Albania

Click to download PDF: As per 1 January 20152016

EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY
Tax rate Progressive tax rate for employment income: 0-23%.
*For Income from 0-30,000 ALL/month (Approx 0-215 eur), tax rate is 0%.
*For Income from 30,001-130,000 ALL/month (Approx 215-930 eur), tax rate is 13% of the amount over 30,000 ALL.
*For Income over 130,000 All/Month (Approx 930 eur) tax rate is 13,000 ALL+23% of the amount over 130,000 ALL.
Flat tax rate for all other income 15%
Tax period Calendar Year
Tax residency / Domicile according to domestic law Permanent place of living in Albania.
Albanian citizen,  consular or diplomatic  of  The Republic of Albania abroad.
Present for more than 183 days in Albania.
Tax registration At least 1 day before the first working day.
Employment income definition Salaries and other remunerations related to an employment relationship.
Examples of tax exemption Income from Social Contributions Institution under the Mandatory Scheme of Social Contributions, Scholarships, Remunerations for illness or disasters,  are not taxable in accordance with ruling laws.
Specific expatriate concession Not applicable
Income of board members Treated as income derived from independent personal services and taxed with WHT at 15%.
Tax returns Local Employment Agreement: The employer is liable for the monthly tax compliance. The individual with annual gross income equal or in excess of 2,000,000 ALL (Approx 14,290 Eur)  have the obligation to submit an Annual Tax Return. For individuals with annual gross income less than 2,000,000 ALL (Approx 14,290 Eur) the submission is voluntary. The deadline for the submission of  Annual Tax Return is the 30-th of April of consecutive year of income payment.
Foreign Employment Agreement: The employer is liable for the monthly tax compliance. The individual with annual gross income in Albania equal or in excess of 2,000,000 ALL (Approx 14,290 Eur) have the obligation to submit an Annual Tax Return. The deadline for the submission of Annual Tax Return  is the 30-th of April of consecutive year of income payment.
Individuals that are self-employed and freelancers must submit an Annual Tax Return within the 10-th of February of consecutive year of income entitlement.
Tax payments Local Employment Agreement: The employer is obliged to deduct and pay the PIT on a monthly basis (within the 20-th of consecutive month of income entitlement).
Foreign Employment Agreement: The employer is obliged to deduct and pay the PIT on a monthly basis (within the 20-th of consecutive month of income entitlement).
Individuals who are self-employed and freelancers are responsible for paying their own taxes and social and health contributions.
For income generated from a service rendered to a local company, the later withholds and pays the Income Tax on behalf of the individual within the 20-th of consecutive month of income payment.
TAX TREATIES
Employment income / income from board members Art 15/16 Model OECD Tax Convention
INTERNATIONAL SOCIAL SECURITY
Cross border employments Agreements for social benefits recognition with Turkey, Belgium and Luxembourg.
Exception under Art 16 of Reg. 883/2004
and Art 17 of Reg. 1408/71
Not Applicable
Social Security Cost as % from gross salary and absolute amounts Due by the employer on gross salary:
* Social Security Contributions at a rate of  15%.
* Health Contributions at a rate of 1.7%.
Due by Employee on gross salary:
* Social Security Contributions at a rate of  9.5%.
* Health Contributions at a rate of 1.7%.
Tax base for Social contributions is caped  at the value of 97,030 ALL (Approx   693 Eur).
IMMIGRATION
Work permit All foreign nationals, need work permit.
Visa Nationals of Schengen zone, US and UK Nationals  that stay in Albania for less than 90 days within a period of 6 months  do not need a Visa.
Nationals of Schengen zone, US and UK Nationals  that stay in Albania for more than 90 days within a period of 6 months  need a Visa.
Other nationals need a visa to enter in Albania, which must be obtained before their arrival in Albania and should correspond to the purpose of their visit. The application for Visa is made at the nearest Albanian Diplomatic Mission of their country of residency.
Residency permits / registration certificate All nationals,that stay in Albania for more than 90 days in Albania, need a residency permit.
All nationals, that  aim to work in Albania, need a residency permit.
Driving license All nationals, that have a period of stay in Albania shorter than 1 year can use their foreign driving license.
All nationals, that have a period of stay in Albania longer than 1 year have the obligation to apply for exchange with an Albanian driving license.
STOCK OPTION PLAN Not applicable
Teit Gjini
Managing Partner – Tirana, Albania
Send Email
Direct line: +355-42-278-015
Address: Mazars, Rr Emin Duraku, Pall. Binjaket n°5, Tirana, Albania
www.mazars.al