Taxable income
The following income is considered taxable income of a personal income taxpayer:
a) employment income;
b) business income;
c) investment income.
Income is taxable whether paid in cash or in kind. Income in kind shall be valued at market value, insofar as it is not otherwise determined in this law or in subordinate legislation issued pursuant to it. The arm's length principle, as defined in Article 44 of this law, shall apply to transactions between related parties.
Income that is not subject to personal income tax
The following income is not subject to personal income tax:
a) the income received as a result of coverage under the mandatory social security and health insurance scheme;
b) financial assistance from public budgets for individuals with no income or low income, as defined in the relevant applicable legislation;
c) income exempted under international agreements ratified by the Assembly of the Republic of Albania;
c) financial compensation paid to property owners as compensation for expropriations carried out by the state in the public interest, or to former owners for the expropriation of their property in the past;
d) financial compensation paid to former political prisoners and their descendants;
dh) awards and prizes given by state institutions for achievements in science, sport, and culture;
e) scholarships for pupils and students;
e) compensation benefits obtained through final court decisions, compensation benefits under the insurance contract obtained in accordance with the law in force on insurance and reinsurance activities, as well as certain reimbursements for judicial costs;
f) revenues from support through grants and subsidies in agriculture and livestock farming with funds from the state budget or other sources.
Income from employment
Të ardhurat nga punësimi përfshijnë:
a) wages, bonuses, and benefits arising from employment or similar relationships, including the transfer or loan of employees, regardless of whether these relationships are current, future or past, and where the taxpayer is required to follow the payer's instructions in order to receive the payment or compensation;
b) directors' remuneration, remuneration as a member of a company's board of directors or legal body, as well as remuneration for management and participation in supervisory boards;
c) the rewards and benefits paid by the company to its partner for the work performed for that company;
c) the income earned by a self-employed individual if:
i. 80 percent or more of the revenues earned are received directly or indirectly from a single client; or
ii. 90 percent or more of total revenues earned are derived from fewer than three clients.
The letter “ç” does not apply if the self-employed individual provides services exclusively to non-residents of the Republic of Albania or solely to entities that do not have a permanent establishment in the Republic of Albania. In that case, the self-employed individual is considered to derive business income.
Të ardhurat nga punësimi, përveç parashikimeve të pikës 1 të këtij neni, përfshijnë edhe pagesat që kryhen në rastet e humbjes ose ndërprerjes së marrëdhënieve të punësimit.
Kur të ardhurat nga punësimi i paguhen një të punësuari nëpërmjet një agjenti punësimi jorezident në Republikën e Shqipërisë dhe shuma e përgjithshme e paguar përfshin tarifën e komisionit, të ardhurat nga punësimi konsiderohen të jenë së paku 80% e shumës së përgjithshme.
Të ardhura të përftuara nga punësimi nuk do të konsiderohen si të tilla në rastet kur:
a) the value of meals consumed, non-alcoholic beverages, work equipment, medical treatment, and other benefits provided, in the premises where operations are carried out by or on behalf of an employer, are available to all employees under similar conditions and create better working conditions for employees;
b) reimbursement of travel and accommodation expenses and travel per diems is paid in accordance with the procedure set forth in the applicable legislation or in the secondary regulations issued under this law.;
c) compensation for employees in the event of illness, accidents, or living hardships, in accordance with the provisions of the relevant applicable legislation and the provisions of secondary regulations implementing this law.;
c) contributions for life, health, and workplace accident insurance;
d) the income arising from salaries and compensation for employment relationships of consular officials, diplomats, or similar personnel of third countries and international organizations, who, while performing their official functions in the Republic of Albania, in accordance with international conventions or agreements ratified, accepted, or signed by the Republic of Albania or the Council of Ministers, enjoy diplomatic status.
Annual taxable income from employment relationships is defined as the total amount of taxable employment income received by a taxpayer during the tax year.
Shuma e pagave dhe të ngjashme me to të paguara në një pagesë të vetme në një vit të caktuar përbëjnë të ardhura të viteve për të cilat janë paguar.
Source: General Directorate of Taxes.