The tax on personal income is calculated on the incomes of individuals.
- The resident individuals are subject to the tax on personal income during the tax period, for all sources of incomes.
- The non-resident individuals are subject to the tax on personal income during the tax period, for sources of incomes, arising in the territory of the Republic of Albania.
The taxable incomes:
- Salaries and other remunerations related to current labor relationships;
- Incomes derived from the profits of a partner or shareholder in the company;
- Revenues from bank interests or bonds;
- Incomes derived from copyright and intellectual property;
- Incomes from emphyteusis, loans and leases;
- Proceeds from the transfer of the right of ownership of immovable property;
- The amount of income from games of chance and casinos;
- Incomes derived from the difference between the sales price and the purchase price of the shares or stocks that a shareholder or partner owns and sells to another person;
- Revenues in the form of cash to the increase of capital deriving from sources outside of the company, which are not taxed earlier, while they have been subject to tax and that are not accompanied by official documents proving the origin of these funds. The procedures are determined with the Guideline of the Minister of Finance;
- Other incomes, not identified on the presented forms.
Withholding the income tax at source
The income from employment relationship is taxed under the following table:
Tax rate on salaries:
|0 – 30,000||0|
|30,001-130,000||13% of the amount over 30,000 ALL|
|130,001||13,000 ALL + 23% of the amount over 130,000 ALL|
Any employer, who pays the employee a salary or remuneration, withholds the tax on the personal income and transfers the tax withheld in favor of the tax authorities, not later than the 20th of the next month of the payment.
The residents in Albania, central government bodies and local authorities, non-profit organizations and any other entity, recognized by the legislation in force, shall declare and withhold the tax deducted at source for the amount of 15 percent of the gross amount of the following payments arising from a source in the Republic of Albania.
- Appropriation of profit;
- Payments for copyrights and royalties;
- Payments for technical services, management services, financial services and insurance;
- Payment for participation in the management and board of directors;
- Payment for the construction, installation, fitting or supervising work related to them;
- Rental payments;
- Payments for performances of actors, musicians or athletes, including such payments made to persons who employ artists or sportsmen or negotiate for their performances.
- The amount of income from gambling and casinos.
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The payer of the amounts is obliged to keep records of the calculation and maintenance of the tax withheld at source for each beneficiary of incomes and to make them available to the tax authorities and to the person who benefits the incomes, for whom is made the payment.
The registered resident for tax purposes, which carries out the payments provided for in Article 33 of Law 8438, dated 28.12.1998, “On income tax” as amended “, declares and pays the tax withheld at source in the amount of 15% of the gross payment within the 20th of the next month of the payment.
It is excepted from this rule the declaration and payment of the tax at source for:
- dividends, and
- unpaid invoices for expenses for technical, consultancy and management services, billed by third parties, for which no tax is paid at source, within the tax period by the taxpayer.
- For the dividends, the declaration and payment of tax withheld at source are made within the 20 August each year, regardless of the time of the payment of dividends to the beneficiaries.
- For unpaid bills for technical, consultancy and management services, the declaration and payment of tax withheld at source shall be made within the 20 December of the tax period, regardless of when of the time of their liquidation.
It is not applied the tax at source for the payments made for:
- The Albanian residents, registered as taxpayers of profit tax and value added tax or persons registered as taxpayers of local tax on small business;
- The dividends and other distributions of profit for the participations which are exempted by law from the profit tax;
- The payments made to nonresident persons for the services for international transport of passengers and goods.