Introduction
Starting January 1, 2025, Albania introduces significant updates to the Annual Personal Income Declaration process. These changes aim to enhance transparency and compliance, bringing more individuals into the reporting framework. Understanding the new requirements is essential to avoid penalties and ensure proper filing.
Key Updates for 2025
The new rules include a reduced income threshold and a fixed reporting deadline. Individuals with an annual gross income exceeding 1.2 million lek must submit their declarations by March 31, 2025. Additionally, the penalty for late submissions is set at 3,000 lek.
For the fiscal year being reported in 2026, new deductions apply, including a 48,000 lek annual compensation per child under 18 and a deduction of up to 100,000 lek for documented education expenses for children under 18. This deduction is only available to families with an annual income below 1.2 million lek.
Filing Requirements and Taxable Income
The legislation expands reporting requirements to individuals with unreported income above 50,000 lek, double-employed individuals, and those earning from multiple sources, such as employment, rentals, dividends, investments, or overseas income.
The online system provides a preliminary statement based on reported and taxed income. If taxes have not been fully withheld, individuals are responsible for calculating and paying the outstanding amount.
Eurofast's Take
The updated income declaration framework introduces challenges for individuals unfamiliar with tax reporting. The lowered income threshold and stricter requirements underline the need for expert guidance to avoid errors and ensure compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
