Latest Changes Of The Albanian Income Tax Law

At the end 2019, the Albanian Government proposed a draft law to the Albanian Parliament, introducing several changes to the Income Tax Law. This draft law was approved by the Albanian Parliament during December 2019. While the changes do not substantially affect the level of taxation, they include several important legal aspects of income tax estimation, which influence certain taxpayers' categories and their tax obligations. The relevant legal act was published in the Official Gazette no.162 of 2019 and entered into force in January 2020.

The latest fiscal package of the Albanian Government for 2020 has a special focus on the income tax law, by changing several of its provisions. The capital gains deriving from the transfer of ownership of immovable properties in Albania is subject to tax at a 15% rate. As of January 2020, the first transfer of ownership - through donation or waive from ownership - of an apartment or land between close family members, husband, wife, child, will be exempted from income tax law.

Individuals with two or more employment relations, for the fiscal year 2019, will have to submit the annual personal income tax return, regardless of the value of their annual total income. Latest by 30th of April, they should declare their total annual incomes in one single form and calculate the relevant tax liability for the whole year, in order to pay any difference that may result from cumulative incomes and taxes paid. The obligation to submit the annual personal income tax return was previously imposed only to individuals with incomes exceeding 2 million ALL (approximately 16,000 EUR) per year. This measure aims to avoid tax evasion of employment income tax.

Exporting companies which during the last three financial years have realized more than 70% of their profits from exports, will be able to deduct - for tax purposes - documented expenses incurred for participating in fairs and exhibitions abroad, up to 3% of their annual turnover, previously deductible up to 0.3% of annual turnover.

Companies generating a taxable profit of over ALL 100 million (approximately EUR 800,000) which sponsor sports activities as part of the sports federations, will have the possibility to deduct from incurred expenses, not up to 3% of pre-tax profit, as previously provided by the law, but rather the triple of this amount. This provision can be applied only for the relevant tax year and is conditioned by the presentation of the sponsorship...

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