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Taxation in Albania
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Taxation in Albania
 
 
 

Corporate Tax

Main rate: 20%

Resident companies are taxed on their worldwide income; non-resident companies pay tax only on Albanian-source income. Companies generally are treated as resident if they are registered under Albanian law. A flat rate of 20% applies. Income from dividends is considered as taxable income.

The tax rate for companies with foreign participation engaged in exploration and exploitation activities relating to oil and gas is 50%.

Individual Tax

Progressive rates up to 20%

Resident individuals are taxable on worldwide income; non-residents pay tax only on Albanian-source income. An individual is deemed to be resident if permanently domiciled in Albania or if present in the country for more than 183 days in any 365-day period. Income tax rates rise progressively to a top rate of 20%.

Capital Gains

Generally taxed as income

Capital gains are taxed as income. Capital gains on the sale of a company’s fixed assets are taxed as part of the company’s business income.

Indirect Tax

Standard rate: 20%

Value-added tax (VAT) applies to most transactions. The export of goods and services is zero-rated. Exemptions include postal services, non-profit organisation supplies, supplies of drug and medicinal equipment, supplies of electronic and written media for advertising, supplies of services on casinos, hippodromes, hydrocarbons operation, diplomats, etc.

Registration is compulsory for businesses whose taxable turnover is over LEK 8m in any previous period not exceeding 12 months. A non-resident company making supplies in Albania must register for VAT through an accredited representative.

Excise tax is levied on “special” goods and various kinds of oil, cigarettes and coffee.

Tax Administration & Compliance

Tax year: Calendar year

Companies must make monthly advance payments of tax, based generally on the adjusted taxable profits of the previous year. A final payment of tax is due on March 31st following the tax year. Any balance of tax due shown on the annual tax return must be paid when the tax return is filed.

Additional Tax Information

Withholding Taxes

Dividends 10%, Interest and Royalties 10%. Rates may be reduced by tax treaty.

Tax Treaties

Albania has concluded 16 treaties and is in negotiation with several countries.

Dividends

Dividends paid between resident companies are exempt provided certain conditions are satisfied.

Revenue Protection

There are transfer-pricing and thin-capitalisation rules.

Groups

There is no provision for group taxation.

Incentives

Research and development credits.

Other Taxes

Payroll tax, Real property tax, Customs duties.

 

 
 


 



 


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