Albania

Foreign tax relief

If during a tax year the resident taxpayer of the personal income tax realizes tax income from sources outside the territory of the Republic of Albania, the tax to be paid by that taxpayer for this income must be deducted from the amount of the tax paid in a foreign country on this income. The deducted amount of foreign tax paid cannot exceed the amount of personal income tax that would be payable for this income, if it had been realized in the territory of the Republic of Albania.

The foreign tax credit must be calculated separately for each country, if the income is realized from foreign sources in more than one country.

The foreign tax credit must be calculated separately for the income included in the annual tax base and for the annual investment income.

Income tax can be credited based on the DTTs in force, up to the level of income tax rate applicable in Albania.

Tax treaties

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

* Signed but not entered into force.

Albania has social security agreements in place with a number of different countries. At present these are as follows:

* Albania is in the process of ratification with the following countries: France, Greece, Italy, Netherlands, and Romania.