FINANCIAL REPORTING AND TAX COMPLIANCE IN KOSOVO: AN ANALYSIS OF IMPLICATIONS OF BOOK-TAX DIFFERENCES

The study examines the relationship between financial and tax accounting rules, explicitly focusing on book-tax differences in Kosovo as a transitional economy. Despite a longstanding tradition of development in accounting and taxation, substantial institutional and public discourse regarding the differences in financial and tax regulations have been absent. Surprisingly, even constitutional tax principles did not catalyze debates regarding this alignment. Historically, the discussions and treatments on this subject have predominantly been confined to academic circles and tax authorities. Kosovo’s official bodies have not publicly expressed their viewpoint on the relationship between financial accounting and tax accounting rules. This lack of communication also applies to discussions about the Common Consolidated Corporate Tax Base (CCCTB) proposal, the newly developed Business in Europe: Framework for Income Taxation (BEFIT), and the IF/OECD/EU Pillar 2 (and Pillar 1) proposals. The study emphasizes the need for a broader discussion on book-tax differences and systematic alignment to promote Kosovo’s economic development and integration into the European Union financial system.