Albania has a simple and straightforward tax system that is easy to navigate. The main taxes applicable to businesses are CIT and VAT, and the rates are relatively low compared to other European countries. The import duty rates are also reasonable, and there are no export duties. The laws governing each tax are regularly updated to ensure they are in line with the country's economic and political goals.
Income Tax:
The Albanian Corporate Income Tax (CIT) rate is a flat rate of 15%, which is applicable to both resident and non-resident companies. The tax is payable on the company's taxable profit, which is calculated by subtracting the deductible expenses from the total revenue. The law governing CIT is Law No. 8438, dated December 28, 1998, and its subsequent amendments.
Value-Added Tax (VAT):
VAT is a tax on the value-added in the production and sale of goods and services. The standard VAT rate in Albania is 20%, and the reduced VAT rate is 10%. VAT is applicable to all businesses in Albania, regardless of their size, nature, or activity. The law governing VAT is Law No. 7928, dated April 27, 1995, and its subsequent amendments.
Sales Tax:
Albania does not have a separate sales tax. The VAT is the only indirect tax applicable to the sale of goods and services.
Import Duties:
Albania is a member of the World Trade Organization (WTO) and has adopted the WTO's rules on customs and import duties. The import duty rates vary depending on the type of goods imported, and they range from 0% to 15%. The average import duty rate is around 5%. The law governing import duties is Law No. 9920, dated July 19, 2008.
Export Duties:
Albania does not levy any export duties.
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