WORLD TRADE  
ORGANIZATION  S/C/N/448 
5 June 2008 
 (08-2649) 
Council for Trade in Services Original:   English 
  
 
NOTIFICATION PURSUANT TO ARTICLE III:3 OF THE 
GENERAL AGREEMENT ON TRADE IN SERVICES 
  
 The following notification, dated 3 June 200 8, from the delegation of the Republic of 
Albania, is being circulated to the Members of the Council for Trade in Services.  
  
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  1. Member notifying: 
 Republic of Albania 
  
2. Notification under: 
 Article III, paragraph 3, of the General Agreement on Trade in Services 
 
3. Date of entry into force:  
Law No. 8438, dated 28 December 1998 "On income Tax"  
 Duration: 
  Indefinite 
 
4. Agency responsible for enfo rcement of the measure: 
 Ministry of Finance, Directorate General of Taxation 
 5. Description of the measure: 
This sub legal governs the relations created in th e area of personal income tax, profit tax and 
the tax withheld at source of incomes. 
 
 Tax Rate  
 The Legal and physic persons in the Republic of Albania are subject to the following taxes: 
 
Type of Tax Tax Rate 
Profit Tax 10% 
Personal Income Tax 10% (see below) 
Source Tax 10% 
 S/C/N/448 
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 Profit Tax 
 
All companies (foreign or not) which are regist ered in the trade register and pay VAT are 
subject to the profit tax. 
 
The Resident taxpayers are subject to taxati on only for incomes generated (produced) in the 
territory of the Republic of Albania.  
 A legal person is considered resident in Albania if: 
 
 (a) he has a permanent residence (centr al offices) in the Republic of Albania 
 (b) he has an efficient centre of busin ess management in the Republic of Albania 
  The tax rate for profit tax is 10%.  
 
The taxable profit for the tax period is define d based on the balance-sheet and its annexes 
which should be in conformity with the law no.7661, date 19 Janua ry 1993 “On accounting”, 
with the provisions of this law, as well as with  the sub-legal acts  issued by the Ministry of 
Finance to that end. 
 
In order to settle the taxable profit in the Republic of Albania, the expenses carried out to 
profit-seeking, profit-security and profit-keepi ng, in case when these expenses are certified 
and documented by the taxpayer, as well as when they are subject to restrictions specified by this law are considered as expenses.  
The basic document used to jus tify the expenses for tax effect is: VAT tax invoice, the simple 
tax invoice and any other document compiled and i ssued in conformity with the instructions 
of the Minister of Finance, in application of the tax legislation. 
 
 Source Tax 
 
All the residents in the Republic of Albania, central and local government, non-profit 
organizations and any other entity, recognized by the legislation into force, are constrained to 
withhold the tax at source at 10% from the gross amount of the following payments, generated by a source in the Republic of Albania: 
 
Interests 10% 
Share of profit 10% 
Fee for technical, management and financial services, etc.  10% 
Fee for Rent 10% 
Dividend 10% 
Payment for author’s and intellectual property right 10% 
 
 Taxable Base  
The taxable revenues are fixed based on the bala nce-sheet and its annexes which should be in 
accordance with the law no. 7661, date 19 Ja nuary 1993 “On accounting”, with the provisions 
of this law, as well as with sub-legal acts issued by the Ministry of Finance to this end. Gains 
or other net revenues are the difference betw een the revenues and deductible expenses. The 
tax year corresponds to calendar year and it commences since 1 January and terminates on 
31 December. 
  S/C/N/448 
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 Deductible Expenses 
 
As in other countries of the region, the expe nses deducted from taxes are those which produce 
incomes, which ensure and maintain taxabl e incomes. The expenses are deductible if: 
 
• They result from economic activities which produ ce revenues or if they are related to the 
usual management of the taxpayer’ business activity. 
• They provide sufficient documents which c onfirm the destination of these expenses. 
• They are reflected into the book accounts by reducing the net assets  
 
 Personal Income Tax 
 
All individuals, residents in Albania are subject to taxes for all incomes produced wherever in 
the world, while the non-residents are subject to taxes only for incomes produced within the 
border of the Albanian territory.  The mode of supply covered by this measure;  (3) commercial presence of the following: 
 
Taxation services (8630) 
 
6. Members specifically affected, if any: 
 None 
 
7. Text available from: 
 Trade Policy Department, 
 Sector for the WTO Relations  and Economic Integration  
   Address
: 
 Ministry of Economy, Trade and Energy 
 Blv. “Deshmoret e Kombit” Nr. 1001, Tirana, Albania  Tel: (++ 355 4) 222 245 ext.157  Fax : (++ 355 4) 223455  e-mail: pkastrati@mete.gov.al
 
  
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