Double taxation occurs when the same taxpayer pays tax on the same income in two different countries. This situation creates an unfair burden on businesses and individuals with cross-border activities, which is why countries enter into Double Taxation Avoidance Agreement (DTAA)<\/a> that coordinate how each income will be taxed in each state. Albania, like many other countries, has such a network of bilateral tax agreements with partner states, aiming to promote investment and trade without double taxation. The effective implementation of these agreements is key for the Albanian business community, especially now that the economy is becoming increasingly globalized.<\/p>\n\n\n\n In July 2024, the Ministry of Finance approved\u00a0Instruction No. 11, dated 07.23.2024<\/a>, which set the new criteria and procedures for the practical implementation of MSHTDs in Albania. This instruction comes nearly 20 years after the previous instruction (No. 6, dated 10.2.2004<\/a>) and reflects the legal changes and the country's new economic and fiscal reality. Most recently, in July 2025, this same directive was amended and supplemented with Instruction No. 15, dated 8.7.2025<\/a>\u00a0to address some practical ambiguities and to update the process according to current needs.<\/p>\n\n\n\n Hereafter, we will explain the main content of the instruction, the legal basis and key fiscal principles it presents; we will highlight recent changes and their reasons; as well as analyze the implementation of tax agreements in Albania to date \u2013 what challenges there have been and how the new instruction is expected to address them. <\/p>\n\n\n\n Furthermore, we will discuss the importance of FTAs for Albanian businesses, presenting the updated list of current agreements, a concrete step-by-step example of applying an agreement, a discussion on the domestic legal framework (including the hierarchy between national laws and international agreements), key risks of non-compliance\/misinterpretation, and recommendations for further improvements in line with international best practices.<\/p>\n\n\n\n Instruction No. 11\/2024<\/a>\u00a0It aims to clarify and unify the way the provisions of the MSHTDs are applied in Albania. It clearly defines the legal basis for implementation (based on Article 102(4) of Constitution<\/a> and in the laws in effect<\/a>and repeals the old instruction from the year 2004<\/a>, thus modernizing the approach after a long period of economic and legal developments. The new Guidance begins with a few essential definitions and principles that are key to the correct interpretation of bilateral tax agreements. These principles create a common language for tax professionals and businesses, so that the application of the agreements becomes uniform. Below are the four main concepts addressed in the Guidance:<\/p>\n\n\n\n To determine taxability, one must first determine the tax residency of the person (natural or legal). The guideline explains the term \u201cresident\u201d in the tax sense: a person or entity is considered Resident of a State <\/a>if they meet the legal criteria of that state (e.g., period of stay, center of vital interests, place of incorporation, etc.) Tax residents are required to declare and pay tax in their country on their global income, that is, on all income worldwide. In practice, this means that a business or individual resident in Albania is taxed in Albania on profits wherever they are earned (inside or outside the country). The residency principle focuses on the taxpayer: if they are a resident of Albania, then Albania has the right to tax them. for global revenues<\/a>, provided that there is no agreement that restricts these rights.<\/p>\n\n\n\n This principle complements the principle of residence and focuses on the location of the source from which the income originates. Under the source principle, any income or gain is initially considered taxable in the state where it is realized. This applies regardless of whether the recipient of the income is a resident elsewhere. The guidance provides illustrative examples: for example, income from real estate located in a state must be taxed in that state (the location of the property), regardless of where the owner resides. Similarly, if a foreign artist gives a concert in Albania and receives a fee, the source principle requires that this fee be taxed in Albania (where the activity took place) even if the artist is a tax resident elsewhere. This principle ensures that the state where the economy is generated (the sale, the service, the asset) receives its share of the tax. The combination of the residence principle and the source principle in the legislation of most countries is precisely why the concept of a digital tax arises. double taxation<\/a> when the entities operate cross-border.<\/p>\n\n\n\n When a person or company is a resident of one state (and consequently subject to global income tax there) but also earns income in another state (which taxes that income on a source basis), it may happen that The same income being taxed twice<\/a> \u2013 once from each state. The directive emphasizes that double taxation typically manifests in two forms: (a) legal double taxation, when the same person is taxed twice for the same income, once as a resident and once in the source state; and (b) economic double taxation, when the same income is taxed to two different entities (e.g., a company's profit is taxed and then the distributed dividends are taxed to the shareholders). <\/p>\n\n\n\n Also, legal double taxation can occur in the case of double residence \u2013 when two states, under the criteria of their laws, consider the same person to be a tax resident (e.g. an individual may simultaneously meet the residency criteria in both Albania and another country). In the absence of a resolution mechanism, a dual resident would be taxed fully in both jurisdictions.\u00a0DTAAs address precisely these situations by establishing rules on which state is considered the taxpayer's primary residence and how double taxation will be eliminated. <\/p>\n\n\n\n Typically, agreements provide that the source state either waives a portion of the tax (by reducing the withholding tax rate), or the state of residence gives the taxpayer a credit for the tax paid abroad, or exempts that income from domestic taxation. In both cases, the final result is that the taxpayer does not pay tax twice on the same income. The new guidance clearly presents these principles, making them understandable for its users.<\/p>\n<\/blockquote>\n\n\n\n One of the most important contributions of the guidance is the detailed explanation of the concept of \u201cpermanent establishment\u201d according to Article 5 of the Model. OECD<\/a> (also reflected in Article 5 of Law No. 29\/2023 \u201cFor Income Tax<\/a>\u201dThe permanent establishment is the key point that determines whether a nonresident business has a sufficient economic presence in Albania to be taxed here on the profits attributable to that presence. The guidance emphasizes that a company resident in another state can be taxed in Albania only if it has a permanent establishment in Albania and only on the income attributable to that establishment. The classic definition of a PE is \u201ca fixed place of business, through which a foreign entity carries on its activities permanently in the other state.\u201d. <\/p>\n\n\n\n This could be an office, branch, factory, workshop, construction site (for a determined period of time), etc. The instruction gives concrete examples: e.g., an Italian company performing maintenance services for medical equipment for a hospital in Albania, having regular staff and a warehouse of equipment on the hospital premises, will be considered to have established a permanent establishment in Albania. This implies that the profit attributable to the activity in Albania (e.g., services rendered to the hospital) will be taxed in Albania, while the rest of the foreign company's profit remains taxable only in its country of residence (Italy). <\/p>\n\n\n\n The OECD's concept protects both the Albanian tax administration (from foreign businesses operating here without registration) and foreign businesses (from unjustified taxation if their activity in Albania is peripheral or temporary). The guidance requires taxpayers to carefully assess their physical or economic presence in foreign countries to understand whether it constitutes a permanent establishment or not \u2013 a decision that then determines where profits will be taxed.<\/p>\n<\/blockquote>\n\n\n\n Besides these key concepts, Instruction no. 11 <\/a>It also addresses other general issues such as: definitions of terms frequently used in agreements (e.g., \u201cperson,\u201d \u201centity,\u201d \u201ccompetent authority\u201d), how different categories of income are treated (employment income, pensions, capital gains, etc., according to specific articles of the model agreements), as well as references to the Albanian Model Agreement for the Avoidance of Double Taxation. The latter (Albanian Model) is included in Annex 1 of the instruction as a guiding document for negotiators when Albania concludes new agreements. The model is primarily based on the OECD Model, with necessary adaptations for the Albanian context.<\/p>\n\n\n\n With these basic principles and definitions, the guidance aims to provide both tax authorities and businesses and their advisors with a unified theoretical framework for consistently interpreting tax treaties. This is particularly important because, in the absence of guidance, the terms of the agreements could be interpreted differently by various taxpayers, leading to uncertainty and the risk of non-compliance.<\/p>\n<\/blockquote>\n\n\n\n Beyond definitions, Instruction no. 11\/2024 <\/a>set out the concrete procedures that taxpayers must follow to implement a double taxation avoidance agreement in practice. The main focus here is on taxpayers resident in Albania (e.g., Albanian businesses) who conduct transactions with non-residents (foreign businesses or individuals) and wish to benefit from the tax reliefs provided by an Albanian DTTA with their country. The procedures ensure that the tax relief (e.g., non-payment of withholding tax or application of a reduced rate according to the agreement) is granted only when the conditions are met and is proven with regular and complete documentation.<\/p>\n\n\n\n The instruction provides that the taxpayer resident in Albania has the primary responsibility for the correct application of the treaty and must notify the Albanian tax administration in any case where he has applied the provisions of a double taxation agreement. This is done by submitting (electronically uploading) a package of supporting documents within specified deadlines. According to Article 115(3) of Law No. 9920\/2008 \u201cFor Tax Procedures<\/a>\u201dThe documentation must be submitted within the calendar year following the year in which the taxable transactions under the agreement were carried out. This means, for example, that for payments made during 2024 under an MSHTD, the documents must be submitted by December 31, 2025.\u00a0<\/p>\n\n\n\n The Law \u201cOn Tax Procedures\u201d also provides for an administrative fine if the taxpayer fails to submit the documentation for implementing the MSHTD within the prescribed deadline. Currently, this fine is relatively modest (e.g., around 10,000 lek\u00eb for failure to notify on time), but the main risk is not so much the fine as the possibility of losing the right to relief. If the documents are missing, the administration may not recognize the preferential treatment and may demand the full tax as if the agreement had never been implemented. Therefore, it is vital that companies comply with these deadlines and requirements. The guidance makes it clear that notifications are classified by risk by a dedicated structure within the General Directorate of Taxes. Low-risk notifications (e.g., routine cases with proper documentation) are handled more simply, while those with higher risk (e.g., very large amounts, complex structures, offshore locations, etc.) are subject to in-depth analysis and may be subject to subsequent audits. This risk-focused approach is in line with best practices, as it concentrates the administration's resources where potential abuses exist, while routine cases are simply monitored minimally.<\/p>\n\n\n\n Deri n\u00eb krijimin e plot\u00eb t\u00eb modulit elektronik p\u00ebr k\u00ebt\u00eb proces, administrata tatimore ka pranuar edhe dor\u00ebzimin e dokumentacionit n\u00eb form\u00eb hardcopy (let\u00ebr) ose me e-mail. Udh\u00ebzimi parashikoi nj\u00eb periudh\u00eb tranzitore ku\u00a0formulari i aplikimit (Aneksi 2)\u00a0mund t\u00eb dor\u00ebzohej i n\u00ebnshkruar n\u00eb let\u00ebr, derisa t\u00eb mund\u00ebsohej plot\u00ebsisht\u00a0formulari online (i ashtuquajturi \u201cAneksi 4\u201d). Me zhvillimet e fundit, pritet q\u00eb e gjith\u00eb procedura t\u00eb kryhet 100% online, \u00e7ka do t\u00eb thot\u00eb eliminim i dokumenteve n\u00eb let\u00ebr dhe thjesht\u00ebzim burokracie.<\/p>\n<\/blockquote>\n\n\n\n Also, the guidance (at point 4) describes the procedure for issuing the tax residency certificate to taxpayers resident in Albania who need one to prove their status in other states. This is the other side of the coin: when an Albanian business has income in a foreign country and wants to apply the treaty there (to avoid double taxation), it is usually required to submit a certificate of residence issued by the Albanian authorities. The guidance stipulates that the General Directorate of Taxes issues residence certificates for natural or legal persons resident in Albania within a specified timeframe after the applicant submits the application and supporting documents. The certificate, signed and stamped by the DPT, enables the taxpayer to prove their status as a resident of Albania to foreign authorities and thus claim the benefits of the relevant double taxation treaty. This procedure is purely administrative but very important, and in practice the DPT has proven efficient in issuing them, often within a few days.<\/p>\n\n\n\n In conclusion, section 11 of the guidance procedures establishes a clear framework of action: an Albanian taxpayer who wishes to avoid double taxation must follow the \u201cdeclare and document\u201d rules. This increases legal certainty for businesses (they know exactly what is required of them) and at the same time gives the administration the tools to monitor and control compliance, without hindering the flow of business with lengthy approval procedures.<\/p>\n\n\n\n As mentioned, basic instruction no. 11 has undergone a supplementary change in July 2025. Instruction No. 15, dated July 8, 2025<\/a>. was approved with the aim of further improving and clarifying certain implementation procedures of the MSHTD. This normative act is titled \u201cOn an amendment to the Minister of Finance's Instruction no. 11, dated 23.7.2024...\u201d, implying that it does not entirely replace the existing instruction, but modifies or adds specific points to it. What are these changes, in essence, and why were they made? Below we present the main points:<\/p>\n\n\n\n One of the main reasons for the change was the practical situation with the electronic tax system. Instruction no. 11 foresaw the transition to online declaration of documentation, but by mid-2025, the electronic portal still did not have a fully functional module for this purpose. As a solution, Instruction no. 15 confirmed that procedures for applying for MSHTD facilities will continue as before until the electronic system is fully operational. In other words, taxpayers must continue to submit the form (Annex 2) and supporting documents in the specified manner (even if this means uploading scans or physical submission) without waiting for a fully automated process. The goal was to avoid a vacuum or confusion: so that businesses do not stop implementing agreements due to uncertainty about the declaration method.<\/p>\n\n\n\n The change also paved the way for the introduction of a special electronic form (provisionally named Annex 4). This form is expected to eventually replace the current form (Annex 2) once e-filing is ready. Instruction no. 15 authorizes the tax administration to transition to the new format without needing another instruction, thus legally incorporating it in advance. This will allow for a faster transition towards fully digital filing. Once this module is activated, taxpayers are expected to simply fill in all information online (essentially replacing the submission of PDF documents with filling in fields on the tax portal). This innovation will significantly ease the workload for both businesses and the DPT itself (fewer documents to verify manually and the possibility of automatic data processing and analysis).<\/p>\n\n\n\n Since Directive no. 11 came into effect in the second half of 2024, the need arose to clarify some transitional situations. For example, for invoices issued before the directive came into effect (e.g., December 2023) but paid later, how should one proceed? With the amendment made, it was stipulated that invoices dated up to 12.31.2023 are treated according to old procedures (repealed Directive no. 6\/2004), while only new invoices (from 01.01.2024) are subject to the new rules. This clarification was necessary to avoid ambiguities and disputes between taxpayers and inspectors regarding the interpretation of transitional provisions.<\/p>\n\n\n\n During the 2024-2025 period, new laws have also come into effect (e.g., the new Law no. 29\/2023 \u201cFor Income Tax<\/a>\u201dwhich replaced the law of the year 1998<\/a>Instruction no. 15 makes several legal reference changes within the text to align with the terminology and articles of the new law. For example, if the 2024 instruction referred to the old article on permanent establishment, it now refers to Article 5 of the new Law 29\/2023. These are technical but important modifications for the coherence of the legal framework.<\/p>\n\n\n\n Instruction No. 11 itself had an Annex attached, which was a list of tax agreements in force. With the entry into force of new agreements (e.g., with Kosovo \u2013 signed in October 2022 and ratified in 2023), it was necessary to include these in the annex list as well. Instruction No. 15 reflected the most updated list of MSHTD (Double Taxation Agreements), adding the new agreements that came into force during 2022-2025 (e.g., with Kosovo, the United Arab Emirates, Egypt, Israel, etc., which we will discuss in the following section). In this way, the users of the instruction (tax inspectors and subjects) have all the countries with which Albania has active tax treaties in one place.<\/p>\n\n\n\n In general, the changes made with Instruction no. 15\/2025 do not overturn the basic philosophy of the process, but enrich it and make it more practical. They are a direct response to situations that arose in the first months of the implementation of the original instruction. This shows a dynamic approach from the Ministry of Finance and the State Procurement Office: after noticing the need for further clarifications in the field, they reacted with regulatory changes. Another benefit of this latest change is the increased confidence in businesses that the authorities are monitoring the implementation and are ready to further perfect the framework, which encourages better compliance with the rules.<\/p>\n<\/blockquote>\n\n\n\n Finally, it is worth mentioning that Directive No. 15\/2025 takes effect immediately upon publication in the Official Gazette, just like any other directive, and its effects are retroactive (i.e., for all declarations after July 2025). Notifications made before this date (under the rules of the original guidance) will continue to be handled according to the provisions in force at the time of submission, while after the amendments take effect, any notification or procedure will be carried out under the new unified framework. With this, the regulatory framework for implementing MSHTDs can be considered complete and stabilized (at least until future changes dictated by necessity or international developments).<\/p>\n\n\n\n How has the implementation of MSHTDs worked in Albania so far? What challenges has it encountered, and what has been lacking?\u00a0<\/p>\n<\/blockquote>\n\n\n\n To answer this question, we need to take a brief historical look. Albania signed its first double taxation avoidance agreements in the 1990s and early 2000s, as part of the country's opening to foreign investment. To implement them, Instruction no. 6 was issued in 2004, which, for its time, created a basic mechanism. That instruction stipulated that the General Directorate of Taxes (GDT) was the competent authority for interpreting the agreements and outlined some procedures (at that time, mainly manual).<\/p>\n\n\n\n However, two decades of practice revealed several key shortcomings:<\/p>\n\n\n\n Under the old rules, Albanian businesses often had to apply in advance to the tax administration for approval to benefit from preferential treaty rates. This involved physically submitting residence certificates and other documents to tax offices, which then had to be reviewed by officials and approved. In practice, this took time and often caused delays. Some businesses preferred not to take the initiative to apply for relief at all, choosing the safer route of paying the full tax (to then deal with refunds or credits, which was also complicated). Therefore, the relief was theoretically available, but in practice it was utilized less than expected due to procedural barriers.<\/p>\n\n\n\n Until recently, communication with the tax administration in this regard has been traditional (on paper). There was no online platform where the entire process could be carried out. This not only made the process slow but also brought uncertainty (e.g., documents could easily be missing or \u201clost\u201d in correspondence). The lack of a centralized database with applied cases made it difficult for the DPT to conduct general analyses on the use of agreements.<\/p>\n\n\n\n Many small and medium-sized businesses were not fully aware of the existence or use of tax treaties. There were instances where a company paid withholding tax on an offshore payment, even though a treaty existed that eliminated or reduced that tax, simply because it did not know the procedure to follow. On the other hand, there were also cases of subjective or inconsistent interpretations by different tax inspectors due to the lack of detailed legal guidance. Prior to Directive no. 11, there was no official commentary in Albanian on the terms of the treaties \u2013 models were usually consulted. OECD<\/a> apple United Nations<\/a>, but not every professional had sufficient access or knowledge about them. This created room for misinterpretations. For example, the concept of \u201cresidence\u201d or \u201cpermanent establishment\u201d could be misunderstood, leading to either non-benefit when it should have been, or unjustified benefit.<\/p>\n\n\n\n For Albanian businesses operating beyond borders \u2013 whether by exporting goods or services, investing in foreign subsidiaries, or receiving investments and financing from abroad \u2013 double taxation avoidance agreements are vital. They provide a protective \u201cumbrella\u201d against double taxation, as well as a clear legal framework for how and where each type of income will be taxed. Below we list some of the main reasons why DTAAs are important:<\/p>\n\n\n\n This is the basic function. Without treaties, an Albanian company that, for example, earns income in another country (e.g., dividends from a subsidiary in Kosovo, or profit from a contract in Germany) would be taxed in both the other country and Albania for the same amount. This can make the investment or transaction economically unprofitable. Thanks to Double Taxation Treaties (DTTs), countries agree on how to share the tax: either one country waives the tax, or both reduce the burden and share it between them. <\/p>\n\n\n\n For example, in many agreements, dividends paid by a subsidiary in country A to a parent company in country B are taxed at a reduced rate (e.g., 5%) in country A (compared to the domestic rate, e.g., 15%), and then country B either exempts or credits the parent company for the 5%tax paid abroad. In this case, the parent company in total pays tax only once (effectively that 5% ), instead of paying 15% abroad + 15% domestically (which would lead to ~28% effectively if the agreement were not in place). In this way, the tax cost is significantly reduced and the investment's profitability is increased.<\/p>\n<\/blockquote>\n\n\n\n An Albanian business that knows its profits from abroad will either be credited in Albania or exempted, can offer more competitive prices or develop more aggressive expansion strategies. If, for example, an Albanian engineering company knows that the services it will export to country X will not be taxed twice, it can enter that market with more confidence and offer rates that reflect only the tax of one country. Conversely, tax uncertainty would make it calculate a \u201csecurity premium,\u201d i.e., a higher price, which could penalize it in international tenders.<\/p>\n\n\n\n When foreign investors evaluate a country, they also pay attention to that country's network of tax agreements. Since the 1990s, Albania has entered into agreements with most major investors (such as Italy, Greece, Turkey, EU countries, etc.), making it more attractive to them. This is because an investor, for example from France, knows that his profit in Albania will not be taxed twice (once in Albania and then again in France), but only once \u2013 depending on the case, either only in Albania with a credit in France, or with a low rate here and the rest there. This avoidance of double taxation is often formalized in investment agreements: the investor demands guarantees that they will have the protection of the MSHTD for repatriating profits, paying interest, etc. Thus,\u00a0MSHTDs encourage capital inflows into the country by allaying fears of excessive taxation.<\/p>\n\n\n\n It is worth noting that these agreements not only aim to avoid double taxation but also to prevent tax evasion (this is also stated in their titles). Specific provisions within them (such as the information exchange clause) allow tax administrations to cooperate in catching those who attempt to hide income across borders. For honest businesses, this is certainly a positive development as it creates a level playing field where dishonest competitors have less room to avoid taxes. In recent years, especially with global initiatives such as\u00a0BEPS<\/a>\u00a0The OECD\/G20 Base Erosion and Profit Shifting (BEPS) project also views tax treaties as a tool against aggressive tax planning. Albania, through its participation in the BEPS Forums and ratification of the Multilateral Convention,MLI<\/a>) in 2020, has shown its commitment in this regard (more on this in the recommendations section).<\/p>\n\n\n\n Agreements often include a procedure called a Mutual Understanding Procedure (Mutual Agreement Procedure<\/a>), where the tax authorities of both countries consult to resolve specific cases of double taxation that may arise or the interpretation of the treaty. For businesses, this means that if they find themselves in a situation where it appears that both countries are claiming tax, they have a diplomatic-legal mechanism for resolution without resorting to private arbitration. <\/p>\n\n\n\n PS: If a person is considered a resident of both countries, the authorities of those countries can agree on where that person should be considered a primary resident according to the treaty rules, resolving dilemmas. This ensures that businesses do not fall victim to \u201cping-pong\u201d between two administrations, but rather have a unified voice regarding their obligations.<\/p>\n<\/blockquote>\n\n\n\n In the Albanian context, the importance of MSHTDs is also seen in the profile of companies that use them. It is mainly large and medium-sized businesses that have cross-border transactions \u2013 such as manufacturing companies that export, construction\/infrastructure companies that receive consulting from foreign specialists, banks connected to international groups (e.g., paying interest and dividends abroad), IT companies that receive cloud services from abroad, etc. For all of these, applying the treaties can save considerable amounts of money. But even for certain individuals, e.g., Albanian professionals working as freelancers for clients abroad, agreements can avoid double taxation of their personal income. <\/p>\n\n\n\n A typical case: an Albanian consultant works 4-5 months a year in an EU country; the treaty may stipulate that if they do not exceed 183 days there and their salary is not paid by a resident of that country, they are not taxed there \u2013 thus, they are only taxed in Albania as a resident, avoiding double taxation).<\/p>\n<\/blockquote>\n\n\n\n Another aspect is that double taxation agreements are closely linked to economic and diplomatic relations. Albania has prioritized negotiations with states with which it has the highest trade exchanges or mutual investment interest. This is why, for example, the treaties with Italy, Greece, Turkey, North Macedonia, Kosovo, etc., are among the earliest. In fact, the agreement with Kosovo had long been a request of the business community, but was finalized relatively late (signed in 2022, entered into force in 2023). \u2013 however, now that it is in force, it is expected to give a positive boost to bilateral trade and investments between the two countries. An Albanian investor who opens a company in Kosovo now knows that his profits will not be taxed twice, and vice versa for Kosovars in Albania. Likewise, the new agreement with the United Arab Emirates (entered into force in 2019) was important for encouraging Emirati investments in strategic sectors in Albania (e.g., the Port of Durr\u00ebs, energy, tourism).<\/p>\n\n\n\n In conclusion, Double Taxation Treaties are a necessary financial infrastructure for businesses in a globalized world. They reduce the cost of doing international business, increase legal certainty, and strengthen cooperation between countries. For a small country like Albania, which wants to attract foreign capital and encourage its own companies to broaden their horizons, these agreements are both a competitive advantage and a necessity.<\/p>\n\n\n\n Since 1993, when the first tax agreement (with Poland) was ratified, Albania has continuously expanded its network of treaties. Currently (2025), our country has over 40 double taxation avoidance treaties ratified and in force with states from around the world. boot<\/a>. <\/p>\n\n\n\n Albania has Social Security Agreements with almost all major European countries. These include Italy (in force since 2000), Greece (2001), Germany (2012), France (signed in 2021, already ratified), Great Britain (2014), Austria (1993), Switzerland (2000), Sweden (2004), Norway (2009), Finland (ratified ~2018), Denmark (no direct agreement to date), Belgium (recently entered into force ~2022), Netherlands (1999), Spain (2011), Portugal (still without a bilateral agreement), Poland (1995).l<\/a>, Romania (1995), Hungary (1996), Bulgaria (1999), Croatia (1999), Slovenia (2005), Slovakia (2016), Czechia (1997), Moldova (2005), and the former Yugoslav countries: Serbia and Montenegro (inherited agreement dating from 2004, which continues to be applied with each state after independence), North Macedonia (1999), Bosnia and Herzegovina (ratified and entered into force ~2022), and most recently Kosovo (2023). These European agreements cover the vast majority of Albania's trade and investment exchanges. Few exceptions remain (e.g., there is an agreement with Ireland, but also with Iceland; meanwhile, there are no tax treaties with very small countries like San Marino or Liechtenstein, but these have limited practical impact).<\/p>\n\n\n\n It is worth noting that Albania does not yet have a tax agreement with the United States of America. Although there have been discussions and mutual desire, a treaty with the USA has not materialized (the USA generally enters into tax treaties carefully and with few smaller countries). Nevertheless, American investments in Albania (e.g., in the banking or energy sectors) are often structured through European branches of American corporations, thus utilizing the agreements Albania has with European countries. As for North American countries, Albania signed an agreement with Canada in 2021, but it has not yet entered into force (pending ratification by the Canadian side). We do not have bilateral tax agreements with Latin American countries, which reflects the limited economic exchanges with them.<\/p>\n\n\n\n Albania has a considerable number of treaties in Asia. Among the most important are those with China (1994, renegotiated in 2011), with Turkey (1997), with India (2013, still not in force until recently due to procedures \u2013 ratified by Albania in 2013, and entered into force after the exchange of notes in 2014), with Japan (no agreement yet, but an Investment Protection Treaty has been signed which indirectly adds fiscal discipline), with South Korea (2006), with Malaysia (1995), with Singapore (2012), with the United Arab Emirates (2014, entered into force in 2014), with Kuwait (2014), with Qatar (2013), with Saudi Arabia (2019), with Israel (2021), with Azerbaijan (2010) and Georgia (2012). These treaties are particularly helpful in the hydrocarbon trade sector (e.g., investors from the Middle East) and in fostering economic cooperation with emerging Asian countries. Among the Asia-Pacific region countries, Australia and New Zealand remain without an agreement with Albania, but the impact of this gap is currently small.<\/p>\n\n\n\n The main agreement on this continent is with Egypt (2010, entered into force in 2011). Egypt is a moderate trading partner, but the agreement is of geostrategic importance. There are no treaties yet with other African countries (e.g., South Africa, Nigeria), although future investment opportunities may make initiating them desirable.<\/p>\n\n\n\nContent of Directive No. 11 (07.23.2024) and Key Principles<\/h1>\n\n\n\n
The principle of tax residency<\/strong><\/h2>\n\n\n\n
The principle of the source of income<\/strong><\/h2>\n\n\n\n
The concept of double taxation<\/strong><\/h2>\n\n\n\n
\n
Permanent Set (PS)<\/strong><\/h2>\n\n\n\n
\n
\n
Implementation Procedures for Agreements and Required Documentation<\/h1>\n\n\n\n
\n
Latest Changes: Directive No. 15 (07.08.2025) and Justification<\/h1>\n\n\n\n
Extension of the transitional period and transition to the electronic system<\/strong><\/h2>\n\n\n\n
Formalization of the new electronic form (Annex 4)<\/strong><\/h2>\n\n\n\n
Clarifications of deadlines for specific cases<\/strong><\/h2>\n\n\n\n
Consolidation of the legal framework with other fiscal changes<\/strong><\/h2>\n\n\n\n
Update of the list of agreements and annexes<\/strong><\/h2>\n\n\n\n
\n
The Implementation of Double Taxation Agreements in Albania: Experiences and Lessons<\/h1>\n\n\n\n
\n
Slow and bureaucratic procedures<\/h2>\n\n\n\n
Lack of computerization<\/h2>\n\n\n\n
Failure to comply and inconsistent interpretation<\/h2>\n\n\n\n
The Importance of Double Taxation Agreements for Albanian Businesses with International Activity<\/h1>\n\n\n\n
Elimination of double taxation<\/strong><\/h2>\n\n\n\n
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Increasing the international competitiveness of Albanian businesses<\/strong><\/h2>\n\n\n\n
Attraction of foreign investments and partnerships<\/strong><\/h2>\n\n\n\n
Preventing international tax evasion<\/strong><\/h2>\n\n\n\n
International tax dispute resolution<\/strong><\/h2>\n\n\n\n
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Current Panorama: Updated List of Albania's Tax Agreements<\/h1>\n\n\n\n
Europe (BE and the Balkans)<\/strong><\/h2>\n\n\n\n
North and South America<\/strong><\/h2>\n\n\n\n
Asia and Oceania<\/strong><\/h2>\n\n\n\n
Africa<\/strong><\/h2>\n\n\n\n
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