Home » Albania. Information on Residency for tax purposes

Albania. Information on Residency for tax purposes

Albania, officially the Republic of Albania, is a country in Southeastern Europe. It is a country with an upper-middle-income, with the GNI per capita of $4,180, and a population of about 2,9 million people. There are a lot of start-up ventures in Albania that have been successful, and they continue to grow over the years. Larger businesses also show good profits in different industries such as IT, financial services, oil, banking, service, and construction.

Ease of Doing Business in Albania

It is known that financial instability in Europe affected Albania’s economy. Nevertheless, the country has shown increased investor interest, especially in the mining and oil industry for the first two quarters of 2016 and 2017, and now they are the main targets for foreign investment. 

Albania has a welcoming legal framework for foreign investments and provides a good level of investor protection. Moreover, there are no exchange money control or currency regulations, but anti-money laundering reporting and disclosure requirements also apply.

According to the Doing Business 2020 report, ease of doing business ranking in Albania is: 

  • Rank: 82
  • DB score: 67.7

The ease of doing business score (DB score) serves as the basis for ranking economies on their business environment and shows an economy’s absolute position relative to the best regulatory performance, while the ease of doing business ranking is an indication of an economy’s position relative to that of other countries’ economies. 

Business Taxes

If you conduct business in Albania, you must pay taxes both national and local. They are the income tax, social security, corporate tax and the value added tax, which are all applied on the federal level.

Tax payments are known as the total number of taxes paid by businesses (plus electronic filing). This tax is counted as paid once a year even if payments are more often. The World Bank research shows that Albania tax payments (number) is 35.

Income tax

An income tax is a tax imposed on individuals or business entities (taxpayers) in respect of their income or profits earned. Income tax rates may vary by types or characteristics of the taxpayer and the type of the income.

As for Albania Personal Income Tax Rate, it is 23%.

Corporate tax

A corporate tax (also called corporation tax or company tax) is a direct tax imposed on the profits of a corporation. The corporate income tax (CIT) rate in Albania is 15%. However, the businesses with a turnover of less than 8 million are exempt from paying corporate taxes.

The integrated tax rate on corporate income, capital gains, dividends, interests, royalties are included in the company income and are taxed as part of corporate income taxes.