The tax period for PIT purposes is the calendar year. However, withholding taxes on wages and pension contributions are made on a monthly basis (i.e. upon payment).
PIT returns are filed annually, and the deadline to submit them is 31 March of the following year.
Payment of tax
Each employer is responsible for withholding the tax and pension contribution from taxable salaries paid to employees, including payments to non-business individuals, for professional, technical, management, and financial services, payments for service contracts, payment for actors, musicians, athletes, and dependent agents.
Employers are required to submit payroll records, together with pension contribution liabilities, and make the respective payment to the Tax Administration of Kosovo by the 15th day of the following month.
Tax audit process
The Kosovo tax system is based on self-assessment. Tax audits include all types of taxes that the individual is subject to. If any discrepancies result from the tax audit, the tax authorities issue an audit report and re-assessment notices, which the taxpayer can appeal to the Appeals Department within the tax authority.
A taxpayer may submit an amended tax declaration if one subsequently discovers an error in a tax declaration that has already been submitted. The deadline for submitting an amended declaration is six years after the due date of the declaration being amended.
Statute of limitations
The statute of limitations in general circumstances is six years.
Topics of focus for tax authorities
From a PIT perspective, during a tax audit, the main focus of the tax authorities is on areas relating to the calculation of gross income for employees (i.e. allowable and disallowable expenses paid for employees), wages paid in accordance to contracts, primary or secondary employee status, etc.