Albanian Government Proposes New Amendments to the Income Tax Law

The Council of Ministers has recently approved a draft law introducing some amendments to provisions of the law no. 8438, dated 28.12.1998 "On Income Tax" (the "Draft Law"). The Draft Law shall be submitted to the Albanian Parliament for approval.

Below is a brief summary on the most important amendments:

Income Deriving from Gambling and Inheritance shall become Taxable

Among the categories of taxable income, are also introduced those deriving from gambling and inheritance. An Instruction of the Minister of Finance will clarify the procedure about payment of tax, especially in case of inheritance.

Annual Tax Return

Subject to existing provisions of the Income Tax Law, any individual realizing Albanian sourced income, which has not been subject to withholding tax, shall declare such income within 30 January of the following year.

According to the Draft Law, all taxable individuals (whether self-employed or not), being resident in Albania, as well as non-resident individuals that realize Albanian sourced income, shall submit to the tax authorities the annual income tax declaration (Annual Tax Return), not later than 30 April of the following year.

These categories of taxpayers are not required to file the Annual Tax Return:

self-employed individuals that realize an annual turnover up to Leke 2,000,000 (approximately EUR 14,800); individual taxpayers that realize an annual income up to Leke 200,000 (approximately EUR 1,480). However, the Annual Tax Return may be voluntarily filed by the above indicated persons, as well as by other taxpayers who do not have the obligation to file it. The persons that undertake to file the Annual Tax Return will benefit from the deductible expenses scheme provided by the Draft Law.

According to the deductible expenses scheme established by the Draft Law, certain expenses are considered as tax deductible for purposes of calculating the taxable income. Persons realizing an annual income less than Leke 800,000 (approximately EUR 6,000) are entitled...

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