Tax residency is the first question, because it determines every other question. An Albanian tax resident is taxed on worldwide income, while a non-resident is taxed only on income sourced in Albania. For an individual, the law measures two things: days of residence and place of abode. For a company, the law measures the place of incorporation and the country from which its activities are managed.
This page explains the 183-day rule, the permanent residence criterion, entity residency and effective management, the consequences of residency on worldwide income, and the documents that prove residency.
Read also: How the agreement is implemented and how to obtain the residence certificate.
An individual is a fiscal resident of Albania when they stay in Albanian territory for 183 days, or when they have a permanent residence in Albania. Only one criterion is required. Nationality does not matter, so a foreign national can be an Albanian fiscal resident while an Albanian national may not be.
Individual's tax residency
| Situation | Result |
|---|---|
| Stay 183 days or more | Tax resident |
| Sustainable settlement in Albania | Tax resident, even with a shorter stay. |
| Short stay, no permanent residence | Non-resident |
| Residence under Albanian law and under a foreign law simultaneously. | It is resolved by the relevant agreement. |
The rule measures physical presence in Albanian territory. When the days of stay reach 183, the individual is treated as a fiscal resident and his obligations extend to worldwide income. The days are counted based on travel documents, lease agreements, utility bills, and any other evidence of presence.
The second criterion does not count days. When an individual has a stable residence in Albania—that is, a permanently available dwelling and a genuine center of family life—he can be treated as a resident even if he stays fewer than 183 days. This is the case of a person who works abroad during the year but has his family and residence in Albania.
A company is considered resident when it is incorporated in Albania, or when the management and control of its activities are carried out from Albania. Here too, only one criterion is required, so the place of registration is not the definitive answer.
The company registered in Albania is a resident from the date of incorporation, regardless of where the partners are located or where its turnover is generated. It is taxed on its worldwide profit at a rate of 15%.
The second criterion looks at where decisions are made. When management meetings, payment orders, contracts, and client communications take place in Albania, a company registered abroad may be treated as a resident of Albania. For groups with Albanian ownership and companies abroad, this is the first point of analysis.
Read also: Profit tax rates by business form.
The resident declares worldwide income, namely salary, rent, dividends, interest, and capital gains, regardless of the country in which they were earned. A non-resident declares only income sourced in Albania. This is the biggest practical difference for a foreigner moving to Albania, because the reporting obligation also extends to income that existed before the move.
Resident and non-resident, what is declared
| The issue | Tax resident | Non-resident |
|---|---|---|
| Declared income | Worldwide revenues | Only Albanian source |
| Tax paid abroad | Credit is allowed within the limits of Albanian tax. | Does not count |
| The company's profit | Global profit, 15% | Gain of permanent residence, 15% |
| Controlled foreign company | Controlled under Article 19 | Outside the scope of Albanian law |
Individual who becomes an Albanian tax resident during the year, with employment income from abroad of 2,400,000 lekë. The personal deduction of 360,000 lekë reduces the taxable base to 2,040,000 lekë, which remains within the 13.1% bracket and results in 265,200 lekë of Albanian tax. The foreign tax paid of 200,000 lekë is fully credited because it is below the threshold, so 65,200 lekë is paid in Albania. Had the individual been a nonresident, this income would not have been declared at all in Albania.
Read also: Annual Individual DIVA Statement: Who files it and how to complete it.
Residency isn't proven with a single sentence; it's proven with documents. When the Albanian tax administration or the administration of another country asks, the file must be able to respond without having to be assembled on the spot.
✔ Travel documents and entry and exit stamps showing the days of stay.
✔ Rental agreement or title deed for the residence in Albania
✔ Energy, water, and internet bills in the individual's name
✔ Residence permit, when it exists, as additional evidence and not as a criterion of residence
✔ Employment or service contract indicating where the activity is carried out.
✔ For the company: management decisions, minutes, and the address from which contracts are signed.
This situation occurs more often than one might think, because two laws can be complied with simultaneously. The solution is found in the double taxation avoidance agreement between Albania and the other country, and it requires a residence certificate from the administration of the country where residency is claimed.
Read also: Certificate of residence, documentation, and practical steps.
Residence is confused with citizenship or with a residence permit, whereas the law measures stay and domicile.
Only business days are counted, and weekends and vacations spent in Albania are excluded.
The permanent residence criterion is overlooked, and the person with a family in Albania considers himself a non-resident because he stayed fewer than 183 days.
An individual who moves to Albania declares only Albanian income, while as a resident he is required to report worldwide income.
A company registered abroad but managed from Albania is treated as entirely foreign.
Residence documents are collected only when the administration asks for them, or when certain evidence can no longer be found.
Tax paid abroad is credited without limit, while the cap is the Albanian tax on the same income.
When you stay in Albania for 183 days, or when you have a permanent residence in Albania. Only one criterion is required.
No. The law measures residence and domicile, not the passport.
Yes. The resident declares worldwide income. Tax paid abroad is credited, up to the limit of the Albanian tax on the same income.
You may be, because permanent residence is a criterion independent of the number of days. The case is evaluated based on concrete documents of residence and family.
When it is established in Albania, or when management and control are exercised from Albania. Only one criterion is required.
Yes, when it is actually managed from Albania. In that case, it is treated as a resident and taxed on its worldwide income at 15.1%.
Travel documents, housing contract, utility bills in your name, employment contract, and, for the company, management decisions.
The solution is required under the agreement between the two countries and requires a residence certificate. Write to us with your circumstances, and we will respond regarding your specific case.
Law No. 29/2023 "On Income Tax", as amended, section 4 on source of income, section 8 on residence of an individual, section 19 on controlled foreign entities, section 22 on deductions, section 24 on rates, Articles 25 and 26 on the credit for foreign tax and refund, Article 28 on entity residency, Article 41 on the corporate rate
General instructions No. 26, dated September 8, 2023, as amended by Directive No. 9, dated March 12, 2026
Instruction No. 11, dated July 23, 2024, and Annex 2, for the implementation of double taxation avoidance agreements
The text of Consolidated Law.
Income tax, General Directorate of Taxes.