In addition to salary, the individual also declares income from rent, investments and rental and investment income in the individual declaration, interest, dividends, gains from the sale of property or securities, and income sourced outside Albania. For many of them, tax is withheld at source by the payer, so the declaration serves for reconciliation and does not impose a second liability on the same income.
This page shows how rent paid by an individual is taxed and why the reference price changes the base, how tax withheld at source is reconciled with the actual annual tax, and how interest and dividends are treated, how capital gains from the sale of the asset are calculated, and why double taxation falls under the same recalculation logic.
Read also: Who must file the individual declaration and when.
| Type of income | The | Who bears the tax |
|---|---|---|
| Real estate rental | 15% | The business tenant, or the owner himself. |
| Deposit interest | 15% | Bank, at the source |
| Dividend | 8% | The company that distributes at the source |
| Honoraria and other income from investments | 15% | Business payer, at source |
| Gain from the disposal of real estate | 15% | It is held at the moment of transfer of ownership. |
| Gain from the transfer of securities and virtual assets | 15% | The individual, when not held at the source |
The rate is the same regardless of the amount, so these income streams don't have brackets like wages. This means that an increase in rent or interest doesn't raise the rate, but only the base.
Rental income from real estate is taxed at 15%. When the tenant is a business, it acts as a withholding agent, meaning it withholds and remits the tax, while the owner only verifies that the withholding was done correctly. When the tenant is an individual, declaration and payment remain the owner's responsibility.
The taxable base cannot be lower than the minimum reference price approved by Council of Ministers Decision No. 469 of June 3, 2015. If the rent stated in the contract is below the reference price, the tax is calculated on the reference price rather than on the contract.
Apartment rented for 40,000 lekë per month, i.e. 480,000 lekë per year, when the reference price for the area is lower than the contract price. The 15% tax yields 72,000 lekë per year. If the tenant is a company, it withholds 72,000 lekë and the owner receives 408,000 lekë net. If the tenant is an individual, the owner declares and pays the same amount himself, i.e., 72,000 lekë.
An individual who rents out an apartment does not become a business for that reason. When the rental activity takes on an organized form, with multiple units and accompanying services, the classification may change and it becomes subject to the treatment of economic activity. This is evaluated on a case-by-case basis and is not determined by the number of units.
Withheld tax is an advance payment of an individual's liability made by the payer. On the tax return it is recorded as tax paid, and the result appears as the difference between the actual annual tax and the tax withheld.
This is where the statement's meaning for most individuals comes from. It does not impose a second tax on rent or dividends, but reconciles and highlights the excess or shortfall.
How is the reconciliation closed?
| The result of the statement | What's happening? |
|---|---|
| The withholding tax is greater than the actual tax. | The surplus is refunded within 60 days. |
| The withholding tax is less than the actual tax. | The difference is payable until March 31. |
| The tax was not withheld at all by the payer. | The obligation is declared and paid by the individual. |
| Proof of custody cannot be found. | Payment is required before delivery. |
Bank deposit interest is taxed at 15% and the tax is withheld by the bank at the time of payment. The individual reports the gross interest and the withheld tax on their return, and the outcome remains neutral when the withholding is accurate.
The dividend is taxed at 8.1% and withheld by the company that distributes it. The partner does not pay a second tax on the dividend on their return, but reports it for the full annual view and to meet the income threshold.
Individual with deposit interest of 50,000 lek and dividends of 1,000,000 lek. The bank withholds 15%, i.e., 7,500 lek. The company withholds 81%, i.e., 80,000 lek. Other income besides salary is 1,050,000 lekë, which exceeds the 50,000-lekë threshold, so filing is mandatory. The total withholding tax is 87,500 lekë, and the return reconciles it with no additional obligation when the withholding has been correctly applied.
Gain from the disposal of real estate is taxed at 15%. The base is not the sale price but the difference between the disposal value and the purchase cost. For the disposal value, the higher of the contract price and the reference price is taken.
Ownership transfer data is submitted to the tax administration by the 20th of the following month. Therefore, the sale of a property does not remain unknown to the administration, even if the individual does not declare it.
Sale of an apartment with a contract price of 11,000,000 lek, when the reference price for the area is 12,000,000 lek. The higher value is taken, i.e., 12,000,000 lek. The proven purchase cost is 9,000,000 lek. The taxable gain is 3,000,000 lek, and the 15% tax yields 450,000 lek.
Gain from the disposal of securities and virtual assets falls under investment income and is calculated on the difference between the sale price and the cost. When there is no resident withholding agent, the individual reports the tax liability.
Caution. The method for testing the cost of securities and virtual assets, as well as the treatment of exchanges between virtual assets, must be confirmed in Articles 16 and 17 of Law No. 29/2023 and in the implementing regulations before declaration. UNVERIFIED, to be confirmed before publication.
Read also: Crypto-assets and market regulation in Albania.
Dual employment follows the same logic as investment income: tax is withheld throughout the year by the payer and reconciled at year-end. When an individual has two employers, each withholds tax only on the wages it pays and does not take into account the other's payments, while deductions are claimed once a year.
The result is that the total withheld during the year rarely matches the actual annual tax. The annual payroll tax is 13.1% on the taxable base up to 2,040,000 lek and 23.1% on the excess, and it is calculated on the cumulative base, not on a pay-per-pay basis.
An individual with two employers, where employer A paid 1,200,000 lek gross per year and employer B paid 600,000 lek, for total annual income of 1,800,000 lek. The deductions are 360,000 lekë for the individual and 96,000 lekë for two children, totaling 456,000 lekë. The taxable base becomes 1,344,000 lekë, which remains below 2,040,000 lekë, so it is all taxed at 13.1% and yields 174,720 lekë. If, according to the certificates, the two employers withheld a total of 190,000 lekë, the individual has overpaid by 15,280 lekë and this amount is claimed in the declaration.
Read also: Deductions for children, education, and recognized expenses..
Rent is declared based on the contract value, while the minimum reference price is higher.
The owner believes that the individual tenant pays the tax, and the obligation remains undeclared.
The dividend is declared and taxed twice because the withholding tax is not recorded as paid.
Capital gain is calculated on the sale price, not on the difference with the purchase cost.
The cost of acquisition is not supported by documentation, so the entire amount realized is treated as gain.
Income from abroad is not declared, on the assumption that it was taxed at the source.
Withholding tax certificates are not collected, and reconciliation is done using estimated figures.
Yes. When the tenant is an individual and does not withhold tax, filing and payment of 15% remain the owner's responsibility, based on the higher of the contract price or the reference price.
Yes, the rent is reported along with the withholding tax. The declaration reconciles and does not impose a second tax when the withholding is accurate.
8%, withheld at source by the distributing company. On the statement it is shown together with the withheld tax.
On the gain, that is, on the difference between the disposal value and the purchase cost, at a rate of 15%. For the disposal value, the higher of the contract price and the reference price is taken.
The bank withholds 15% at source. Interest and withholding tax are reported on the statement when there is an obligation to report.
Because deductions are applied only once a year, each employer withholds tax on its own payments. The annual recalculation based on the amounts collected often results in a total that is lower than what was withheld.
In the category of investment income, on the difference between the sale price and the cost. The method for proving the cost is governed by law and implementing regulations before declaration.
If you are an Albanian tax resident, worldwide income is declared in Albania, while tax paid abroad is credited against your Albanian tax liability.
Law No. 29/2023 “On Income Tax,” as amended, Article 10 on categories of income, Articles 15 to 18 on investments, securities, virtual assets, and real estate, Article 24 on rates, Articles 25 and 26 on foreign tax credit and refund, Article 58 on payments subject to withholding including rent paid to individuals, Article 59 on withholding tax rates, Articles 61 and 67 on the declaration
Decision of the Council of Ministers No. 469, dated June 3, 2015, on minimum reference rental prices
General Instruction No. 26, dated September 8, 2023, as amended by Instruction No. 9, dated March 12, 2026, and Instruction No. 29/2018 on the transfer of ownership.
The text of Consolidated Law
Income tax, General Directorate of Taxes.