Economy and Banking Sector of Albania

Personal Income Tax

Personal income tax is levied on an individual's wages, salaries, and other types of income. Because of exemptions, deductions, and credits, most individuals do not pay taxes on all of their income.

Personal Income Tax Rates in Albania: 0.0 - 23.0%

In Albania progressive tax rates from 0.0% to 23.0% are applied to personal income.

An example of calculating a tax amount for personal income from 20,000 EUR to 100,000 EUR is shown in the Table 2. The calculation is done for a single taxpayer, social security contributions are not taken into account. Effective tax rates less than 15,00 % are considered taxpayer-friendly, while the rates more than 35,00 % are considered aggressive.

Further Information

• How Much Personal Income Tax Do You Pay in Europe?

Corporate Income Tax

Corporate Income Tax Rate in Albania: 15.0%

In Albania a flat tax rate of 15.0% is applied to business income.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Albania: 24 Signed Agreements

Albania signed DTAs which already came info force with the following jurisdictions:

There are also several agreements between Albania and other jurisdictions which were signed but haven't yet come into force:

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

• spontaneously;
• on request;
• automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Automatic Exchange: No Commitment to Start

Albania signed the automatic information exchange agreement on 29 October 2014 but didn't indicated a timeline of the start of the automatic information exchange.

Automatic Excnange: 0 Bilateral Agreements to Receive Information

Albania has not singed any bilateral agreements to automatically receive information.

Automatic Excnange: 0 Bilateral Agreements to Send Information

Albania has not singed any bilateral agreements to automatically send information.

Further Information

• Automatic Exchange of Information on Financial Accounts
• Countries Which Will Not Automatically Exchange Account Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

Although there is no IGA between Albania and the United States, banking and financial entities operating in Albania have reached the agreement with the IRS to participate in FATCA on an individual basis.

Further Information

• FATCA and European countries