Albania cross-border tax: residence, non-residents, withholding, treaties and leaving (2026)

Source-cited draft. Drafted from the consolidated texts of Law No. 29/2023, Law No. 9920/2008 and General Instruction No. 26/2023 published by the General Directorate of Taxes, and the General Directorate's treaty list, all read on 2026-10-23. No accountant has reviewed it. Do not file from it without review by a qualified Albanian professional.

This skill is the hub for cross-border questions in the Albania pack. It says who Albania taxes and on what, what a payer must withhold when money leaves Albania, how a treaty rate is applied, how a resident claims credit for foreign tax, and what happens on departure. For the rates and returns themselves, see albania-income-tax (individuals) and al-corporate-tax (companies and permanent establishments).

Tax year: the calendar year (Law 29/2023 art. 6). Currency: Albanian lek (ALL). Authority: Drejtoria e Përgjithshme e Tatimeve (General Directorate of Taxes), tatime.gov.al. Albania is not an EU member, so the EU Parent-Subsidiary and Interest-Royalties Directives do not apply.

Who this applies to

Scope of the law. Residents are taxed on income from all sources, in Albania or abroad (art. 2(1)). Non-residents are taxed on worldwide income attributable to an Albanian permanent establishment, and on any other income with a source in Albania under art. 4 (art. 2(2)).

Resident individuals (art. 8). An individual is resident for a tax year if any one of these is met:

• (a) a permanent home (vendbanim i qëndrueshëm) in Albania during the year;
• (b) presence in Albania for 183 days or more in the year, in one or more periods; the day of leaving and the day of arriving each count as a day of presence;
• (c) an Albanian citizen working abroad as an employee or official of the Albanian government;
• (ç) a shop, professional office, factory or other place of activity in Albania, or habitual residence in Albania, unless the person has a permanent home abroad for the whole year and none in Albania;
• (d) the centre of vital interests in Albania, meaning significant personal or economic ties.

From Law 81/2025, art. 8(dh) adds an exception: artists who are not Albanian citizens are not resident for 24 months from the date they first enter Albania, whatever their days of presence.

Resident entities (art. 28). An entity is resident if it was established in Albania, or if at any time in the year its management and control is exercised in Albania. Management and control is in Albania if board meetings are held there, or if at least two of these are met: day-to-day management decisions are taken in Albania; at least 50% of board members or managers are Albanian residents; at least 50% of the capital or voting rights are held, directly or indirectly, by Albanian residents (art. 28(2)). An Albanian-owned foreign company with Albanian managers is therefore resident.

Non-residents are everyone else. The General Directorate describes a non-resident individual as one with no permanent home in Albania, fewer than 183 days there, no centre of life or economic interests there, no business or office there, and who lives and works abroad without being an Albanian state official (tatime.gov.al, Jo Rezident).

Rates, bands and thresholds

Item	Rate or amount	Year	Source
Residence by presence (individuals)	183 days or more in the tax year	2026	Law 29/2023 art. 8(b), consolidated text
Non-citizen artists	Not resident for 24 months from first entry	2026	Law 29/2023 art. 8(dh), added by Law 81/2025
Withholding on dividends paid to non-residents	8%, final	2026	Law 29/2023 arts. 58(2)(a), 59
Withholding on interest and royalties paid to non-residents	15%, final	2026	Law 29/2023 arts. 58(2)(a), 59
Withholding on services, insurance, directors' fees, construction and installation, performers and sportspeople, paid to non-residents without an Albanian PE	15%, final; services received physically outside Albania are excluded	2026	Law 29/2023 arts. 58(2)(c) to (e), 59
Gambling winnings, inheritances and gifts of Albanian assets received by non-residents	15%, no costs deducted	2026	Law 29/2023 art. 60(1)(b), (9)
Non-resident individual, Albanian employment income	13% to ALL 2,040,000 a year, 23% above	2026	Law 29/2023 art. 24(1)
Non-resident individual, Albanian investment income not withheld	8% dividends, 15% other	2026	Law 29/2023 art. 24(3)
Non-resident entity with an Albanian PE	15% corporate income tax on PE profit	2026	Law 29/2023 arts. 2(2)(a), 41
PE: building, construction or installation site; services through employees	More than 6 months in any 12-month period	2026	Law 29/2023 art. 5(2)(e), (f)
PE: exploration or exploitation of natural resources	More than 3 months in any 12-month period	2026	Law 29/2023 art. 5(2)(ë)
Real estate rich company: share disposal is Albanian-source	More than 50% of value from Albanian immovable property at any time in the 365 days before the disposal	2026	Law 29/2023 art. 4(e)(ii)
Treaties in force	45 bilateral treaties, plus the multilateral BEPS convention	2026	tatime.gov.al treaty list
Example treaty caps: Italy	Dividends 10%, interest 5%, royalties 5% (in effect from 1 Jan 2000)	2026	Albania-Italy convention arts. 10(2), 11(2), 12(2)
Treaty documentation filing deadline	By the end of the calendar year after the year the treaty was applied	2026	Law 9920/2008 art. 115/3(1), consolidated text
Foreign tax credit limit	Albanian tax on the same income, country by country; individuals also by category	2026	Law 29/2023 arts. 25, 42
Exit tax base (business assets)	Market value less tax value at exit, at the normal rate	2026	Law 29/2023 arts. 13(2), 47(2); Instruction 26/2023 para. 47.1

Treaties in force (tatime.gov.al list, read 2026-10-23): Austria, Belgium, Bosnia and Herzegovina, Bulgaria, China, Croatia, Czech Republic, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Ireland, Israel, Italy, Kosovo, Kuwait, Latvia, Luxembourg, Malaysia, Malta, Moldova, Netherlands, North Macedonia, Norway, Poland, Qatar, Romania, Russia, Saudi Arabia, Serbia and Montenegro, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, United Kingdom. The list gives an effective date for each except India. Read the treaty text itself for the rate; this skill does not tabulate treaty rates beyond the Italy example.

The taxable base

Albanian-source income (art. 4) includes, without limit: employment income and fees for services performed in Albania; cultural, artistic and sporting activity in Albania; income payable by a resident employer even when the work is done abroad; business income for activity or services supplied in Albania; income attributable to an Albanian PE; income from immovable property, mineral and hydrocarbon rights in Albania; gains on such property and on shares deriving more than 50% of their value from it; dividends from resident persons; gains on shares of resident entities and on Albanian securities; interest paid by Albanian government bodies, residents or PEs; rents, licence fees, technical and automated digital service fees and royalties paid by residents or PEs; and any other activity carried out physically in Albania.

Permanent establishment (art. 5). A fixed place of business through which a non-resident's business is wholly or partly carried on: a place of management, branch, office, factory, workshop, mine or quarry. Sites and service activity count only above the time limits in the table. Preparatory or auxiliary activity is not a PE (art. 5(3)), but that exception is lost where the non-resident or a closely related person (50% or more) runs complementary activities in Albania that together are not preparatory or auxiliary (art. 5(4)). A dependent agent who habitually concludes contracts, or plays the principal role in concluding them, creates a PE; an independent agent does not, unless it acts exclusively for closely related persons (art. 5(5), (7)). A foreign insurer collecting premiums or insuring risks in Albania through another person has a PE, reinsurance aside (art. 5(6)). Owning or being owned by an Albanian company is not by itself a PE (art. 5(8)).

Withholding as final tax (arts. 58, 59). A resident payer or Albanian PE paying a non-resident individual, or a non-resident entity without an Albanian PE, withholds 8% on dividends and 15% on the other items in art. 58(2). That withholding is the final Albanian tax. No withholding applies to persons exempt from income tax, to dividends meeting the art. 29 participation conditions, to capital gains and interest on Albanian government eurobonds paid to non-resident entities without a PE, or to interest paid to banks and financial institutions (art. 58(3)). Interest and gains on Albanian government eurobonds received by non-resident individuals are exempt investment income (art. 15(2)(c)).

Treaty override. General Instruction No. 26/2023 para. 58.7 says that where the recipient is resident in a country with a treaty in force, the treaty's allocation of taxing rights applies to dividends, interest, royalties, PE services and construction work; with no treaty, domestic law applies and Albanian tax is withheld. Insurance services, gambling winnings and payments to performers and sportspeople are withheld in Albania regardless (para. 58.7(b), (d), (g)). Board fees are Albanian-source wherever the meeting is held (para. 58.7(e)). A treaty can only reduce Albanian tax: where the treaty cap is above the domestic rate (for example Italy's 10% on dividends against the domestic 8%), the domestic rate applies.

Royalties versus services. For payments for software and similar items, the Instruction tells taxpayers to separate licence payments (royalties, withheld) from ordinary service or purchase invoices (not withheld unless art. 58(2)(c) applies), and to follow the treaty and the OECD and UN commentaries where a treaty exists (para. 3.5).

Foreign tax credit for residents (arts. 25, 42). A resident individual or entity deducts foreign tax paid on foreign-source income from the Albanian tax on that income. The credit cannot exceed the Albanian tax that would have been due had the income arisen in Albania; it is computed separately for each country. Individuals also compute it separately for the annual tax base (employment and business) and for investment income (art. 25(4)). The foreign tax must be evidenced by a document issued by the foreign country, under the Minister of Finance's instruction (art. 25(1), 42(1)). The General Directorate asks for an official certificate from the foreign tax authority showing the income, the tax paid, and the date and place of payment. There is no carry-forward of unused credit in the law.

CFC rule for individuals (art. 19). An Albanian resident individual who, with related persons, controls more than 50% of a foreign entity taxed at less than 50% of the Albanian tax must include its undistributed passive profits (interest, royalties, dividends, gains on securities, finance lease income) in investment income, unless passive income is 30% or less of the entity's profit. Foreign tax paid by the entity is creditable under art. 25.

Indirect transfers. An Albanian entity must notify the tax authority within 45 days of a direct or indirect ownership change of 10% or more where the shares derive more than 50% of their value from Albanian immovable property (art. 55(5)). The gain is taxable in Albania as Albanian-source income (art. 4(e)(ii)) unless a treaty allocates it elsewhere (art. 55(7)).

Deadlines and filing

Obligation	When	Source
Withholding tax return and payment	By the 20th of the month after the payment or withholding	Law 29/2023 art. 56(4)
Withholding on declared but unpaid dividends	End of the third month after the month of the distribution decision; profit allocation decision filed by 31 July	Law 29/2023 art. 56(2)
Treaty application documentation	By 31 December of the year after the year the treaty rate was applied (by 31 December 2027 for payments in 2026)	Law 9920/2008 art. 115/3(1)
Residence certificate of the recipient	Requested and kept by the payer whenever a rate other than the standard domestic rate is applied	General Instruction 26/2023 para. 56.1(e)
Annual return of a non-resident entity (PE, or Albanian income not finally withheld)	By 31 March of the following year; tax paid on filing; no advance instalments	Law 29/2023 arts. 61(2), 68
Annual personal income tax return	By 31 March of the following year, if income over ALL 1,200,000, more than one employer, or over ALL 50,000 of income not finally withheld	Law 29/2023 arts. 61(2), 67(1)
Return on change of residence	Must cover all income up to the date residence changes	Law 29/2023 art. 61(4); Instruction 26/2023 para. 61.5
Notification of indirect ownership change (real estate rich entity)	Within 45 days	Law 29/2023 art. 55(5)
Registration of a tax representative	Within 5 days of appointment and before the non-resident's obligation starts	tatime.gov.al: Përfaqësuesi tatimor

Tax representative (Law 9920/2008 art. 9). A non-resident appoints a resident tax representative and registers with the regional tax directorate when the legislation requires it. No representative is needed if all the non-resident's Albanian income is subject to final withholding, or if the non-resident files its own return. The representative must register for VAT and, where relevant, for withholding tax, social and health contributions. Registration needs the appointment decision or power of attorney, the representation agreement, and a tax registration certificate from the country of residence issued no more than three months earlier.

Non-resident tax number. Non-residents receive a tax identification number under the Minister of Finance's instruction (art. 67(3)).

How treaty relief is claimed in practice. Instruction para. 2.3 says treaties remove double tax either by exempting or reducing the Albanian withholding or by credit. At source, the payer applies the treaty rate, keeps the recipient's residence certificate (para. 56.1(e)) and files the treaty documentation by the art. 115/3 deadline. Where tax was withheld at the domestic rate, a treaty may provide for a refund on request: the Italy treaty does, with an official residence certificate from Italy, within the time Albanian law allows (art. 29(1), (2)). The form for the treaty documentation is set by the Minister's instruction; see "Not yet confirmed".

Penalties and interest

All under Law No. 9920/2008, consolidated to Law No. 79/2025.

Failure	Penalty	Source
Treaty documentation not filed on time	ALL 10,000 per month late, for up to 24 months	Law 9920/2008 art. 115/3(2)
Treaty documentation still not filed after 24 months	Treaty benefit lost: the tax reduced under the treaty becomes payable with penalties and late interest	Law 9920/2008 art. 115/3(3)
Withholding agent withheld and declared but did not transfer	0.06% of the tax per day, for at most 365 days	Law 9920/2008 art. 117(a)
Withholding agent did not withhold	50% of the tax	Law 9920/2008 art. 117(b)
Withholding agent withheld but did not declare and pay	100% of the tax	Law 9920/2008 art. 117(c)
Late return	ALL 10,000 (corporate income taxpayers), ALL 5,000 (other non-individuals), ALL 3,000 (individuals), per return	Law 9920/2008 art. 113
Late payment	0.06% of the unpaid tax per day, for at most 365 days	Law 9920/2008 art. 114(1)
Late payment interest	120% of the Bank of Albania interbank rate, set quarterly from the previous quarter's average; cannot be waived	Law 9920/2008 art. 76(1), (3), (4)

A withholding agent is liable for the tax it should have withheld as if it were its own debt (Law 29/2023 art. 56(3)).

Cross-border points

• Arriving. Residence follows the art. 8 tests for the tax year. The law states the part-year rule only for a change of residence (art. 61(4)); it gives no separate arrival date rule. A resident individual reports worldwide income. Foreign artists who are not Albanian citizens have 24 months of non-residence from first entry.
• Leaving: individuals. A taxpayer who changes tax residence files a return for all income up to the date of the change (art. 61(4)). The Instruction's example: a resident who leaves on 31 July 2024 declares income for January to July 2024 (para. 61.5). The law has no exit tax on an individual's private shares or other private assets. After leaving, Albanian-source income stays taxable: dividends and interest are withheld at 8% and 15% (art. 58(2)), rent from Albanian immovable property stays Albanian-source (art. 4(dh)), gains on Albanian immovable property are paid by the seller before the transfer is registered (art. 17(7)), and gains on shares of Albanian companies remain Albanian-source (art. 4(f)).
• Leaving: business assets (art. 47). A resident taxpayer that moves business assets from its Albanian head office to a foreign PE, where Albania loses the right to tax them, or that moves its tax residence abroad, is taxed on market value less tax value of the assets at exit. Assets that remain effectively connected with an Albanian PE are excluded. Assets moving into Albania take market value as their opening tax value (art. 47(3)). The law has no deferral or instalment option. Art. 47 sits in Chapter IV of the law, which art. 13(2) applies to the business income of individual traders and the self-employed, so it reaches their business assets as well as entities'. For a company, the Instruction taxes the gain at the normal 15% rate (para. 47.1).
• Employees sent abroad. A resident employer keeps withholding payroll tax on an employee working abroad (income is Albanian-source under art. 4(c)); if a treaty gives the taxing right only to the other country, the employer shows the pay on the payroll but computes no tax (Instruction para. 4.9).
• Foreign employer, work in Albania. A resident employee paid by a non-resident employer for work in Albania declares the income and pays the tax himself, subject to any treaty (Instruction para. 4.8).
• Self-employed with foreign clients only. The rule that reclassifies a self-employed person's income as employment income (80% from one client, or 90% from fewer than three) does not apply if the person supplies services only to non-residents or to entities without an Albanian PE (art. 12(1)(ç)).
• Transfer pricing. Transactions with related non-residents follow the arm's length rules in arts. 32 to 39 and 44, summarised in al-corporate-tax.

Worked examples

Example 1: royalty and portfolio dividend paid to an Italian company

Drini SHPK, an Albanian resident company, pays in 2026 a royalty of ALL 2,000,000 for a trademark licence to Lombardo Srl, an Italian resident company that is the beneficial owner. It also pays Lombardo a dividend of ALL 1,000,000 on a 5% shareholding, so the art. 29 participation conditions (10%, 24 months) are not met.

Royalty: domestic withholding is 15%, ALL 300,000. The Albania-Italy convention caps tax on royalties at 5% of the gross (art. 12(2)), so with Lombardo's Italian residence certificate on file Drini withholds ALL 100,000, a saving of ALL 200,000. Dividend: domestic withholding is 8%, ALL 80,000. The treaty cap is 10% (art. 10(2)), which is higher than the domestic rate, so 8% applies. Drini pays ALL 180,000 by 20 of the month after payment. It must file the treaty documentation by 31 December 2027. If it files four months late, the penalty is ALL 40,000 (Law 9920/2008 art. 115/3(2)).

name: Albanian payer, royalty and 5% dividend to Italian company, 2026
inputs:
  royalty: 2000000
  dividend: 1000000
  months_late: 4
steps:
  - royalty_wht_domestic: royalty * 0.15
  - royalty_wht_treaty: royalty * 0.05
  - royalty_saving: royalty_wht_domestic - royalty_wht_treaty
  - dividend_rate: min(0.08, 0.10)
  - dividend_wht: dividend * dividend_rate
  - total_wht: royalty_wht_treaty + dividend_wht
  - late_doc_penalty: 10000 * min(months_late, 24)
expected:
  royalty_wht_domestic: 300000
  royalty_wht_treaty: 100000
  royalty_saving: 200000
  dividend_wht: 80000
  total_wht: 180000
  late_doc_penalty: 40000

Example 2: resident individual with foreign interest and dividends from two countries

Elira is Albanian resident (permanent home in Tirana). In 2026 she receives ALL 1,000,000 of bank interest from Country A, which withheld 20% (ALL 200,000), and ALL 500,000 of dividends from Country B, which withheld 5% (ALL 25,000). Both are investment income taxed at 15% (interest) and 8% (dividends) under art. 24(3), and neither was subject to Albanian final withholding, so she files an annual return (art. 67(1)(c)).

The credit is computed country by country (art. 25(3)). Country A: Albanian tax on the interest is ALL 150,000; the credit is capped at that, so ALL 50,000 of Country A tax goes unrelieved and nothing is due in Albania. Country B: Albanian tax is ALL 40,000; the full ALL 25,000 is credited, leaving ALL 15,000 to pay. The Country A excess cannot be used against the Country B income. She needs certificates from both foreign tax authorities.

name: Albanian resident, foreign interest and dividends, per-country credit, 2026
inputs:
  interest_a: 1000000
  foreign_tax_a: 200000
  dividend_b: 500000
  foreign_tax_b: 25000
steps:
  - al_tax_a: interest_a * 0.15
  - credit_a: min(foreign_tax_a, al_tax_a)
  - due_a: al_tax_a - credit_a
  - unrelieved_a: foreign_tax_a - credit_a
  - al_tax_b: dividend_b * 0.08
  - credit_b: min(foreign_tax_b, al_tax_b)
  - due_b: al_tax_b - credit_b
  - total_due: due_a + due_b
expected:
  al_tax_a: 150000
  credit_a: 150000
  due_a: 0
  unrelieved_a: 50000
  al_tax_b: 40000
  credit_b: 25000
  due_b: 15000
  total_due: 15000

Ask the client first

1. Where the person lives and for how long. Permanent home, days in Albania, centre of vital interests, citizenship and any Albanian government role decide residence under art. 8. For a company: where the board meets, where daily decisions are made, and who owns and runs it (art. 28).
2. The recipient's country and residence certificate. Without a treaty in force and a residence certificate on file, the payer withholds at 8% or 15%.
3. What the payment is for. Royalty, service performed in Albania, service received physically abroad, or a dividend on a holding of 10% or more for 24 months: each has a different withholding result.
4. How long people or sites are in Albania. Construction or service activity over six months in any 12 months, or a dependent agent concluding contracts, creates a PE.
5. Foreign tax paid and its evidence. Amount, country, category of income, and whether an official foreign certificate is available.
6. Date of leaving and what stays in Albania. Business assets moving abroad trigger art. 47; property, shares and Albanian income after departure stay taxable.

Sources

Source	URL	Read on
Law No. 29/2023 "Për tatimin mbi të ardhurat", consolidated to Law No. 81/2025 (General Directorate of Taxes copy), arts. 2, 4, 5, 8, 12, 13, 15, 17, 19, 24, 25, 28, 29, 41, 42, 47, 55, 56, 58, 59, 60, 61, 67, 68	https://tatime.gov.al/wp-content/uploads/2026/09/Ligj-Nr.-29-2023-Per-Tatimin-mbi-te-Ardhurat-i-ndryshuar.pdf	2026-10-23
Law No. 9920/2008 "Për procedurat tatimore", consolidated to Law No. 79/2025, arts. 9, 76, 113, 114, 115/3, 117	https://tatime.gov.al/wp-content/uploads/2026/10/Ligj-Nr-9920-Dt-2008.05.19-perditesuar-1.pdf	2026-10-23
General Instruction No. 26 of 8.9.2023 on income tax, paras. 2.3, 3.5, 4.8, 4.9, 47.1, 56.1, 58.7, 61.5	https://tatime.gov.al/wp-content/uploads/2026/09/Udhezimi-nr-26-date-8.9.2023-Per-tatimin-mbi-te-ardhuart.pdf	2026-10-23
General Directorate of Taxes, double tax treaties in force	https://tatime.gov.al/legjislacioni/marreveshje-nderkombetare/	2026-10-23
Albania-Italy convention for the avoidance of double taxation, arts. 10, 11, 12, 29	https://tatime.gov.al/wp-content/uploads/2026/01/Itali.pdf	2026-10-23
General Directorate of Taxes, non-resident individual	https://tatime.gov.al/individ/?artikull=jo-rezident	2026-10-23
General Directorate of Taxes, foreign tax credit	https://tatime.gov.al/individ/?artikull=kreditimi-i-tatimit	2026-10-23
General Directorate of Taxes, tax representative	https://tatime.gov.al/entitete/?artikull=perfaqesuesi-tatimor	2026-10-23

Not yet confirmed: the content and form of the treaty application documentation under the Minister's instruction (the "Annex 2" treaty form linked from tatime.gov.al returned an error page on 2026-10-23); whether a treaty rate may be applied at source without prior approval in every case, or only through the refund route for some treaties; whether art. 29(2) lets a non-resident parent receive dividends from an Albanian subsidiary free of withholding when it holds 10% for 24 months; how tax on a non-resident's gain from shares in an Albanian company, and on Albanian rent received by a non-resident individual, is collected (neither is in the art. 58(2) withholding list); the filing deadline for the part-year return on change of residence (art. 61(4) states no date); the rate on an individual trader's art. 47 gain (the Instruction's 15% example is a company); the treaty in force status and effective date for India (blank on the treaty list); the current quarter's late payment interest rate under Law 9920/2008 art. 76(3); treaty rates for treaties other than Italy.

Contributed by Ryan Duguid.