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Albania to Introduce Several Reforms for 2019 Including Reduced Dividends Tax Rates and Expanded Rules for Taxation of Gains from the Alienation of Property — Orbitax Tax News & Alerts

On 31 October 2018, Albania's Council of Ministers approved draft legislation for various reforms in 2019 in relation to corporate tax, value added tax, excise tax, tax administration, and other areas. One of the key measures is the reduction of the tax rate on dividend income and income derived as a partner's profit from 15% to 8%, as well as a corresponding reduction of the withholding tax on dividend payments and other profit distributions from 15% to 8%. Another important measure is the amendment of the source of income rules:

  • To extend the provisions regarding income from immovable property in Albania and gains from the alienation of such immovable property to also include mineral, hydrocarbon, and other natural resource rights; and
  • To provide that gains from the alienation of shares or similar rights deriving more than 50% of their value from such property at any time in the 365-day period preceding the alienation are considered Albanian source income.

Subject to approval, the measures will generally apply from 1 January 2019.