On the key amendments to the Law “On income tax”
Following the information on the Fiscal Package 2019, the General Directorate of Taxes would like to inform all taxpayers on the main amendments to the Law No. 8438, dated 28/12/1998 “On income tax”, as amended.
More specifically:
The tax rate on income from employment as per the level of gross salary shall be applied according to the following categories:
- 0% for the monthly gross salary up to ALL 30,000;
- 13% for the monthly gross salary ALL 30,001 – ALL 150,000;
- 23% for the monthly gross salary above ALL 150,000.
A source of income in Albania shall be also considered income of a non-resident person received due to the services performed for a resident person. Regarding this income, the resident receiving the service shall keep the Withholding Tax from payments made to the non-resident.
Every non-resident person who is not registered pursuant to the Albanian legislation and is not subject to the tax on profit, shall be subject to the Tax on Income. To fulfil such obligation, the non-resident persons shall complete the special declaration of taxable income, which must be submitted by march 31st of the next year and pay the tax upon submission moment.
For the purposes of calculating the result of the fiscal year, the expenses for per diems that exceed 50% of the annual gross salary fund shall be considered as unrecognized expenses.
The Tax on Dividend shall be applied at the tax rate of 8%. For non-allocated profit generated in 2018 and before, including the capitalized reserves and profits, such rate shall be applied provided that:
- The tax related to non-allocated profits of 2017 and before is paid by 30 September 2019;
- The tax on dividend for profits of 2018 is paid by 20 August 2019.
In case of failure to meet the above conditions, the taxpayer shall pay 15% of the tax on dividend.
In case the movable (personal) and immovable property that ensures the loan is executed prior to the deadlines set by law for writing off the bad debt, the previous banking provisions, recognized as deductible expenses, shall continue to be recognized as such.
All persons that are resident in the Republic of Albania, the central and local government bodies, non-profit organizations and any other entity, recognized pursuant to the effective legislation, shall be obliged to keep the Withholding Tax from the gross amount of salaries for consulting services.
The General Directorate of Taxes will continuously inform taxpayers of every turnover range, regarding the amendments to the tax legislation that are already into force.