Page 7 - Mazars Central and Eastern European tax guide 2023

Albania transferred to the consumer. Starting from 15/01/2020 Personal income tax / Social security system
credit obligations or surpluses, such as tax and customs,
may be offset between them. This will be possible Employed persons are subject to income tax
on remuneration and all benefits received from
in the special cases specified in the Ministry of Finance employment. Those who receive above ALL 2,000,000,
directive. The customs duty rates range between 0% and should file an annual tax return. Employees employed
15%, depending on the type of goods and the country
Mazars SHPK of the origin. by more than one employer are obliged to file the
Rr. Emin Duraku, aforementioned return, irrespective of the amount of their
Pall. “Binjaket”, Nr.5, Tirana annual income. Entities are required to withhold personal
Albania VAT options in Applicable / limits income tax from the gross salaries of their employees.
Phone: +355 (0) 42 278 015 Albania In Albania, a progressive rate is applicable; no tax is applied
www.mazars.al Distance selling No monthly salaries of up to ALL 40,000; 6.5% for salaries
up to ALL 50,000 for the amount over ALL 30,000; 13%
Call-off stock No for salaries up to ALL 200,000 for the amount over ALL
VAT group registration No 30,000. Above that level, ALL 22,100 plus 23% of the
Cash accounting – yearly amount above ALL 200,000 is payable.
Corporate taxes and other direct taxes • 5% for entities which operate in the agritourism amount in EUR (approx.) No Mandatory social security and health insurance
industry, during their first 10 years of activity. Import VAT deferment No contributions are due on employment income. The social
Resident companies are subject to corporate income tax • Any entity which operates a 4- or 5-star hotel and that security contribution is calculated on a monthly gross
on their worldwide income, while non-resident companies acquires the status of special investor by December salary, from a minimum amount of ALL 34,000
are taxed only on income that is derived from sources 2024 will be exempt from CIT for the first 10 years For all services from non-resident (approximately EUR 295) to a maximum amount of ALL
in Albania. of their operation. Local reverse charge entities that are subject to VAT 149,954 (approximately EUR 1,304). The social contribution
Resident companies are subject to either Simplified The assessment of CIT is based on the FS prepared in their own country. payable by the employer is 15%, while the rate payable
Corporate Income Tax, levied only on those companies in accordance with the National Accounting Standards by the employee is 9.5%. The health insurance contribution
with an annual turnover exceeding ALL 8,000,000 or IFRS, subject to certain adjustments for tax purposes rate is 1.7% for both the employer and the employee.
(EUR 69,565), or to standard Corporate Income Tax. as specified in the Corporate Tax Law and other Option for taxation
The standard Corporate Income Tax is assessed supplementary legal acts. Fiscal losses may be carried letting of real estate ü
on a current-year basis at the rate of: forward for up to three consecutive years. For taxpayers
• 15% for annual turnover exceeding ALL 14,000,000; investing in projects worth more than ALL 1 billion, the supply of used real estate No
• 0% for an annual turnover of less than ALL 14,000,000; period in which the losses can be carried forward is five VAT registration EUR 81,670/year
• 5% for the entities which operate in software and years. The law does not provide for consolidated tax threshold
IT development;
• 5% for the entities which operate in the returns. Each company forming part of a group must file
a separate tax return.
automotive industry; Average wage
• 5% for entities which perform their activities The gross amounts of interest, royalties, dividends, and Wage related taxes in Albania Minimum wage in private sector
shares of partnerships’ profits paid to non-resident
in accordance with the Law on Entities of Agriculture companies are subject to a withholding tax of 15%, unless in EUR in ALL in EUR in ALL
Collaboration; Exchange rate ALL/EUR 116
a Double Taxation Treaty (DTT) provides for a lower rate. 293 34,000 517 60,000
Transfer pricing in Albania Albania has established agreements with 43 countries for
the avoidance of double taxation. 41 of these have been Total wage cost 342 116.70% 604 116.70%
Arm's length principle ü Since 1998 ratified and are currently in force. Vocational training contribution - - - -
Documentation liability ü Since 2014 Tax on dividends starting from 2019 has been decreased Social Contribution tax 44 15.00% 78 15.00%
APA ü Since 2014 from 15% to 8%. Health Insurance Contribution 5 1.70% 9 1.70%
Country-by-Country Since 2019 VAT and other indirect taxes Gross salary 293 100.00% 517 100.00%
liability ü Personal income tax* - 0.00% 34 13.00%
Master file-local file The VAT Law entered into force on 1 January, 2015 and
(OECD BEPS 13) ü – is harmonized with the “acquis communautaire” in almost Employees' Social contributions 28 9.50% 49 9.50%
applicable all respects. Any person (entity or individual) that makes Employees' Health contributions 5 1.70% 9 1.70%
Penalty supplies in the course of that person’s independent Net salary 260 88.80% 426 82.30%
~ Delayed submission of economic activity is required to pay VAT. For domestic
lack of documentation ü documentation – EUR 80 / supplies and for services subject to the reverse-charge * Salary 0–40,000 ALL PIT rate 0%.
for each month of delay. mechanism, the Albanian taxable person will always Salary 40,001–50,000 ALL PIT rate 6.5% of the amount over 30,000 ALL.
Salary 50,001–200,000 ALL PIT rate 13% of the amount over 30,000 ALL.
0.06% on a daily basis be liable to account for the VAT. The obligation to register Salary over 200,000 ALL PIT 22,100 ALL + 23% of the amount over 200,000 ALL.
(not more than 365 days)
tax shortage ü on tax underpayment for VAT purposes and charge VAT is triggered when annual
+ late payment interest. turnover exceeds ALL 10 million (approx. EUR 81,670).
A person holding Persons involved in import or export activities and
or controlling 50% or more taxpayers supplying professional services must register for
Related parties 50% › of shares, or directly VAT regardless of the amount of turnover. The applicable
or indirectly controlling the VAT regimes are: 0%, 6% and 20%.
other company. Teit Gjini
Customs duty in the Republic of Albania is applied by the Managing Partner
Safe harbours No – customs authorities on the import of goods. The liability Mobile: +355 (0) 69 20 37 456
Level of attention paid by Tax to pay duty always falls on the importer of the goods, but E-mail: teit.gjini@mazars.al
Authority 8/10 it is added to the cost of goods and in this way, it is finally

6 Mazars Central and Eastern European tax guide 2023 Central and Eastern European tax guide 2023 Mazars 7