30% Reduction in Advance Payments for Albanian Freelancers Announced

Discover the recent 30% reduction in advance installment payments for freelancers by Albania’s Tax Directorate. Learn about the revised payment schedule and ongoing legal challenges with Eurofast experts.

Key Changes

On May 28, the Tirana Regional Tax Directorate notified that the expense calculation for taxes from May to December has been reduced by 30%, in line with the law for self-employed individuals with turnover up to 10 million ALL. Initially, this expense reduction was not applied in the tax advance calculations sent to businesses in April, based on business declarations that often-reported low expenses due to unfamiliarity with proper accounting documentation.

Financial Implications

Payment Deadlines

  • June 30: Payments for April, May, June.
  • September 30: Payments for July, August, September.
  • December 31: Payments for October, November, December.
  • Monthly payments are due by the 15th of each month.

Calculation Issues

The 2024 profit tax prepayments for freelancers, based on 2023 declarations, were sent in April. The new “Income Tax” law mandates a 30% expense deduction for the self-employed with an annual turnover up to 10 million ALL. However, the tax administration initially did not consider this deduction, relying instead on expenses declared by businesses.

The “Income Tax” law, considered unconstitutional, faces four sues in the Constitutional Court. The first session is set for June 18th, 2024. Critics think the law violates taxpayer equality, legal principles, and disrupts competition. Potential consequences include increased service fees, tax evasion, business closures, and emigration of the middle class if the law is upheld.

In conclusion, the Tax Directorate’s 30% reduction in advance installment payments for freelancers marks a significant adjustment, addressing previous misapplications of the “Income Tax” law. This change provides crucial financial relief for self-employed individuals with turnovers up to 10 million ALL. The revised payment schedule from May to December and the ongoing legal challenges to the law underscore the importance of staying informed. Eurofast’s expert team in Albania is ready to offer relevant guidance and support at tirana@eurofast.eu.

Kondra Ingrid Eurofast

Ingrid Kodra
Global Mobility Consultant
Eurofast Tirana