Albania to remove taxes for digital nomads

[mud]

This just got shared from connections in the Albanian Government.

Digital Nomad Visa holders to become tax free.

 

[daxbr]

Thank you. Got a link to the source?

 

[backpacker]

That begs the question: If Albania considers these nomads not being tax residents, where are they tax residents?
Nowhere??

How do Albania DTT's handle this new circumstance??

 

[mud]

Thank you. Got a link to the source?

No sorry. Not yet. It was from an internal government announcement today

 

[Larin]

That begs the question: If Albania considers these nomads not being tax residents, where are they tax residents?
Nowhere??

How do Albania DTT's handle this new circumstance??

They are a tax resident in the country(s) where the law states they are a tax resident. Just not in Albania... DTTs would probably not apply since they are not a tax resident of Albania.

 

[backpacker]

They are a tax resident in the country(s) where the law states they are a tax resident.

... which means that many of these digital nomads will simply not be a tax resident anywhere on Planet Earth if they spend most of their time in Albania.

 

[Larin]

... which means that many of these digital nomads will simply not be a tax resident anywhere on Planet Earth if they spend most of their time in Albania.

That would certainly not be the case with Ukrainians or Americans. Or those that happen to have an apartment available to them in Germany. Or those that have centers of vital interests elsewhere on planet Earth.

 

[Martin Everson]

Watch out...you may end up paying taxes to the Albanian mafia anyway...lol

 

[Konstanz]

Nomad in Albania. Yes, I am just running to live in Albania

 

[backpacker]

That would certainly not be the case with Ukrainians or Americans. Or those that happen to have an apartment available to them in Germany. Or those that have centers of vital interests elsewhere on planet Earth.

In post #6 I said "MANY".
What you mention are obvious and well-known cases.

Aside from the obvious, "centre of vital interest" is an OECD DTT terminolgy. However, exactly these DTT's do not apply in the case of a digital nomad in Albania.

So, we are back to the level of national tax laws of the countries involved.
If the digital nomad structures his personal and professional situation with hindsight and favours a still affordable country in Europe, Albania can be an interesting option.

Another aspect is CRS. Many digital nomads will name Albania as their domicile and tax residency. What will Albania do with this CRS data ....

 

[khinkali]

I wonder what the legal wording will be. The funny thing about saying that digital nomads working for offshore enterprises won't be tax residents, is that this in itself wouldn't exempt work done on Albanian soil from being taxed, not prevent the foreign enterprise from having a PE. I doubt that is the plan, but the wording above is far from clear.

 

[Larin]

In post #6 I said "MANY".
What you mention are obvious and well-known cases.

Aside from the obvious, "centre of vital interest" is an OECD DTT terminolgy. However, exactly these DTT's do not apply in the case of a digital nomad in Albania.

Although it may be OECD language, it has been incorporated into many national tax legislations. Spain, France, and most of the Western world has reference to economic/vital interests. And since you will not be considered an Albanian tax resident you will most likely not be able to rely on DTTs. This means that you should properly sever your tax residency before moving to Albania under this program.

Another aspect is CRS. Many digital nomads will name Albania as their domicile and tax residency. What will Albania do with this CRS data ....

I suspect not much.

 

[phatoz]

That begs the question: If Albania considers these nomads not being tax residents, where are they tax residents?
Nowhere??

How do Albania DTT's handle this new circumstance??

That depends… they won’t be tax resident in Albania. Then you get into central life and domicile… if you’re from a country like Australia then when there’s no other claim on tax status the oz govt reserve right to come after you if you can’t produce a tax residence certificate for somewhere else.

 

[backpacker]

That depends… they won’t be tax resident in Albania. Then you get into central life and domicile… if you’re from a country like Australia then when there’s no other claim on tax status the oz govt reserve right to come after you if you can’t produce a tax residence certificate for somewhere else.

Sure, I can also add Eritrea and Hungary to this list.
All very specific cases and not exactly "MANY".
Even most Europeans can make use of this new tax free option (if it then really gets approved).

Furthermore, many countries agreed for an amended Art. 4 which is not inline with the OECD Model Tax Convention: Even if a person is not considered to be a tax resident by national law, he/she becomes a tax resident due the applicable DTT.
Well worth checking every individual case!

 

[Conte Ugolino]

Albania already has no taxes until 120k a year and also basically you can just go there, and get the money and not much will happen as they're already behind on inspections so it's not that the police will come to audit you.
If you register with something called a "Physical Person Licence" which in Albanian is a "NIPT" you just pay some city taxes + social insurance (they're static, like 100 euros a month in total and you get access to medicine)

 

[Tepesch]

Albania already has no taxes until 120k a year and also basically you can just go there, and get the money and not much will happen as they're already behind on inspections so it's not that the police will come to audit you.
If you register with something called a "Physical Person Licence" which in Albanian is a "NIPT" you just pay some city taxes + social insurance (they're static, like 100 euros a month in total and you get access to medicine)

The 0% tax up to 120k seems to have been removed? Do you have the current information on this?
https://albaniandailynews.com/news/self-employed-to-pay-9-effective-income-tax-rate-in-2023

 

[Conte Ugolino]

The 0% tax up to 120k seems to have been removed? Do you have the current information on this?
https://albaniandailynews.com/news/self-employed-to-pay-9-effective-income-tax-rate-in-2023

A few points on this:
- This law is being discussed and hasn't been passed. I assume the 0 tax was just to lure business as a start but they don't have the guts to pass it now, especially during election times. On a side note, as I mentioned, no one is really gonna check if you have money in a revolut/wise card really...
- As I mentioned it's not really 0 as you pay a flat small flat tax that includes city, pension, and social. I think currently is around 100 euros a month + you gotta pay an accountant. Good ones are around 50 euros a month, normal fees are around 20-30 euros a month.
- It's not mentioned there but for digital nomads/tech people, it might be at max 5% in the years to come.

Edit:
I know the situation up close in Tirana as I have a few friends that work there and considering opening a company there myself.

 

[Tepesch]

A few points on this:
- This law is being discussed and hasn't been passed. I assume the 0 tax was just to lure business as a start but they don't have the guts to pass it now, especially during election times. On a side note, as I mentioned, no one is really gonna check if you have money in a revolut/wise card really...
- As I mentioned it's not really 0 as you pay a flat small flat tax that includes city, pension, and social. I think currently is around 100 euros a month + you gotta pay an accountant. Good ones are around 50 euros a month, normal fees are around 20-30 euros a month.
- It's not mentioned there but for digital nomads/tech people, it might be at max 5% in the years to come.

Edit:
I know the situation up close in Tirana as I have a few friends that work there and considering opening a company there myself.

Great thank you for the reply. I would be happy to pay 5% tax if I can have residency and tax return there. This 5% you mentioned for digital nomad/ tech would this be for a sole trader or for an Ltd. equivalent with limited liability( In this case 5% corp tax rate+ 8% dividend tax or corp tax rate + taxation of dividend 5% in total? I am also interested in Albania.

 

[Conte Ugolino]

5% for tech is for sole traders and it's capped at around 120k revenue (not income/profit!) , you make more than that you start paying ~15% in taxes right away.

LLC equivalent ( SHPK or SHA ) is either 15 or 25% ( not sure at this moment as Kosova has it 15% and they wanted to catch up )

 

[Conte Ugolino]

@Tepesch I did check up with my accountant there and apparently for less than 144k euros a year, until 2029 you'll have 0% corp tax for LLCs in Albania ( operational costs are around 1k a year in city taxes but to the goverment itself its 0 for less than 144k euros until 2029 with the usual 8% divident )