Albania

The gross amount of interest and royalties paid to non-resident companies is subject to a 15% tax rate, while dividends and distribution of profits are taxed at a rate of 8%, unless a DTT provides a different rate.

The 15% tax rate is levied on the gross amount of payments for technical, management, installation, assembly, or supervisory work, as well as payments to management and board members.

If a non-resident company does not create a PE in Albania, and a DTT exists between Albania and the home country of the non-resident company, no WHT payment may arise.

Double tax treaties (DTTs)

Albania has signed 46 DTTs, of which 42 are in force. 

WHT rates envisaged by applicable DTTs are provided in the following table:

Notes

These notes are not extensive. The full text of the DTT should be reviewed for a comprehensive check on the conditions of application of the reduced rates.

1. If the recipient company directly or indirectly owns 50% of the capital of the paying company, a 0% rate of the gross amount of the dividends applies. If the recipient company directly or indirectly owns 25% of the capital of the paying company, a 5% rate of the gross amount of the dividends applies. A tax rate of 8% of the gross amount of the dividends applies in all other cases.
2. A tax rate of 5% of the gross amount of the interests applies in case of interests in a contracting state, which are paid to a loan granted by a bank or any other financial institution of the other contracting state, including investment banks and savings banks and insurance. A tax rate of 10% of the gross amount of the interests applies in all other cases.
3. If the recipient company or any other governmental body is a resident of the other contracting state, a 0% rate of the gross amount of the dividend applies. If the recipient company (other than a partnership) directly or indirectly owns at least 10% of the capital of the paying company, a 5% rate of the gross amount of the dividends applies. A tax rate of 8% of the gross amount of the dividends applies in all other cases.
4. If the recipient company (other than a partnership) directly or indirectly owns at least 75% of the capital of the paying company, a 0% rate of the gross amount of the dividends applies. If the recipient company (other than a partnership) directly or indirectly owns at least 10% of the capital of the paying company, a 5% rate of the gross amount of the dividends applies. A tax rate of 8% of the gross amount of the dividends applies in all other cases.
5. If the recipient company (other than a partnership) directly or indirectly owns at least 25% of the capital of the paying company, a 5% rate of the gross amount of the dividends applies. A tax rate of 8% of the gross amount of the dividends applies in all other cases.
6. If the recipient company (other than a partnership) directly or indirectly owns at least 25% of the capital of the paying company, a 5% rate of the gross amount of the dividends applies. A tax rate of 8% of the gross amount of the dividends applies in all other cases.
7. If the recipient company (other than a partnership) directly or indirectly owns at least 25% of the capital of the paying company, a 10% rate of the gross amount of the dividends applies. A tax rate of 8% of the gross amount of the dividends applies in all other cases.
8. If the recipient company (other than a partnership) directly or indirectly owns at least 25% of the capital of the paying company or is a pension scheme, a 5% rate of the gross amount of the dividends applies. The tax rate switches to 15% of the gross amount of the dividends where those dividends are paid out of income (including gains) derived directly or indirectly from immovable property by an investment vehicle that distributes most of this income annually and whose income from such immovable property is exempted from tax. A tax rate of 8% of the gross amount of the dividends is applied in all other cases.
9. 5% for royalties that are paid for the use of, or the right to use, industrial, commercial, or scientific equipment, and 8% in all other cases.