- All forms of tax relief relate to the income of an individual in Albania.
- The following amounts are subject to the definitions and limits in Albanian law.
|Personal Tax Relief||Comments|
|Compulsory social security payments||Fully deductable.|
|Voluntary payments for a pension and medical insurance||Up to a limit.|
|Donations||Up to a limit.|
|Interest on Loan||Interest on loans for education studies is tax deductible.|
Albania Business DeductionsIn addition to the reductions/credits specified above, reductions and business expenses may be claimed in Albania as follows:
- Offset of losses - A loss may be offset up to three years forward.
Carryback of losses is not allowed.
- Consolidated statements - it is not possible in Albania to offset a loss in one company in a group against the profit of another company in the group.
- Financing costs - Interest on credit is allowable for tax, if not exceeding the 4:1 debt to equity ratio,up to 30% of the company income before EBITDA. Non deductible interest can be carried forward, subject to certain terms.
An employer's contributions to pension and health funds that are not legally compulsory are allowable to a limit.
Albania Depreciation of Fixed Assets
- The customary method of depreciation in Albania is the declining balance method.
- For intangible assets the straight line method is in use .
- A table of rates of depreciation according to the declining balance method is as follows:
|Type of Asset||Depreciation Percentage|
|Machinery and equipment||5%|
|Infrastructure, roads and transport vehicles||20%|
|Computers and software||25%|
|Other fixed assets||20%|