Residents are subject to tax on their worldwide income. Non-residents are taxed on their Albanian-source income only. Income tax is assessed in the tax year on a current year basis.
Income from salaries and other compensations deriving from labour agreements
| Taxable Income (ALL) | Tax Rate |
| 0 to 30,000 |
0% |
| 30,001 to 130,000 |
13% of the amount exceeding ALL 30,000 |
| Over 130,000 |
13,000 ALL +23% of the amount exceeding ALL 130,000 |
| Other Kinds of Income |
15% |
| Type of Income |
Taxable Amount |
| Income from salaries and other compensations deriving from labour agreements |
100% |
| Income from rental or other profits arising from real property |
100% |
| Income derived from transfers of ownership rights over immovable property |
100% |
| Income derived from transfers of quotas and shares |
100% |
| Interest income derived from bank deposits and securities |
100% |
| Income from dividends or other type of profit distribution |
100% |
| Income from Copyrights or Royalties |
100% |
| Capital gains |
100% |
| Income derived from gambling and other games of chance |
100% |
| Other income not identified in any of the above forms |
100% |
| Type of Income | Exempt % |
| Incomes received as a result of being insured in the social and health insurance schemes |
100% |
| Student scholarships |
100% |
| Incomes from expropriations |
100% |
| Incomes which are exempted according to international treaties ratified from the Parliament of Albania |
100% |
| Financial compensations to former political prisoners and former proprietors |
100% |
| Life and health contributions paid by the employers |
100% |
| Judicial compensations |
100% |
| Prizes received from the government for achievement in science, sport or culture. |
100% |
| Expenses Type |
Exempt % |
| Interests on loans taken for the education of dependent family members; |
100% |
| Health care expenses for medical treatment that are not covered by the health insurance |
100% |
The total of deductible expenses cannot exceed the amount of total taxable incomes.
Mandatory social security and health insurance contributions are due on employment, civil and management income. The Social Security Contribution is calculated on a monthly gross salary, from a minimum amount of ALL 22,000 to a maximum amount of ALL 97,030 (approximately EUR693). The Health Insurance Contribution is calculated on a monthly gross salary.
Self-employed must pay social security contribution calculated on the minimum salary of ALL 22,000 and health insurance contribution on the minimum salary of ALL 44,000. Contribution rates are as follows:
| Contribution Type |
Employees |
Self Employed |
|
| Employer |
Employees |
||
| Social Security Contribution |
15% |
9.5% |
23% |
| Family Health Contribution |
1.7% |
1.7% |
3.4% |
Resident companies or sole traders that have an annual turnover which does not exceed the amount of ALL 8,000,000 (approximately EUR 57,000) are subject to simplified profit tax on small business.
| Annual Turnover (ALL) |
Tax Rate |
| 0 to 2,000,000 |
All 25000 |
| 2,000,001 to 8,000,000 |
7.5% (But not less than ALL 25,000) |
Resident companies are subject to corporate income tax on their worldwide income, while non-resident companies are taxed only on their income derived from sources in Albania. Resident companies or sole traders that have an annual turnover higher than ALL 8,000,000 (EUR 57,000) are subject to corporate income tax. Capital gains, dividends, interests, royalties are included in the income of companies and are taxed as part of corporate income tax. Income tax is assessed on a current year basis.
Tax residency is established when a company has been incorporated in Albania or has a permanent establishment or the management and control is exercised in Albania.
Since January 1 2008, Albania applies a flat tax system.
The standard rate is 15%.
Under Albanian law, the tax is imposed over the annual net profit, which is determined based on the Financial Statements prepared according to the requirements of the Law ?On Accounting and Financial Statements?.
Albania Income Tax Rate for Individual Tax Payers
Lowest Individual Tax Rate is 13% and Highest Rate is 23%
| Taxable Income (ALL) |
Tax Rate |
| 0 to 30,000 |
0% |
| 30,001 to 130,000 |
13% of the amount exceeding ALL 30,000 |
| Over 130,000 |
13,000 ALL +23% of the amount exceeding ALL 130,000 |
| Other Kinds of Income |
15% |
The following individuals are considered resident for tax purposes in Albania:
Individuals who have a permanent residence, family or vital interests in Albania.
Albanian citizens serving in a consular, diplomatic or similar position outside Albania.
Individuals who reside in Albania consecutively or non consecutively for at least 183 days during a tax year, regardless of their nationality or country of vital interests. The calculation of the residence period in Albania includes all of the days of physical presence, including holidays.
Corporate Tax Rate in Albania is flat Rate of 10%
All earned income in Albania from capital gains in business is taxed the same as regular income and charge a flat tax rate of 10%.
The tax year in Albania is the calendar year.
Employers must withhold personal income tax from wages and
compensation paid, and they must pay the withholding tax to the
tax administration by the 20th day of the following month.
Employers must maintain records of payments in accordance with
instructions issued by the Ministry of Finance.
Individuals earning income of ALL 2 million or more must file a
personal income tax return for the preceding year by 30 April.
Income taxed at source must also be declared, but no personal
income tax is calculated on such income.