Albania has signed a broad network of double taxation agreements (DTAs) with over 40 countries to protect foreign investors and avoid being taxed twice on the same income. These treaties define how income, dividends, royalties, and capital gains are taxed when earned across borders.
DTAs are crucial for businesses and individuals who receive income from Albania while residing or operating in another country—or vice versa.
What Do Double Taxation Agreements Do?
DTAs are bilateral treaties that determine:
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Which country has the right to tax specific types of income
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How to avoid double taxation through tax credits, exemptions, or reduced rates
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How to limit withholding taxes on dividends, interest, and royalties
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Mechanisms for information exchange and dispute resolution
For investors, these agreements offer greater legal certainty, reduce tax burdens, and encourage cross-border trade and investment.
Countries with DTA Agreements with Albania
Albania has signed DTAs with many countries in Europe, Asia, and beyond. As of today, the list includes (but is not limited to):
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Germany
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Italy
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France
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Greece
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Austria
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Switzerland
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Turkey
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United Kingdom
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United States
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China
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Canada
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Netherlands
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Spain
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Poland
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Czech Republic
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Hungary
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North Macedonia
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Kosovo
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Serbia
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Bulgaria
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Romania
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Norway
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Sweden
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Finland
Each treaty has specific terms regarding withholding tax rates and eligible income types. Investors should always review the relevant treaty before making cross-border transactions.
Key Tax Reductions
Under most DTAs, the following withholding tax rates are typically reduced:
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Dividends: Lower than the standard Albanian rate of 8%, often between 0% and 5% depending on shareholding
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Interest: Reduced to 5% or lower in many treaties
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Royalties: Often capped at 5% or 10% depending on the treaty
These reductions apply only if the beneficial owner of the income is a tax resident of the treaty country and provides the correct tax residency certificate.
How to Benefit from a DTA
To apply DTA benefits, foreign companies or individuals must:
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Prove tax residency in a country that has a valid DTA with Albania
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Submit a tax residency certificate issued by their home tax authority
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Work with a local accountant or tax advisor to complete filings
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Ensure transactions are properly documented and declared to Albanian tax authorities
Improper use or incomplete documentation may result in full withholding tax rates being applied.