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Recent Amendments to the Tax Legislation

25 April 2013

On 28 March 2013, following the proposal of the Council of Ministers, the Albanian Parliament approved Law No. 107/2013 on Certain Amendments to Law No. 8438 dated 28 December 1998 on Income Tax and Law No. 106/2013 on Certain Amendments to Law No. 9632 dated 30 October 2006 on Local Taxes. The main amendments consist of the following:

Amendments to the Law on Income Tax

Personal income tax

Law No.107/2013 provides for new personal income tax rates applicable to the taxable income derived from employment. Based on this, if the monthly taxable income including wages, salaries and compensations related to employment is less than ALL 30,000, then such income is exempt from personal income tax rate. For the monthly income higher than ALL 30,000, the full amount will be subject to the personal income tax rate of 10%. The new taxation of the taxable income is presented in the below table:

Taxable income Personal Income Tax Rate
From (in ALL) To (in ALL)  
0 30,000 Non taxable
30,001+ More 10% of the amount over ALL 0

Previously, the monthly income deriving from employment up to ALL 10,000 was exempt from personal income tax; the resulting difference for income between ALL 10,000 to 30,000 was taxable at a 10% rate; and for income exceeding ALL 30,000 the full amount was taxable at 10% rate.

Non deductible expenses

Based on Law No. 107/2013, expenses for technical services, consultancy and management services for which no withholding tax is paid by the taxpayer within the tax period shall be considered non deductible expenses. According to the previous provisions, these expenses were considered non deductible for tax purposes if the entire amount of the expenses was not paid by the taxpayer within the tax period (calendar year).

Amendments to the Law on Local Taxes

Tax on buildings

Based on Law No. 106/2013, any state-owned properties transferred under the administration of public governmental companies based on a decision of the Council of Ministers shall be considered exempt from tax on buildings.

Temporary local fees

Based on Law No. 106/2013, a mobile company’s antennas and any other transmission antennas, installed in accordance with the Albanian legislation in force will not be subject to temporary local taxes or fees applied according to this Law.

Entry into force

Law No. 106/2013 and Law No. 107/2013 were published on 15 April 2013 in the Official Gazette No. 53 and enter into force 15 days after their publication in the Official Gazette.

 

For Information

Arkadiusz Mierzejewski
Partner, Tax
Tel: +355 (4) 2274 524
Fax: +355 (4) 2235 534
arekmierzejewski@kpmg.com

Alba Paparisto
Senior Manager, Tax
Tel: +355 (4) 2274 524
Fax: +355 (4) 2235 534
apaparisto@kpmg.com

In this issue

Amendments to the Law on Income Tax

Amendments to the Law on Local Taxes

Entry into force

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