WB6 IIP
Western Balkans Six
Investment Incentives Platform
The Western Balkans Six Investment Incentive Platform is the first of its kind in the region, providing detailed information on available incentives in each of the WB6. It is one of the key measures under the Regional Investment Area, which is part of the Common Regional Market Action Plan 2021-2024.
Developed with input from Investment Promotion Agencies (IPAs) across the region, the platform includes both financial and non-financial incentives, categorized by type, sector, and target audience.
It provides comprehensive information for investors looking to invest in the WB6. As an evolving resource, the platform will be updated every six months to ensure it remains current and relevant.
Foreign Tax Credit on Corporate Income Tax (CIT)
- Economy name
- Albania
- ID
- A2
- Incentive name
- Foreign Tax Credit on Corporate Income Tax (CIT)
- Brief description
-
Albania applies foreign tax credits rights even in case there is no double tax treaty in place with the economy where the tax is paid. If a double taxation treaty is in force, double taxation is avoided either through an exemption or by granting tax credit up to the amount of the applicable corporate income tax rate of Albania (currently 15%).
- Legal reference name
- Law No. 29/2023 “Income Tax” (“the new law”) dated 30 March 2023 was published in Albania’s Official Gazette 02/2023
- Legal reference
law section / article -
Article 42
1. If during a tax year, the resident entity realizes tax income from foreign source territory of Albania, the tax to be paid by that entity for this income must deduct the amount of tax paid in a foreign economy for this income. Foreign tax amount paid is confirmed by the specific documentation issued for this purpose by the foreign economy where incomes have been realized and according to the deadlines and procedures defined in the instruction by the minister responsible for finance.
2. Crediting of foreign tax paid described in point 1 of this article cannot be carried over the tax payable on taxable profit for foreign source corporate income if this income would have been realized in Albania.
3. The tax credit, as defined in this article, is calculated separately for each foreign economy, which is a source of income or profits, if the income is realized from foreign sources in more than one economy.
- Incentive group
- Financial
- Incentive category
- Corporate Income tax (CIT)
- Economy-wide/Sector-specific
- Economy-wide
- Sector (Simplified)
- All sectors
- Sector (NACE)
- N/A
- Size of firm that can use incentive
- All sizes of firms
- Level at which incentive is available
- Economy-wide
- Ownership of firm that can use incentive
- Any
- Incentive location
- General
- Main objective of the incentive
- Market expansion
- In case of grant, share of grant in investment (in %)
- Contact Info
- Street "Gjin Bue Shpata", Tirana 1000
- Weblink to Incentive information in English
- Click to open
- Weblink to Incentive information in local language
- Click to open
- Eligibility criteria
description -
If a resident entity in Albania earns taxable income from sources outside the economy during a tax year, the entity can deduct the amount of tax paid in a foreign economy on this income from its tax liability in Albania.
To claim the foreign tax credit, the entity must provide specific documentation issued by the foreign economy where the income was earned, confirming the amount of foreign tax paid. These documents must adhere to the deadlines and procedures established by the Ministry responsible for finance of Albania.
The amount of foreign tax that can be deducted from the tax liability in Albania cannot exceed the tax payable in Albania on the same income if it were earned within the economy's territory.
If the entity earns income from foreign sources in more than one economy, the foreign tax credit must be calculated separately for each economy
- Eligibility criteria
weblink - Click to open
- Awarding Authority (Name)
- Ministry of Finance, Ministry of Economy and General Directorate of Taxes
- Application procedure + Weblink (where available)
- The procedure is defined by the Ministry of Finance: https://www.tatime.gov.al/eng/c/4/entrepreneurs
- Implementing Authority (Name)
- Ministry of Finance, Ministry of Economy and General Directorate of Taxes