A new law on Income Tax was recently approved in Albania aiming to reduce fiscal burden for all employees and provide a fairer and universally accepted tax system.
As of 01 June 2023, and until 31 December 2023 non-taxable income will be increased for individuals from 40 thousand ALL, which is today, to 50 thousand ALL. We need to emphasize the fact that the non-taxable income had previously seen another increase from 32 thousand ALL, to 40 thousand ALL, in April 2023. The target of the government is to make low wages non-taxable and reduce the fiscal burden.
The law will bring changes starting from 01 January 2024 creating a modern self-declarative tax system where the individual and the entity pay their fair share of the income tax and seek the return of this contribution in the form of benefits and improved public services, increase the contribution to the budget of individuals and entities through income tax, balancing the weight of indirect taxes and create a fairer and more universally accepted tax system.
The fiscal burden is eased for all taxpayers with employment income range of 50-60 thousand ALL, to whom a tax deduction of 35 thousand ALL per month is now recognized from 30 thousand ALL that was the taxable income at 0%.
Moreover, another interesting change the new law introduces is the deduction of 48 thousand ALL from the employee's tax base for each dependent child under 18 years old. Also, personal income taxpayers with annual taxable income from employment and/or annual taxable income from the business less than 1,200,000 ALL can deduct, except individual amounts, current expenses for the education of his dependent children, in the maximum value of 100,000 ALL.
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.
