Verified Facts
The tax rates in Albania range from 0% to 23% for personal income, with a corporate tax rate of 15% and a standard VAT rate of 20%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Albania operates a territorial taxation system, where residents are taxed on their worldwide income, but non-residents are only taxed on Albanian-sourced income. Residency for tax purposes is determined by physical presence in the country for at least 183 days in a calendar year, or by having a permanent home in Albania. The tax system is designed to be relatively straightforward, with a focus on encouraging foreign investment and economic growth.
The Albanian tax authorities, known as the General Taxation Directorate, are responsible for collecting taxes and enforcing tax laws. Taxpayers can submit their tax returns electronically, and there are various payment options available, including online banking and cash payments at designated tax offices. Albania has also introduced various measures to combat tax evasion and avoidance, including exchange of information agreements with other countries.
Personal Income Tax
| Income Bracket (ALL) | Tax Rate |
|---|---|
| 0 - 30,000 | 0% |
| 30,001 - 150,000 | 13% |
| 150,001 - 300,000 | 18% |
| 300,001 and above | 23% |
Personal income tax in Albania is levied on the worldwide income of residents, including employment income, business income, and investment income. Taxpayers are entitled to various deductions and allowances, including a personal allowance of 30,000 ALL per year, and deductions for mortgage interest, charitable donations, and education expenses. Tax returns must be filed by April 30th of each year, and taxpayers can submit their returns electronically or in paper form.
Corporate & Business Tax
- The corporate tax rate in Albania is 15%, which applies to the worldwide income of resident companies.
- Small businesses with annual turnover of less than 5 million ALL are eligible for a reduced tax rate of 5%.
- Albania has several free zones, including the Tirana Free Zone and the Vlorë Free Zone, which offer tax incentives and other benefits to businesses that operate within these zones.
- Companies must register with the National Registration Center and obtain a tax identification number in order to conduct business in Albania.
- Companies are required to file their tax returns by June 30th of each year, and must pay their taxes in installments throughout the year.
VAT / Sales Tax
- The standard VAT rate in Albania is 20%, which applies to most goods and services.
- A reduced VAT rate of 10% applies to certain goods and services, including food, medicine, and educational materials.
- Exemptions from VAT include financial services, healthcare services, and educational services.
- Tourists can claim a refund of VAT paid on eligible goods purchased in Albania, provided they have a receipt and export the goods within 90 days of purchase.
For Expats & Foreign Workers
- Expats and foreign workers are considered tax residents in Albania if they spend more than 183 days in the country in a calendar year.
- Albania has double taxation treaties with over 40 countries, which help to prevent double taxation of income.
- Expats and foreign workers are required to register with the National Registration Center and obtain a tax identification number in order to work in Albania.
- Social security contributions are mandatory for all employees, including expats and foreign workers, and are used to fund pension, healthcare, and unemployment benefits.
- Expats and foreign workers can remit their income abroad, but must comply with exchange control regulations and declare their income to the tax authorities.
- Expats and foreign workers may be eligible for a tax credit in their home country for taxes paid in Albania, depending on the terms of the double taxation treaty.
Crypto & Investment Income
- Investment income, including dividends, interest, and rental income, is subject to income tax in Albania.
- Cryptocurrency is considered a financial asset and is subject to capital gains tax, which is levied at a rate of 15%.
- Capital gains from the sale of securities, including stocks and bonds, are subject to income tax in Albania, but are exempt from tax if the securities are held for more than two years.
- Foreign investment income is subject to withholding tax in Albania, which is levied at a rate of 15%, but may be reduced or eliminated under a double taxation treaty.