Albania: Source of income and permanent establishment rules for 2024
The new income tax law includes additional types of income considered to be sourced in Albania.
New income tax law includes additional types of income considered to be sourced in Albania
The new income tax law—Law no. 29/2023 (dated 30 March 2023 and effective 1 January)—includes additional types of income considered to be sourced in Albania.
Generally, income sourced in Albania currently includes:
- Income related to employment as well as income from fee payments for services carried out in Albania
- Income paid by resident employers for work performed abroad
- Business income attributable to a permanent establishment (PE)
- Income or capital gains from immovable property located in Albania
- Dividends or profit sharing from Albanian companies
- Interests paid by residents of Albania
In addition to the above, the new law introduces other types of income which are to be considered as being sourced in Albania including:
- Income from business activity and income of entrepreneurs and self-employed individuals for activities and services provided in Albania
- Income from mining of virtual assets or deriving from transactions with virtual assets realized by a person resident in Albania
The new law specifically considers as Albanian sourced income any type of income that arises from activities physically carried out in Albania. This change may affect many entities that deal with foreign service suppliers that are required to come to Albania in person to provide their services.
Read a December 2023 report prepared by the KPMG member firm in Albania
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