Income taxes

Last reviewed 21 Aug 2023

Tax rate

progressive tax rates

Taxable Income (ALL)        |     Tax rate %
Up to 40,000                        |     0%
From 40,001 to 50,000        |     6.5 % on the amount exceeding ALL 30,000
From 50,001 to 200,000      |     13% % on the amount exceeding ALL 30,000
Over 200,001                       |     ALL 22,100 + 23 % on the amount exceeding ALL                                                         200.000

Special tax rates

N/A

Tax liability

Unlimited

Individuals who are resident in Albania are subject to tax on their worldwide income.

Limited

Non-residents are subject to tax on income derived from Albania sources only.

Tax assessment period

Calendar year

Income categories

Income from

1. Employement
2. Self-employment
3. Interests
4. Dividends
5. Capital
6. Real-estate income
7. Other royalties, gambling, etc.

Accounting

Is regulated based on the Accounting Law. Listed companies, financial institutions and certain other companies with public interest (PIE) are required to apply IFRSs. All other companies as specified by Albanian Accounting Act are required to use National Accounting Standards (in line with IFRS for SME) or may voluntarily chose to apply IFRSs.
Self employed with a turnover up to ALL 2,000,000: receipts and payments accounting (cash basis accounting)
Small businesses with a turnover from
ALL 2,000,001 to ALL10,000,000 are required to maintain accounting records and report based on micro entity standard No.15 ( published by the National Accounting Council)

Loss set-offs

Only capital gains can be offset with capital losses

Loss carryback

not possible

Loss carryforward

In general tax losses can be carried forward for three consecutive years. Tax losses can be carried forward for 5 years if certain investment thresholds are reached (1 milliard ALL).

Operating expenses

Expenses of the business

Tax allowable expenses

Expenses for acquiring, securing or maintaining the revenue of the business except for non-deductible expenses determined by law

Lump sum option

N/A

Motor vehicles

N/A

Social insurance

deductible

Withholding tax

Statutory withholding tax rate is 15 %. A lower rate or 0 % can apply, provided it is envisaged by a double taxation agreement (DTA)

Interest

15 % (a lower rate can apply, provided it is envisaged by a double taxation agreement)

Royalties

15 % (a lower rate can apply, provided it is envisaged by a double taxation agreement)

Dividends

8 % (a lower rate can apply, provided it is envisaged by a double taxation agreement)