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Albania

Taxes

If you are willing to do business in Albania, this article will educate you on the tax laws for a LLC which is the most common company structure in Albania.

Albania taxes corporate income on a worldwide basis. The established approximate percentage for income remitted, from our research, but seek professional advice, is 15%. The country doesn't have major incentives to bring income earned abroad. Taxes are lower than average in Albania because the headline corp. tax rate is 15%. This ranks Albania as 44th overall with regards to corporate tax rate worldwide. Taxpayers with annual turnover up to 5 million Albanian lek (ALL) are exempt from CIT, whereas those with annual turnover between ALL 5 million and ALL 8 million are subject to a reduced CIT rate of 5%.

The VAT rate in Albania is 20.00%, that ranks Albania as 134th overall in terms of VAT globally. In terms of other taxation, an employer will contribute 18.40% to the equivalent of a social security and health fund and an employee will contribute 12.90%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 94hours. Contributing to this is the number of yearly labor tax payments, which is 1 in AL.

Thin capitalization mandates are in play. This refers to any type of requirements on a business and the debt-to-asset ratios. A participation exemption may apply for dividends received from resident entities. Dividends received from foreign entities are included in taxable income and subject to CIT. Dividends are payments of an earnings of the legal entity, determined by the board of directors, to shareholders.Dividends can be one of the following cash payments, shares of stock, or other property. Capital Gains are subject to Corporate Income Tax. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 15%. This means that the taxman expects companies to withhold 15% of money remitted abroad on interest payments. The dividends withholding tax rate is 15%. This means that the relevant tax authorities expects companies to pay tax on at least 15% on dividend payments abroad. The royalties withholding tax rate is 15%. This should be interpreted usually that the tax authorities expects relevant legal entities to pay tax on at least 15% of money remitted abroad on royalty payments. Withholding taxes may be reduced under tax treaties.
There is no known tax on wealth in Albania. There are inheritance, transfer and real property taxes in AL. We are aware of commonly used research and development breaks on taxation here.

The above is not tax or legal advice for your particular situation. We are able to to point you a tax advisor in Albania who can advise you. Want to work together? Click the free consultation button above.

Country details

Albania
ALL
Tirana
Europe
Albanian, Greek
2,986,952

Tax treaties

Country Type Date Signed
Croatia DTC  1994-12-02
Italy DTC  1994-12-12
Montenegro DTC  2004-12-22
Romania DTC  1994-05-11
France DTC  2002-12-24
Belgium DTC  2002-11-14
Malta DTC  2000-05-02
Luxembourg DTC  2009-01-14
Czech Republic DTC  1995-06-22
Norway DTC  1998-10-14
Kosovo DTC  2004-09-28
Ireland DTC  2009-10-16
Latvia DTC  2008-02-21
Korea, Republic of DTC  2006-05-07
Estonia DTC  2010-04-05
Malaysia DTC  1994-01-24
Poland DTC  1993-03-05
Kazakhstan DTC  2008-02-21
Iceland DTC  2014-09-26
Sweden DTC  1998-03-26
Hungary DTC  1992-11-14
Germany DTC  2010-04-06
Russian Federation DTC  1995-04-11
Greece DTC  1995-07-14
Egypt DTC  2005-02-23
Serbia DTC  2004-12-22
Turkey DTC  1994-04-04
Bulgaria DTC  1998-12-09
Bosnia and Herzegovina DTC  2008-06-17
Singapore DTC  2010-11-23
Netherlands DTC  2004-07-22
India DTC  2013-07-08
Slovenia DTC  2008-02-27
Austria DTC  2007-12-14
United Kingdom DTC  2013-03-26
Qatar DTC  2011-10-18
China DTC  2004-09-13
Spain DTC  2010-07-02
Switzerland DTC  1999-11-12
Moldova, Republic of DTC  2002-12-06
Former Yugoslav Republic of Macedonia DTC  1998-01-15

Tax treaties Map

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