Withholding and Transferring Tax
Withholding tax on specified payments and transferring it to the tax authorities by the 20th of the following month. For dividends, the tax must be transferred within 3 months of the profit distribution.
Reporting and Documentation
Submitting declarations with details on beneficiaries and amounts withheld. Maintaining records and documents for potential tax audits.
Verification and Certificates
Requesting and storing Tax Residency Certificates for beneficiaries. Ensuring the accuracy of all data and declarations.
Employers also act as agents for payroll taxes and social security contributions.
Declaration Content:
The withholding tax declaration is based on the model specified in Annex No. 5 of the instruction and includes identifying data for:
The declaration covers all categories of entities, regardless of their specific tax status.
Withholding tax is applied to income from dividends, interest, royalties, gambling winnings, and rent, provided the beneficiary is an Albanian resident or a permanent establishment in Albania. This applies regardless of the beneficiary's status, except for exempted cases.
Tax is withheld on all royalties (copyrights, licenses, trademarks), irrespective of the beneficiary type.
Organizers of gambling activities must withhold tax on all player winnings and report accordingly to the tax administration.
Rent Tax is withheld when the lessor is an individual and the lessee is an entity, trader, or self-employed person with a NUIS. In transactions between two individuals, tax is not withheld at the source; the beneficiary must self-declare.
For services provided by individuals without a NUIS, tax is withheld according to Article 65.
No tax is withheld for:
For non-resident beneficiaries, tax is withheld on dividends, interest, royalties, gambling, construction, and performances, while respecting Double Taxation Avoidance Agreements. In the absence of such agreements, Albanian legislation applies.
Tax on Dividends and Profit Distributions
For payments related to dividends and profit distributions approved by the entity's governing bodies, the payer of the income (including NGOs and public entities that distribute profit) is required to withhold tax at the legal rate of 8%.
Tax on Other Income Categories
For any other category of income included in paragraphs 1 and 2 of Article 58 of the law (such as royalties, interests, rents, etc.), the withholding tax rate is 15%.
This rule applies to all entities, including NGOs and public entities, and must be implemented in accordance with the Law on Income Tax, regardless of the status of the beneficiaries, including individuals and non-profit entities.