Abstract:
Usually income tax laws count on financial accounting information and data, in order to determine a business entity’s taxable income, even though tax and financial accounting have diverse requirements and goals. The aim of this thesis is to find out the relationship that may exist between the Albanian tax and financial accounting regulations. Furthermore, a very important point that should be conducted by this research is to find out whether Albania is following a tax oriented accounting system or not. In the aftermath of a rapid Globalization and the increase of foreign direct investments in Albania, the numbers of entities that have implemented the International Financial Accounting Standards (IFRS) have increased enormously. Thus, we have in one side the continuously increasing number of the firms which require following IFRS standards and on the other side the tax regulations which sometimes comes to the opposite of these standards. So, it is important to find out which type of orientation does Albania follow: the financial or tax accounting. This study includes a diverse methodology, involving an analysis of the tax legislation and interviews with different certified accountants. By revising the progress of this relationship during the last 20 years, the aim is to identify and explain the main divergences that exist between these two sets of rules. Also after this study, the conclusion is that Albania follows a tax oriented accounting system.
