Oct 3, 2024 — Individuals in Albania earning over 100,000 leks (approximately €1,000) gross monthly will be required to file the Annual Individual Income Declaration (DIVA) starting next year. This change marks a significant shift in the country’s tax reporting framework, previously applicable only to those with annual incomes exceeding 2 million leks.
The Ministry of Finance has described this expansion as a positive measure to enhance voluntary compliance and transparency. “Lowering the exclusion threshold from 2 million leks to 1.2 million leks annually encourages more individuals to report their earnings,” the ministry stated.
Additionally, individuals will need to declare any annual income exceeding 50,000 leks, regardless of whether it is subject to final withholding tax. This adjustment aims to capture a broader spectrum of income, reflecting Albania’s growing economy and the government’s commitment to improving tax collection.
Tax on employment income, along with mandatory social and health insurance contributions, is crucial for the country’s revenue system. However, the current labor tax framework requires adjustments to simplify compliance and reduce complications related to various tax bases.
Failure to complete the DIVA declaration may result in fines that increase if left unpaid. In the previous year, about 73,790 individuals submitted their declarations, with approximately 24,224 reporting incomes above the former threshold of 2 million leks.
These measures are part of a broader initiative to improve tax compliance and address the informal economy, which has long posed challenges to Albania’s financial stability. As the government modernizes its fiscal policies, these changes reflect a commitment to creating a more transparent and equitable taxation system.
