Bahas Gramatidis & Partners
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The present article aims at a brief examination of the current tax regime in Albania in the hope that it will assist companies planning to make investments in Albania.
Companies active in Albania must pay a 30% tax on their profits. However, for the first four years following their establishment, such companies are not obliged to pay tax, provided that their activity relates to production and will continue for a period exceeding ten years.
2. IMPORT DUTIES
Imported goods are subject to import duties, whose rate is determined on the basis of purchase price, transportation cost and insurance cost. Machinery and like materials imported for the investment in question are exempt from the import duties under the following conditions:
a) the investment must fall within the ambit of the company object
b) the machinery must be part of the capital imported in order to be used during the technological process of the investment
c) the investment must be related to:
- industrial processing of raw materials
- services pertaining to telecommunications, banks. refuelling of transportation means
- transport and communications concerning reconstruction, modernisation and expansion of airports
The materials and machinery must not be reexported for ten years.
3. SALES TAX
Income deriving from sales is taxed at a rate of 15% on the sale price and is paid once. The following categories are exempt:
a) Raw materials imported by the same company for processing during the production process.
b) Machinery for (re)constructions which will be used in the process of construction and rendering of services.
c) Exported goods, except electricity and ores, which are determined by the Minister of Industry.
d) Literary books, periodicals, domestic (video) tapes.
e) Goods that are exempt from import duties.
All imported goods are taxed by a 5% rate on the declared customs value. Goods not subject to import duties are exempt.
5. SALES TAX
Some goods imported or produced in Albania are subject to a sales tax (tobacco, liquors, petrol, electricity, fuels).
6. INCOME TAX
Every natural and legal person domiciled or having a registered office in Albania are required to pay income tax depending on the income acquired. Salaries not exceeding 4000 lecs or cases of inheritance or donation are exempt from income tax.
7. SOCIAL INSURANCE
Employees pay an insurance contribution equal to 3%, whereas employers of 32,5% on the salary respectively.
Athanassios Vamvoukos, Bahas, Gramatidis & Associates, Athens, Greece
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.
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