Page 30 - CEE Tax Guide 2025

Kosovo

Forvis Mazars Kosova sh.p.k
Rr. Bekim Fehmiu, Icon
Tower, Pristina
Phone: +383 44 900 558
www.forvismazars.com/al

Corporate taxes and other direct taxes to corporate income tax, withholding tax applies and
is offset against the annual tax return.
Resident companies are taxed on their worldwide
income, while non-residents are taxed only Transfer pricing (TP) regulations, effective from
on income from Kosovo sources. Kosovo’s Corporate 2017, govern pricing between affiliated entities with
Income Tax (CIT) follows worldwide taxation at least 50% ownership or voting rights. Taxpayers
principles. The annual turnover threshold for CIT engaging in controlled transactions above EUR
has been reduced from EUR 50,000 to EUR 30,000. 300,000 annually must submit a form by March
Companies or sole traders with gross income 31 of the following year. The rules apply only to cross-
above EUR 30,000 must pay CIT, while those below border transactions, with safe harbors allowing a 7%
can choose a special quarterly payment. The CIT profit markup on low value-adding services without
rate is 10%, paid quarterly. Taxable income is the a transfer pricing study.
difference between gross income and allowable
deductions, with the tax period being the calendar VAT and other indirect taxes
year. Losses can be carried forward for six years.
In Kosovo, VAT applies to goods or services supplied
Withholding tax applies to income from interest, for payment by a taxable person and on imported
royalties, rents, and games of chance for both goods. A taxable person is anyone independently
residents and non-residents. All income, except rent carrying out economic activities. Exports are
(9%), is taxed at 10%. Even if the recipient is subject exempt from VAT, with input VAT deductions
allowed. VAT on imports is collected at the border

Transfer pricing in Kosovo based on customs value and duties. The VAT rate
is 18% standard and 8% reduced, excluding exempt
Arm’s length principle Since 2017 or export supplies.

Documentation liability Since 2017 No other indirect tax are applicable.
APA Since 2017
VAT options in Kosovo Applicable / limits
Country-by-Country From FY 2017
liability (with transitional rules). Distance selling No
Master file-local file From FY 2018 on. Call-off stock No
(OECD BEPS 13)
applicable VAT group registration No

Penalty Cash accounting – yearly No
amount in EUR (approx.)
lack of documentation A maximum of EUR 2,500. Import VAT deferment

tax shortage N.A. N.A. Local reverse charge Supply of construction and
construction-related works;
Related parties 50% < Direct or indirect construction activities.
control or common
managing director. Option for taxation

Safe harbors Low value-added letting of real estate
services: mark-
up to a maximum 7%. supply of used real estate No

Level of attention paid 9/10 VAT registration EUR 30,000/year
by Tax Authority threshold

Central and Eastern European tax guide 2025 Forvis Mazars 30