Albania: Taxation changes for the self-employed professionals

The Ministry of Finance has recently presented a draft law; the focus of which is self-employed and freelance professionals.

This draft law aims to exempt the self-employed providing professional services from the income tax rate of 0%. Currently this rate applies to freelancers, commercial and self-employed individuals, and small businesses with an income up to 14 million ALL per year.

With the new tax changes, it is now intended that, after deducting some expenses related to their professional activity, freelancers will be taxed in the same way as salaried employees.

This draft law also provides that self-employed professionals, who do not exceed 10 million ALL per year, have the right to deduct from the business income, the assumed expenses in a single amount, from 35-90%, without keeping concrete records in accounting.

The deductible rate of the assumed expenses will be determined specifically according to the category of activity.

At a time when fiscalization and reporting of real-time transactions are fully implemented, the standardization of the deductible rate of operating expenses at a certain percentage, without documenting these expenses has raised a debate. Also, the equalization approach for self-employed freelancers and employees at an entity is seen as unfair, as the individual responsibility each category has towards the company and the tax administration is different.

On the other hand, the finalization of this law aims to directly eliminate one of the most widespread tax evasions in Albania. Considering that the personal income tax from wages in Albania reaches up to 23%, for levels of payment over 200,000 ALL, many individuals have chosen to work as self-employed freelancers, benefiting from the applicable rate of 0% for tax on income from the activity of the self-employed and freelance professionals.

Regarding these developments, further announcements are expected from the Ministry of Finance.

For additional information or assistance by our local advisors please contact our Country Executive, Ms. Drilona Likaj, at our Eurofast office in Albania at

Drilona Likaj

Drilona Likaj
Country Executive
Eurofast Tirana