Page 9 - CEE Tax Guide 2025

VAT. The obligation to register for VAT purposes A progressive rate is applicable on employment
and charge VAT is triggered when annual turnover income; 13% for yearly income up to ALL 2,040,000
exceeds ALL 10 million (approx. EUR 100,000). and 23% for the amount over ALL 2,040,000.
Persons involved in import or export activities However Taxpayers can deduct specific amounts
and taxpayers supplying professional services from their annual tax base, such as:
must register for VAT regardless of the amount
of turnover. The applicable VAT regimes are: 0%, • Up to 600,000 ALL/year: Full deduction.
6%, 10% and 20%. • Over 600,000 ALL/year up to 720,000 ALL/year:
Customs duty in the Republic of Albania is applied by 420,000 ALL/year.
the customs authorities on the import of goods. The • Over 720,000 ALL/year: 360,000 ALL/year.
liability to pay duty always falls on the importer of the Additional deductions include 48,000 ALL for each
goods, but it is added to the cost of goods and in this dependent child under 18 years and education
way, it is finally transferred to the consumer. Starting expenses up to 100,000 ALL/year if the income
from January 15, 2020 credit obligations or surpluses, is less than 1,200,000 ALL/year.
such as tax and customs, may be offset between them.
This will be possible in the special cases specified –business income
in the Ministry of Finance directive. The customs duty The income derived for the business activity of the
rates range between 0% and 15%, depending on the self-employed or entrepreneurs, are considered
type of goods and the country of the origin. as bussines income and are taxed;
Net business income up to ALL 14 million 15%
Personal income tax / personal income tax, net bussines income over ALL
14 million 23% personal income tax.
Social security system Entrepreneurs and self-employed individuals
realizing an annual turnover up to ALL 14 million
According to New Income Law, personal income
is categorized in three types of income; shall continue to be subject to 0% tax until 2029.
– income from investments
– employment income Is taxed with flat rate at 15%.
The employment income includes wages, salaries,
allowances, other compensations and additions Mandatory social security and health insurance
derived from labour or similar relations. contributions are due on employment income.
Also, definition of the employment income The social security contribution is calculated
encompasses the income earned by a self-employed on a monthly gross salary, from a minimum
individual if at least 80% of the revenue earned amount of ALL 40,000 (approximately EUR 400)
is derived directly or indirectly from a single to a maximum amount of ALL 176,416 (approximately
customer or if at least 90% of the total revenue EUR 1,764). The social contribution payable by the
earned is derived from 2 clients. However, such employer is 15%, while the rate payable by the
criteria do not apply if the self-employed individual employee is 9.5%. The health insurance contribution
provides services only to non-tax residents in Albania. rate is 1.7% for both the employer and the employee.

Wage related taxes in Albania Minimum wage Average wage in private sector
Exchange rate ALL/EUR 100 in EUR in ALL in EUR in ALL

400 40,000 730 73,000
Total wage cost 467 117.00% 852 117.00%
Social & health contribution 66.8 17.00% 121.91 17.00%
Gross salary 400 100.00% 730 100.00%
Social & health contribution 44.8 11.00% 81.76 11.00%
PIT 0 0.00% 56 7.66%
Net salary 355 89.00% 592 81.00%

Teit Gjini
Managing Partner
Phone: +355 (0) 69 20 37 456
E-mail: teit.gjini@forvismazars.com

Central and Eastern European tax guide 2025 Forvis Mazars 9