. None has paid profit tax, Gjiknuri said, only royalties, since they report they have not recovered costs.

Canadian firm Bankers temporarily settled a dispute over taxes after it agreed to pay in instalments $57 million, in what Albania claims is owed for 2011, so it could gain control of its Albanian bank accounts while it seeks a final solution through an third-party auditor or the court.

"...We shall re-negotiate some of the current contracts, including the biggest contract of Albania, Bankers Petroleum," Gjiknuri told a meeting of the Extractive Industries Transparency Initiative (EITI).

Bankers Petroleum were not immediately available to comment.   Continued...