{"id":31445,"date":"2026-01-15T21:05:33","date_gmt":"2026-01-15T21:05:33","guid":{"rendered":"https:\/\/alprofitconsult.al\/?p=31445"},"modified":"2026-01-15T21:05:33","modified_gmt":"2026-01-15T21:05:33","slug":"annual-declaration-child-and-educational-expense-reimbursement-rules-beneficiaries-exemptions","status":"publish","type":"post","link":"https:\/\/alprofitconsult.al\/en\/deklarata-vjetore-diva-rimbursimi-per-femijet-dhe-shpenzimet-arsimore-rregullat-perfituesit-perjashtimet\/","title":{"rendered":"Annual Individual Income Tax Return (DIVA): Refunds for Children and Education Expenses (Rules, Beneficiaries, Exceptions)"},"content":{"rendered":"

The Annual Individual Income Tax Return (DIVA) is the annual return through which individuals declare all income earned during the year and determine their final personal income tax liability. Through this return, the annual tax is recalculated by taking into account all income sources and the tax deductions allowed by law, and by comparing the tax already paid during the year with the recalculated tax, in order to determine whether an additional payment is due or a refund is applicable.\nWith the entry into force of the new Income Tax Law (Law No. 29\/2023<\/a>), new tax relief measures have been introduced that directly affect families with dependent children. These measures specifically include tax deductions and refunds related to the costs of raising and educating children. The sections below explain how this scheme operates, who is eligible to benefit, what has changed, and how to complete the annual tax return in order to claim the applicable benefits.<\/p>\n\n\n\n

What is DIVA and why do you need to file it?<\/h2>\n\n\n\n

DIVA is the annual personal income return. If you have earned income above a certain threshold, had more than one employer, or had income that was not taxed at source, the law requires you to file this return within the deadline (by March 31 of the following year). The purpose is to allow the tax administration to recalculate your tax \u2014 that is, to compare how much tax you paid during the year (e.g., withheld from your salary each month) with how much you should have paid in total after combining all income.<\/p>\n\n\n\n

If during the year you paid less tax than required, the result will show a tax liability. If you paid more tax than required (for example, because you received additional tax deductions), a credit balance is created \u2014 meaning the tax authorities owe you money that will be returned as a refund. In this way, DIVA ensures that each individual pays exactly the lawful amount of tax \u2014 no more and no less.<\/p>\n\n\n\n

Who is required to file?\nAccording to the new law, you must complete DIVA if you meet at least one of the following conditions:<\/p>\n\n\n\n

High Income<\/strong><\/h3>\n\n\n\n

You have annual gross income over 1,200,000 ALL (from any source: salary, rent, dividends, bank interest, capital gains, gambling, etc.). This threshold was 2,000,000 ALL but has been reduced to 1,200,000 ALL starting with income for 2024.<\/p>\n\n\n\n

Multiple Employment<\/strong><\/h3>\n\n\n\n

You have been employed by more than one employer simultaneously, regardless of the total amount of your income. Even if your combined salary is below 1,200,000 ALL, the fact that you had two (or more) concurrent salaries requires you to file, because your tax must be recalculated on the total.<\/p>\n\n\n\n

Untaxed Income During the Year<\/strong><\/h3>\n\n\n\n

You have earned income over 50,000 ALL that was not taxed at the time of payment. This applies, for example, to rental income (when the tenant is an individual and no tax was withheld), foreign income, or any other income where tax was not withheld at source. These cases must now be declared and taxed through DIVA.<\/p>\n\n\n\n

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Even non-residents who have earned taxable income in Albania must submit this return.<\/p>\n<\/blockquote>\n\n\n\n

If you do not file the return at all by the legal deadline, you are fined 3,000 ALL. Also, if the return shows tax owed that you have not paid on time, you will be charged late payment interest and penalties. Therefore, it is important to file DIVA on time if you are required to not only to avoid fines but also because you may be entitled to refunds or tax deductions that are due to you.<\/p>\n\n\n\n

How refunds work for dependent children and children\u2019s education expenses<\/h2>\n\n\n\n

The newest tax reliefs (introduced by the new law) relate to tax compensation for families with dependent children. This scheme begins to be applied to income for the year 2025 and onward, which means that we will see it in practice for the first time in the return filed in March 2026.\u00a0<\/p>\n\n\n\n

How it works\nWhen you complete DIVA, you will be able to declare a certain amount as a deductible expense for each dependent child under 18 and for their education expenses. These declared expenses reduce your annual taxable base, the tax is recalculated, and compared with the tax you paid during the year. If the recalculated tax is lower than what you actually paid, the difference is returned to you as a refund by the tax administration.<\/p>\n\n\n\n

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So, the state does not give a fixed cash amount directly per child, but rather reduces the tax you paid by deducting 48,000 ALL less taxable income for each child and up to 100,000 ALL for education expenses as deductible items. This reduction in the taxable base causes the recalculated tax to be lower than the tax that was withheld without these deductions.\u00a0<\/p>\n<\/blockquote>\n\n\n\n

Example\nIf during 2025 your salary was taxed normally every month, when you file in 2026 and deduct the amounts for the children, it may turn out that you paid, for example, 30,000 ALL too much in tax compared to what you should have paid. You have the right to get this 30,000 ALL back from the tax authorit<\/p>\n\n\n\n

The Tax Administration has stated that after you complete the return with these deductions, if a credit balance results (overpaid tax), you can submit a request and within 3 months receive the refund. Practically, the money you overpaid in tax will be transferred to your bank account (or may be offset against other tax liabilities, according to the rules).<\/p>\n\n\n\n

Important\nThe refund is not automatic \u2014 you must declare the children and expenses correctly and request the refund after the return is confirmed. Also, the compensation is not unconditional: you must have documentation proving the education expenses (invoices, payment receipts to schools, etc.), and the child must be legally in your custody.<\/p>\n\n\n\n

Who benefits and who is excluded from these deductions?<\/h2>\n\n\n\n

Primary beneficiaries of this scheme are resident parents in Albania with dependent children under 18. The law provides that each child under 18 grants parents the right to a 48,000 ALL deduction from taxable income. Parents can also deduct up to 100,000 ALL per year for education expenses for children, such as school fees, books, courses, uniforms, etc.\nHowever, not all parents benefit equally \u2014 there are important limitations:<\/p>\n\n\n\n

Annual income over 1.2 million ALL<\/strong><\/h3>\n\n\n\n

If your annual income is high (over 1,200,000 ALL), you benefit only from the child deduction (48,000 ALL per child), but you do not benefit from the education expense deduction. The rationale is that those with higher incomes have already benefited intrinsically from personal tax allowances (e.g., higher-earning individuals pay lower effective tax due to lower marginal impact) and the additional education deduction has been limited for them.<\/p>\n\n\n\n

Annual income over 1.2 million ALL<\/strong><\/h3>\n\n\n\n

Parents with lower or middle annual incomes (\u2264 1,200,000 ALL per year) receive both benefits: 48,000 ALL for each child, and up to 100,000 ALL in total for education expenses per year. Even if you have more than one child, the maximum amount for education remains 100,000 ALL per year (it is fixed, regardless of the number of children).<\/p>\n\n\n\n

Only one parent claims the deduction<\/strong><\/h3>\n\n\n\n

If children are under the custody of both parents, the deductions for children and education can only be claimed by one parent, not both. Specifically, the law and the instruction require that the deductions be taken by the parent with the higher annual income. This is to prevent double claiming of the same benefit. The other parent cannot declare these deductions in their own DIVA.<\/p>\n\n\n\n

Children must be legally \u201cdependent\u201d<\/strong><\/h3>\n\n\n\n

This means the child must be listed as dependent in the taxpayer\u2019s official records (e.g., family certificate) and must be under 18 during the relevant fiscal year. If the child turned 18 during the year, they are not considered dependent for that year (the law clearly refers to <18). Thus, once a child turns 18, they are no longer counted for this compensation.<\/p>\n\n\n\n

Documentation of education expenses<\/strong><\/h3>\n\n\n\n

To claim the 100,000 ALL education expense deduction, you must have documents proving that you incurred the expenses for the child\u2019s education during the relevant year. The tax administration advises: keep payment invoices for school fees, extracurricular courses, books, school transport, etc., throughout the year. Then, when completing DIVA, declare the total of these documented expenses (up to the 100,000 ALL limit). If you do not have invoices, the deduction may not be accepted in a tax audit.<\/p>\n\n\n\n

Example<\/strong><\/h2>\n\n\n\n

A family where both parents earn 1.5 million ALL per year and have one child will not benefit from the 100,000 ALL education deduction, but will benefit from the 48,000 ALL child deduction. In another family where the primary breadwinner earns 800,000 ALL per year and has two children, that parent can claim both deductions: 2 \u00d7 48,000 ALL = 96,000 ALL for the children + up to 100,000 ALL for education. This significantly reduces the tax owed for that year, possibly even resulting in a refund.<\/p>\n\n\n\n

How to file the DIVA return<\/h2>\n\n\n\n

How is DIVA submitted?\nThe process is carried out online. p\u00ebrmes portalit t\u00eb tatimeve (e-filing).<\/a> Filing process\nDIVA is filed online through the tax authority\u2019s e-filing portal. You must identify yourself with your taxpayer identification number \u2014 for residents this is the personal ID number. The return is completed electronically by entering income in the appropriate fields (primary salary, secondary salaries, rent, dividends, interest, etc.), tax withheld during the year for each, and allowable deductions. The standard DIVA form also contains sections to declare the number of dependent children and education expenses (if eligible).<\/p>\n\n\n\n

After you have completed the information, the tax system (or the calculations within the form itself) will automatically calculate the final tax. At the end, a summary is displayed where you can see:<\/p>\n\n\n\n

(1) The total tax calculated on the basis of the declared income. <\/p>\n\n\n\n

(2) The tax already paid during the year (through withholding at source on salary, rent, etc.). <\/p>\n\n\n\n

(3) The final result, which may be an amount payable or a credit balance eligible for refund.<\/p>\n\n\n\n

If the result shows a tax payable, this amount must be paid by the legal deadline (31 March of the following year). If a refundable amount results, the taxpayer has the right to request the refund from the Tax Administration within three months. The refunded amount is generally transferred to the bank account declared by the taxpayer.<\/p>\n\n\n\n

Personal Status Declaration<\/h3>\n\n\n\n

As part of the new tax relief framework, the Tax Administration has introduced the Personal Status Declaration. This declaration provides the employer with information about the employee\u2019s personal circumstances (for example, whether the employee has dependent children or multiple employment), so that monthly salary tax can be calculated correctly throughout the year. By submitting this declaration to the employer, certain personal deductions may be applied on a monthly basis, reducing differences at year-end. However, deductions related to dependent children and education expenses are mainly applied through the annual return (DIVA).<\/p>\n\n\n\n

Read also The Payroll Agent and the Statement of Personal Status: What you need to know?<\/a><\/p>\n\n\n\n

Submission and confirmation of the return<\/h3>\n\n\n\n

After completing the DIVA return online, it is submitted electronically, and the system generates a submission confirmation. This confirmation should be saved (printed or stored electronically), as it serves as proof that the return was filed within the legal deadline.\n\nThe Tax Administration may subsequently verify the submitted return. If all information is correct, the return is considered finalized. If inaccuracies or inconsistencies are identified, the taxpayer may be notified to make corrections, or the authorities may correct the return in specific cases. In general, when the return is completed accurately, it is confirmed without issues.<\/p>\n\n\n\n

New rules applicable from 2024<\/h2>\n\n\n\n

The new Law No. 29\/2023<\/a> has introduced a number of changes to personal income taxation, which enter into force gradually. Below are the main points to be taken into account:<\/p>\n\n\n\n

Lower declaration threshold<\/strong><\/h3>\n\n\n\n

Individuals with annual income exceeding ALL 1.2 million are now required to file the DIVA return. The previous threshold of ALL 2 million has been reduced to ALL 1.2 million, meaning that more individuals will be required to file the annual return for the first time for income earned in 2024.<\/p>\n\n\n\n

New filing deadline<\/strong><\/h3>\n\n\n\n

The deadline for filing the DIVA return is 31 March (instead of 30 April under the previous rules). For income earned in 2024 and declared in 2025, the deadline is Monday, 31 March 2025.<\/p>\n\n\n\n

Declaration of previously untaxed income<\/strong><\/h3>\n\n\n\n

Income exceeding ALL 50,000 that was not taxed at source during the year (such as rental income paid by individuals, foreign income, or income earned through online platforms) must now be declared through DIVA and taxed accordingly.<\/p>\n\n\n\n

New salary tax rates (from 2025)<\/strong><\/p>\n\n\n\n

Until December 2024, salaries were taxed under a monthly progressive tax system. From January 2025, a new salary tax scheme enters into force:\n(a) 13% on annual income up to ALL 2,040,000;\n(b) 23% on the portion of income exceeding this threshold.\nThis simplifies tax calculation and aims to reduce large discrepancies at year-end when filing the annual return.<\/p>\n\n\n\n

Read also 2024 Annual Personal Income Tax Return: Obligation, Deadlines, and New Rules<\/a><\/p>\n\n\n\n

Monthly personal deductions based on salary level<\/strong><\/h3>\n\n\n\n

The new law introduces different personal deductions based on annual salary levels:\n(a) up to ALL 600,000 per year \u2013 deduction of ALL 600,000;\n(b) ALL 600,000 to ALL 720,000 \u2013 deduction of ALL 420,000;\n(c) above ALL 720,000 \u2013 deduction of ALL 360,000.\nWhen applied monthly, these correspond to deductions of ALL 50,000, ALL 35,000, or ALL 30,000 per month, respectively. These deductions are applied by the Payroll Agent (the employer) based on the employee\u2019s Personal Status Declaration.<\/p>\n\n\n\n

New deductions for children and education<\/strong><\/h3>\n\n\n\n

From income year 2025 onward, the new law allows individuals to benefit from tax deductions for dependent children and education expenses, as explained above. These measures aim to reduce the tax burden for families with children.<\/p>\n\n\n\n

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If you are an individual who meets the relevant criteria, make sure to take advantage of these new rules. Not only will you pay the correct amount of tax, but you may also achieve significant savings through the available deductions, provided that you declare accurately and submit the required documentation within the prescribed deadlines.<\/p>\n<\/blockquote>\n\n\n\n

Frequently Asked Questions (FAQ)<\/h2>\n\n\n\n
Who is required to complete the DIVA? If I have only one salary below 1.2 million lek, am I obligated?<\/strong>

DIVA must be filed by those whose total annual income exceeds 1.2 million lek, those with more than one employer, and those whose non-wage income during the year exceeds 50,000 lek. So, if you only had one job and your annual gross salary is \u2264 1.2 million lek, you are not legally required to file \u2013 but: If you have children and want to claim the tax refund for them, you have the right to file voluntarily to obtain that relief. The law doesn't prevent you from filing the DIVA even if your income is below the threshold, if you have a reason to do so (e.g., you're claiming the child and school deductions). In fact, the tax administration encourages anyone earning over 100,000 lek a month, or who has more than one source of income, to file in order to be in compliance and to benefit from deductions.<\/p> <\/div>

How can I benefit from the child deductions if my salary was taxed normally throughout the year?<\/strong><\/strong>

Simply by declaring it on the DIVA. The employer cannot know your family benefits during the year (unless you have completed the personal status declaration with him). On the annual declaration, you will indicate the number of children in your care and the amount of educational expenses. If you meet the legal requirements (child under 18, you are the higher-earning parent, etc.), the tax system will automatically calculate the deduction for each child (48,000 lek) and the expenses (up to 100,000 lek). This will reduce the taxable base on which your annual tax is calculated. As a result, it turns out that you have paid somewhat more tax during the year. The difference between the tax paid and the final tax is refunded to you. So, you don't need to take any special action during the year\u2014just don't forget to declare these deductions at the end.<\/p> <\/div>

What documents do I need to collect to justify the child deductions?<\/strong>

For the children themselves (48,000 lek\u00eb each), you don't need any financial documents \u2013 a family certificate proving they are your dependents is sufficient (the administration easily verifies this in the civil registry). For educational expenses (100,000 lek\u00eb), you must keep the invoices or payment receipts you've incurred: e.g., the private school invoice, payment receipts for extracurricular courses, invoices for books and teaching materials, etc. When you file the declaration, you won't upload those invoices, but you must keep them safe. The tax authorities have the right to request them for audit up to several years later. So, if you claim the deduction, make sure the expense is documented and lawful.<\/p> <\/div>

Can both parents get discounts for the same child?<\/strong>

No. For each child in care, the 48,000-lek deduction (and education expenses) is granted only once a year and only by one parent. Usually, the parent who has paid the most tax during the year (i.e., with higher income) declares and benefits, so that the effect of the deduction is maximized. The other parent simply files their DIVA without these deductions (or may not have any obligation to file at all, depending on their income). This is important: coordinate within the family so you don't declare the same child twice, as the system will reject it for duplication.<\/p> <\/div>

My child turned 18 in January of this year \u2013 do I get the discount for the months when they were 17?<\/strong>

Unfortunately, no. The law simply formulates the criterion as \u201cchild under 18 years old,\u201d implying that for the fiscal year being declared, the child must have been a minor throughout the entire year (until December 31). The guidance also does not provide partial monthly deductions; it is designed as a fixed annual amount. So as soon as the child turns 18 during that year, that year does not count toward the allowance. (If you have a student child over 18, there are currently no specific deductions for them under this law.)<\/p> <\/div>

I have only one employer and my gross salary is 800,000 lek\u00eb per year. I'm not required to file, but I have one child and school expenses. Is it worth filing?<\/strong>

Yes, without a doubt! Even though the law doesn't require it, if you've paid income tax on your salary during the year, you can get back part of that tax by filing your declaration and claiming deductions. In your case: with an annual salary of 800,000 lek (for 2025 and beyond), your pay had about 360,000 lek in personal exemption and the remaining 440,000 lek was taxed at 13.1%, meaning you paid around 57,200 lek in tax. If you declare one child and 100,000 lek in educational expenses, the taxable base falls significantly (i.e., 800k \u2013 360k \u2013 48k \u2013 100k = 292k) and the proper tax comes out to almost zero. You will be refunded the vast majority of those ~57,000 lek in taxes paid. Otherwise, if you don't file, you lose that money. So, even when it's not mandatory, filing voluntarily is in your financial interest in this case.<\/p> <\/div>

When will I receive the refund and how?<\/strong>

After submitting the declaration by March 31 (for example, by March 31, 2026, for 2025 income), if it turns out that you have overpaid taxes, you must file an official refund request with the Tax Directorate. It's a standard procedure (it can be done online through the e-Tatime portal). The tax authorities have up to 90 days to review the request. Usually, if everything is in order, they approve it and transfer the amount to the bank account you provided. The waiting time can be several weeks; the important thing is to follow the instructions (for example, they may ask for confirmation of your bank account's IBAN). If you have unpaid tax obligations from previous years, it may be that, instead of receiving the money at the bank, the net refund amount will be used to settle those obligations \u2013 but you would see this in communications from the tax authorities.<\/p> <\/div>

I made a mistake on my declaration (or I forgot to declare something). What can I do?<\/strong>

If it's still within the deadline (until March 31), you can reopen the return and correct it before the final submission. After the deadline, you still have one option: you can file a corrected (or supplemental) return after the deadline. This will fix the figures, but keep in mind it won't save you from the late\u2010filing penalty if you're past March 31. However, it's better to correct mistakes than to leave them, because an inaccurate declaration can cause trouble later (e.g., during an audit). To make corrections, you can use the online portal again \u2013 DIVA allows a \u201crevised declaration\u201d version. In complex cases, you can contact the tax office for clarification.<\/p> <\/div>

Does this scheme mean that anyone with children will get money back?<\/strong>

No, that's not necessarily the case. Many individuals will simply pay less tax during the year (or at the time of filing) thanks to deductions, but they won't necessarily have money coming back. A refund occurs when the tax paid during the year exceeds the final tax calculated. Some may end up at zero (neither owing nor getting anything). Some who had little tax withheld during the year and also have other obligations may still end up owing money despite the deductions (just a much smaller amount). The scheme is primarily aimed at helping families pay less tax overall, and in some cases these excess funds are actually returned to the families. According to projections, middle-income families will be the main beneficiaries of refunds, while very high-income families will simply pay slightly less tax but will not receive refunds, since throughout the year their tax is withheld under the new, already reduced formula.<\/p> <\/div>

What happens if I don't file the declaration at all?<\/strong>

\nWhat happens if I do not submit the return at all?\n<\/strong>\n

\nAs mentioned, failure to submit the return results in an administrative fine of ALL 3,000. In addition, the tax authorities may perform a tax assessment based on the information available to them and determine the tax liability that you should have paid. If this liability is not settled, it will increase with interest for each day of delay until it is paid. Furthermore, failure to submit the return may be considered a red flag in the system\u2014in the future, when applying for a loan or for employment abroad, proof of tax compliance is often required, and an unfiled return may create complications. For this reason, it is in your interest to submit the return even if the deadline has passed\u2014better late than never. Tax compliance awareness is increasing, and these new rules are specifically aimed at formalization, so it is advisable to avoid unpleasant situations by adhering to the deadlines.\n<\/p><\/p> <\/div> <\/div>\n\n\n\n

In conclusion, the Annual Individual Income Tax Return (DIVA) is both a legal obligation and an opportunity for individual taxpayers. With the new rules in force\u2014particularly those affecting families with children it is important to ensure accurate and timely filing, as this may result in tangible financial benefits. If you are uncertain about any aspect of the process, seeking professional advice is advisable; however, the filing itself should not be neglected. By remaining informed and proactive, you ensure that you pay only the tax legally due and, where applicable, obtain refunds for essential living expenses such as the upbringing and education of children.<\/p>\n\n\n

DIVA Consulting & Tax Benefits \u2013 FREE<\/h3>
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