Exempt income for individuals

The following information is valid and applicable until December 31, 2023, following the entry into force of the new Law No. 29/2023 On Income Tax. Please browse our website for more details and updated information at: https://alprofitconsult.al/tatime/

The following income is exempt from personal income tax:

1. Incomes received as a result of coverage under the mandatory social security and health insurance scheme, as well as financial assistance for individuals with no income or low income.
2. Scholarships for students and pupils.
3. Benefits received in cases of illness or misfortune, in accordance with the provisions of the applicable legislation in force.
4. Compensation received by landowners, including monetary or in-kind payments, in return for expropriations carried out by the state for public interest purposes.
5. Incomes exempt under international agreements ratified by the Assembly of Albania.
6. Incomes received as a result of financial compensation for former owners and former political prisoners.
7. Contributions made by the employer for the life and health insurance of employees.
8. Benefits for damages obtained through final court judgments, as well as certain reimbursements for litigation costs.
9. Incomes received by state institutions for achievements in science, sports, and culture.
10. The transfer of ownership rights in agricultural land from a registered farmer to a farmer or to a natural or legal person engaged in agricultural activity.
11. Transfer of ownership rights within the gender-based relationship of husband, wife, and child, through gift and/or waiver of property, when the property derives from the compulsory co-ownership acquired under Law No. 7501 of 19.7.1991, “On Land,” as amended.
12. Incomes derived from the transfer of ownership rights to a dwelling and/or land within a family's blood relationship—spouse, child—only once per beneficiary, through gift and/or waiver of the property.
13. The contribution made by each member of a voluntary pension fund up to the amount specified in the law on voluntary pension funds.
14. Return on investment, including capital gains from investments made with the pension fund's assets, during management by the management company.

Source: General Directorate of Taxes.