Albania

Tax measures – Direct and Indirect     |     Employment-related measures     |     Economic stimulus measures     |     Other measures and sources

Return to homepage  |  Last updated: 24 June, 2020

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Measures taken for certain category of employees

• Employees having terminated the employment due to COVID-19 situation during the period 1 March -17 May 2020 and being employed by companies having closed or reduced the activity during the pandemic situation would be entitled to benefit an one-off payment of ALL 40,000. This compensation will be attributed to the employees who have worked for employers/companies having an annual turnover exceeding ALL 14 million.
• The employees who are not eligible to benefit the above compensation are those having earned an annual gross income during 2019 which exceeds ALL 2 million or if working for employers performing specific activities  If the employee has been double employed, he/she would be eligible for the benefit only once. The deadline for application to benefit the one-off salary compensation was due until 5 June 2020. If the application is not done by the employer, the government will transfer directly in the bank account of the employee the amount of ALL 40,000.
• Employees working for legal entities or sole entrepreneurs registered for CIT or as small businesses and having realized an annual turnover not exceeding ALL 14 million during 2019,  would be supported by payment of the minimum salary of ALL 26,000 per month. Double employed individuals shall benefit only one payment regardless of being simultaneously in two payroll lists.
• The salary subsidy will be payable upon successfully meeting the conditions set out in the Decision of the Albanian Government. The Albanian tax authorities should verify within the first 10 days of the following month after application and may perform on-site visit investigations to confirm whether the applicants have suspended the business activity in accordance with the governmental guides.

Measures for the self-employed

• Self-employed individuals realizing an annual turnover not exceeding ALL 14 million and their family members working against no payment in the same business would be entitled to benefit the minimum salary of ALL 26,000 per each person.
• The financial subsidy will be awarded upon application and confirmation of the tax authorities that the criteria set out in the decision of the Albanian Government for this purpose are met.

State guarantee for businesses’ loans

• The state guarantee at a maximum of EUR 88 million will be allocated to banks for disbursement of loans to legal entities having suspended or reduced the activity due to the pandemic situation. The state guarantee is not compulsory for the state, while will be activated only of the borrower is not able to pay the total or partial amount borrowed from the bank to cover the monthly salaries of employees.
• The borrower should be a taxpayer exercising an activity which is impacted by the viral situation and has suspended or reduced the activity due to spread of COVID-19 as defined in the respective decision. The application should be filed within the duration of the pandemic situation.
• The state guarantee coverage does not apply to entrepreneurs or legal entities having an annual turnover of up to ALL 14 million and whose are entitled to benefit the minimum salary subsidy scheme approved earlier by the Council of Ministers.
• The maximum loan exposure cannot exceed 3 monthly salaries (up to ALL 150 thousand/month) of the employees declared in the payroll of the employer.
• The duration of the loan agreement could be up to 2 years period. The grace period shall be 3 months and the interest rate will not exceed 2.85%. No administrative costs shall be applied for the approval of the loan agreement.
• The approved state guarantee does not cover in any case the loan’s interests or penalties deriving from the breach of the terms of the loan’s agreement.

Main Sources of information

• COVID 19 – New deadlines and relieves for income tax declarations
• Albania: State guarantee for businesses’ loans

Tax: Alba Paparisto – apaparisto@kpmg.com
Legal: Juliana Mateeva – jmateeva@kpmg.com
Restructuring: Zdravko Moskov – zmoskov@kpmg.com