Taxation of Freelancers & Liberal Professions in Albania
Under the landmark Law No. 29/2023 on Income Tax, individual sole proprietors (person fizik) providing professional services (IT consulting, legal, accounting, design, engineering) are taxed as liberal professions:
- Two-Tier Progressive Profit Tax:
- Net profit up to 14,000,000 ALL/year (approx. €140,000): 15.0% Tax.
- Net profit exceeding 14,000,000 ALL/year: 23.0% Tax on the excess portion.
- Deductible Expense Options:
- Lump-Sum Deemed Deduction (30%): Freelancers with revenue up to 10,000,000 ALL may choose a flat 30.0% statutory deemed expense deduction without maintaining complex expense receipts.
- Actual Documented Accounting: Maintain itemized real invoices and business expenditure records.
- Mandatory Self-Employed Social & Health Contributions: Minimum monthly social contributions calculated on the statutory minimum wage base (40,000 ALL).
Statutory Regulatory Framework: Compliant with Law No. 29/2023 on Income Tax, Labor Code of the Republic of Albania, Law No. 7703 on Social Insurance (ISSH), and regulatory instructions issued by the General Directorate of Taxes (DPT) and Energy Regulatory Authority (ERE).