The General Directorate of Taxation wishes to remind that any individual resident in the Republic of Albania who receives income sourced in the Republic of Albania and abroad, in an amount exceeding 2,000,000 (two million) lekë per year, in accordance with Law No. 8438 of 28.12.1998 “On Income Tax,” as amended, is required to file the Annual Individual Income Tax Return.
The Annual Individual Income Statement must also be filed by non-resident individuals who earn taxable income sourced in the Republic of Albania in excess of 2,000,000 (two million) lek.
Individuals are required to declare taxable income as follows:
- Gross income from wages or bonuses from employment relationships
- Gross dividend income
- Gross rental income
- Capital gain from the sale of real estate owned by the declarant.
- Gross income from bank interest
- Capital gain generated from investments in securities or from real estate.
- Gross amount won from the lottery or other games of chance.
- Gross revenues from intellectual property, licenses, exclusive rights, and other intangible assets that consist solely of rights and have no physical form.
- Capital gain from the donation.
- Gross income earned outside the territory of the Republic of Albania.
- Other gross income not mentioned above
Every individual who is required to file the Annual Individual Income Tax Return, must take due care to accurately complete the statement's information and, in particular, to calculate the income tax on employment income in cases where the individual receives two or more salaries in a month from different employers.
Improper completion of the Individual Annual Income Statement may result in penalties for the individual filer.
The tax calculated on wages and bonuses from employment relationships for individuals is an empty box on the return that the taxpayer completes themselves.
The individual taxpayer shall calculate personal income tax on wages and salaries for all wage income received during the month, even if they receive these wages from different employers. In the event that the amount of income received during the month from two or more salaries from different employers exceeds the threshold taxed at zero percent (30,000 lekë), tax will be calculated on the total monthly wage income (the total of wage income from all employers).
Based on the total amount of wages received from all employers, the individual calculates as follows:
- For monthly salaries up to 30,000 lek, the tax is 0%.
- For monthly salaries from 30,001 lek to 130,000 lek, the tax is 13% on the amount above 30,000 lek.
- For monthly salaries above 130,001 lek, the tax is 13,000 lek plus 23.1% on the amount over 130,000 lek.
The tax calculated in this way for each month of the year is aggregated over the 12 months and entered as a single amount in box 4 of the return, which represents the annual tax calculated on wages and bonuses.
In box 22 of the declaration, the individual will enter the total amount of tax paid and withheld at source by each employer throughout the months of the year.
The difference between the calculated tax, shown in box 4 of the return, The difference between the calculated tax, shown in box 4 of the return, and the amount of tax paid, withheld by employers, shown in box 22 of the return, represents the amount the individual must pay to the tax administration on account of his annual income from employment.
The amount of tax calculated, shown in box 4 of the return, may in no case be less than the tax withheld at source and paid by the employer on income from salaries and bonuses in respect of current employment during the year, as shown in box 22 of the return.
In the case of individuals who have not been dual-employed in any month of the year, the amount of tax calculated, entered in box 4 of the return, is always equal to the tax withheld at source and paid by the employer for wages and bonuses in respect of current employment relationships during the year, entered in box 22 of the return.
Deductible expenses
Taxpayers who are not required to file a return and whose annual gross income from all sources does not exceed 1,050,000 (one million fifty thousand) lekë per year (indexable annually) are entitled to a deduction of expenses. but not higher than this amount, who may be required to file a declaration.
For the purpose of calculating taxable income, these individuals file the annual income tax return and claim the following deductible expenses:
- the amount of bank interest on the loan taken for education, for oneself or for children and dependents;
– medical expenses for oneself, children, and dependents, for the portion not covered by mandatory health insurance, as determined by a government decree.
The crediting of amounts obtained from the deductible expenses scheme is carried out by September 30 of the year following the tax period for which the return was filed.
Non-resident individuals are not entitled to deduct their expenses.
The declaration of income, besides being a legal obligation for every individual subject to filing, also serves as an additional guarantee regarding the justification of his wealth.
| Caution!
The declaration of income earned in 2018 must be submitted only electronically, through the e-Filing system, no later than April 30, 2019. |
For more information, you can contact the Taxpayers' Service offices, the regional tax directors, or call the toll-free green number. 0800 00 02 near the Call Center, as well as to use the Live Chat service on the official DPT website.