IuteCredit Albania has set up a business in Albania that produces millions of euros in profit, while a very large part of the money is registered every year as an expense to the group that controls it. The balance of 2025 shows the size of this mechanism. The company registered 605.5 million alleks, about 6.3 million euros, only for management services, 218.9 million alleks or about 2.26 million euros for guarantees, while in the table of relations with the companies of the group there are also 274.3 million alleks, about 2.84 million euros, as interests towards Iute Group.
The account reaches nearly 1.1 billion ALL or about 11.4 million euros in one year. Meanwhile, IuteCredit Albania declared 421.8 million lek net profit, about 4.36 million euros. For every euro of net profit that remained in the Albanian balance sheet, about 2.6 euros appear in these three categories of expenses with the group.
The biggest weight is hidden behind two simple words, “management services”. Fully 605,551,819 ALL, about 6.3 million euros, have been registered as management costs that IuteCredit Albania receives from the group. In the same year, all the company’s employees in Albania cost about 362 million ALL or 3.74 million euros.
So IuteCredit Albania spent about 2.5 million euros more for the management received from the group than for all its personnel in Albania.
A bill of 6.3 million euros requires an equally detailed account. What services did the Albanian company receive specifically for this amount? How much did the technology, administration, finance, marketing, risk control and other services performed by the group center in Estonia cost? On what basis was the part that Albania should pay and how much profit was added to the cost by the parent company?
On top of the 6.3 million euros of management, 218.9 million lek, about 2.26 million euros, are set aside for “guarantee services”. This amount also needs to be broken down. What obligation has Iute Group guaranteed for the Albanian company, how much money has been guaranteed, to whom has the guarantee been given and what risk has the mother taken to bill over 2.2 million euros in one year?
Only these two items, management and guarantee, amount to 824.5 million ALL or about 8.5 million euros. About 4.36 million euros in net profit of IuteCredit Albania stand in front of them. The management and warranty bill is almost double the profit the company reported in Albania.
Figures from previous years show that the flow has been going on for years. In 2020, management services alone cost 214.5 million ALL. A year later, the bill jumped to ALL 687.7 million. In 2022 it reached 781.8 million ALL, in 2023 it was 651.7 million, in 2024 about 523.3 million and last year it climbed again to 605.5 million ALL.
Management services alone thus amount to about 3.46 billion ALL over six years, over 30 million euros if the exchange rate is taken into account in each year. When we also calculate the guarantees and interests registered in the relations with the group, the amount reaches about 5.7 billion lek, tens of millions of euros that have passed on the balance sheet as costs related to the companies of the same ownership.
This is where income tax comes into play. Albania taxes the profit of companies at 15 percent. Any expenditure that is recognized as a cost is deducted before calculating the profit on which tax is payable. The greater the recognized cost, the smaller the amount that remains to be taxed.
It is enough to see the 605.5 million lek of management in 2025 to understand the fiscal weight. Fifteen percent of this amount is about 90.8 million ALL or nearly 940 thousand euros. If the account is expanded to 218.9 million ALL of the guarantee, the two items together reach 824.5 million ALL and 15 percent of this amount is about 123.7 million ALL, nearly 1.28 million euros.
For this reason, Albanian law requires companies that do transactions with the owner or with companies of the same ownership to justify the prices. The bill should be comparable to what would be paid between two independent companies. The threshold for declaring these transactions is ALL 50 million. Only the annual management invoice of IuteCredit Albania exceeds this threshold more than 12 times.
In this story, Albanian taxes have been within the company. The financial statements of Iute show that during the year 2023 the tax administration checked the tax-profit for the years 2020 and 2021. Precisely in these two years, only the management services had reached about 902 million ALL, over 7 million euros according to the exchange rates of the period. Together with the guarantees, the invoices exceeded ALL 1.2 billion.
So Taxes had before their eyes a large volume of invoices between the Albanian company and the group that controls it.
Were the contracts behind them opened?
Was it checked how much the Iute center in Estonia had actually spent on the services provided in Albania?
Was the way these expenses were divided among the subsidiaries verified?
Was the profit that the mother added to the bill checked?
Did the price compare to what an independent company would charge for the same service?
The answers are important for another reason. IuteCredit Albania has its own structure in Albania and pays around 3.74 million euros per year for local staff. Meanwhile, an invoice of 6.3 million euros for management comes from Estonia. Taxes should have seen if the services paid in Estonia complement the work done in Albania or if the invoice includes functions that the Albanian company performs in the meantime with its people./ Pamphlet
