Taxes: Businesses that will pay 5% profit tax on January 1, 2019

Taxes: Businesses that will pay 5% profit tax on January 1, 2019

The General Directorate of Taxation notifies taxpayers about some changes and additions to the law on Income Tax and the Law on Games of Chance, where it is specified that the tax rate on gambling is 15% above gross income.

The legal provisions altered, come as the need for market development. These changes have specified some issues, which are summarized as follows:


In Article 8/1, which sets out categories of personal income tax exempt. Point 11 specifies the treatment of the transfer of the ownership right over agricultural land, where the origin of the property is the profit according to law no. 7501. Under this provision, also cases of transfer of property rights within a gendered relationship between a man, a woman, a child, through donation and / or renunciation of property when the property derives from compulsory joint ownership acquired under law no. . 7501, dated 19.7.1991, “On Land”, as amended. “

In Article 11 “Transfer of immovable property right”, the concept of land and agricultural land is specified. Also in this article it is envisaged that the exchange of land with construction area based on an exchange contract does not constitute a moment for calculating any capital gain from the transfer of immovable property.

Following the above specifications, Article 20 is repealed paragraphs 3 and 4, which deal with the known costs in the construction activity in relation to the exchange contracts.

In Article 28, differentials of the Profit Tax Rate for certain categories have been made: (These amendments enter into force on 1 January 2019)

– 5% for taxpayers with income up to 14 000 000 lek per year;

– 15% for taxpayers with income over 14 000 000 lek a year;

– 5% for legal persons, who conduct economic activities according to law no. 38/2012, “On agricultural cooperation societies”;

– 5% for the subjects that conduct certification activities as “agrotourism”, according to the legislation in force in the field of tourism. (This rate applies to a 10-year period for legal entities benefiting from the status of “certified agri-tourism subject” until December 31, 2021. The reduced rate application begins in the following tax year after obtaining the status of “certified agri-tourism subject. )

A significant change reflected in Article 33/1 “Submission of the decision on the approval of the annual result and the purpose of the profit” is the abolition of the obligation of the entity “natural person” to submit a decision on dividend distribution, regardless of tax liability , since the natural person, according to the concept of commercial law, has no legal personality and is responsible for all his assets.

Finally, as a need to harmonize the provisions of the law “On gambling in the Republic of Albania”, amended the tax rate on gambling is specified, which is 15% above gross income, which in turn implies the remaining organizer difference from the difference between the total amount played by the players in the games of chance and the amount earned from them. 

News Source: ATA

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