Macedonia, Bosnia and Herzegovina and Kosovo continue applying a 10 percent corporate tax rate while Montenegro implements a 9 percent tax
TIRANA, Jan. 22 – The shift to progressive taxation on corporate and personal income starting January 2014 has made Albania less competitive to other regional countries as far as the tax burden is concerned. Data show the increase of the corporate income tax to 15 percent for mid-sized and big enterprises ranks Albania now ranks Albania on par to Serbia which increased corporate income tax to 15 percent in 2013.
Macedonia, Bosnia and Herzegovina and Kosovo continue applying a 10 percent tax rate while Montenegro implements a 9 percent tax.
EU member Croatia and EU aspirant Turkey apply the highest rate in the region at 20 percent.
The shift to progressive personal income tax has also increased Albania’s tax rate for people earning more than 130,000 lek/month.
Compared to other regional countries, Albania ranks after Croatia for the high personal income rates, followed by Serbia with 12 percent, Bosnia, Macedonia and Kosovo with a maximum of 10 percent and Montenegro at 9 percent, according to data published by the Open Data research centre.
The latest 2014 World Bank Paying Taxes report estimates the total tax rate in Albania at 31,7 percent of profit, considerably higher than in Croatia, Macedonia, Montenegro, Bosnia and Herzegovina, Kosovo, but lower than Serbia.
However, Albania has managed to remain one of the top recipients of foreign direct investment in the region.
Albania remains one of the top FDI recipients in South-East Europe outperforming even more developed regional economies mainly due to its investor-friendly business environment, according to the 2013 World Investment report published by the United Nations Conference on Trade and Development (UNCTAD). The report shows Albania attracted USD 957 million in foreign direct investment in 2012, down 7.6 percent compared to 2011, but remained the second largest FDI recipient among six transition economies of the South-East Europe after new EU member Croatia.
