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TAX LIABILITIES FOR NPOs

What are the types of tax liabilities for an NPO?

The tax liabilities for an NPO are:

• Social security contributions are an obligation for every employee and employer. They are paid partly by the employer and partly by the employee, as required by law (Read more the Related Documents);

• Health insurance contributions are an obligation for every employee and employer. Even this kind of tax is paid partly by the employer and partly by the employee as required by law (Read more the Related Documents);

• Employment Income Tax (part of personal income tax), is withheld for the purpose of earning income from salaries and bonuses arising from employment relationships (Read more of Law No. 8438, dated 28.12.1998 “On income tax”, amended);

• Value Added Tax: The NPO is obliged to register for VAT in case it carries out economic, taxable activity, supplies goods or provides paid (fee-for) services according to the provisions of DCM No. 953, dated 29.12.2014 “On the Implementing Provisions of Law no. 92/2014, “On Value Added Tax in the Republic of Albania”;

• Income tax: NPOs are required to register with the tax liability for Income Tax if they carry out economic activity and realize taxable income according to the provisions of Law No. 8438, dated 28.12.1998 “On income tax”, amended;

• Withholding tax is related to taxing the personal income of individuals. Mostly, this tax payment technique applies to withholding tax for payments related to services of various kinds performed by third parties, not registered with the tax authorities, in the capacity of the trader. Such may be: payment for rented premises, benefits of membership in a supervisory council, etc. (Read more of Law No. 8438, dated 28.12.1998 “On income tax” amended)

How to make the tax declaration?

All tax declarations are made ONLY electronically.

What are the types of tax declarations, the frequency and deadlines for filing them?

Do newly registered NPOs have the obligation to prepare and submit financial statements?

Regardless of when registered during a calendar year, it is required to submit the financial statements that make up the balance sheet by March 31 of the following year.

What is the individual income statement, when it is completed and by whom?

The Annual Income Statement is completed by the individual who is required to file no later than April 30 of the following year. Individuals are required to complete and submit the Annual Individual Income Statement if they generate gross annual income from all sources (within and outside the Republic of Albania), in the aggregate amount over ALL 2 million.
The individual has the obligation to complete and submit in person the individual annual statement of personal income, but also has the right to appoint his legal representative to complete or submit his statement.

Are there penalties for failing to comply with tax liability filing deadlines?

Failure to declare and pay tax dues on time is penalized according to the provisions of Law No. 9920, dated 19.05.2008 “On tax procedures in the Republic of Albania” amended.