General information on taxes

General Information about Taxes in Kosovo

The responsibility of the Tax Administration of Kosovo (TAK), as an Executive Agency with full autonomy, is to administer the applicability of any type of tax applied by tax legislation in the Republic of Kosovo.

TAK's mission is to raise the highest level of voluntary compliance in accordance with the tax legislation in force, as well as the provision of professional, transparent and effective services for taxpayers.

TAK is responsible for the collection of central government taxes, which include:

• Value Added Tax (VAT) on domestic supplies;
  
• Personal Income Tax;
  
• Corporate Income Tax;
  
• Withholding taxes;
  
• Pension Contributions;
• Issuance of gambling licenses.

This document is based on the relevant Laws and Guidelines in force, such as: Law on Tax Administration and Procedures, No. 03/L-222, No. 04/L-102, No. 04/L-223 and UA No. 03/2016, No. 15/2010, Law on Value Added Tax - VAT No. 05/L-037 and UA No. 03/2015, No. 06/2016, Law on Personal Income Tax - TAP No. 05/L-028 and UA No. 01/2016, Law on Corporate Income Tax - TAK No. 05/L-029 and UA No. 02/2016, Law on Pension Contributions - KP, No. 04/L -168, No. 04/L-101, No. 05/L-116, Gambling Law No. 04/L-080 and UA No. 03/2013.

You can find all the aforementioned Laws and Guidelines in the Official Gazette of Kosovo, at the link: http://gzk.rks-gov.net/default.aspx

Tax rates in Kosovo:

Value added tax - turnover VAT over 30,000 euros and tax rates of 8% and 18%, corporate income tax - VAT (under 50,000 euros), manufacturing, commercial and transport activity - 3%, service activity -9%, Corporate income tax - VAT (over 50,000 euros) - 10%.

Personal income tax - TAP (over 50,000 euros) Annual income 0 to 960 -0%, Annual income 960 to 3,000 -4%, Annual income 3000 to 5,400 -8%, Annual income from 5,400 onwards- 10%, Tax on salaries (monthly) (over 50,000 euros), Monthly income 0 to 80 - 0%, Monthly income 80 to 250- 4%, Monthly income 250 to 450, Monthly income from 450 onwards - 10%

Tax on rent, interest and property rights -10%, Tax for special categories -3%, Tax for non-residents -5%

Requirements for the fulfillment of tax obligations

Persons who develop economic activity, based on tax legislation, are obliged to:

Register - Keep Documentation - Declare tax - Pay tax.

Value added tax

For Value Added Tax (VAT) purposes, a taxable person is any person who is, or is required to be, registered for VAT, and who independently conducts an economic activity in a regular or irregular manner, regardless of the purpose or outcome of that economic activity.

Any person who fulfills all the conditions of the definition of a taxable person is required to register for VAT if, within the calendar year, the turnover exceeds thirty thousand euros (€30,000).

VAT is scaled at two rates, the standard rate of 18% and the reduced rate of 8%, on the value of imported supplies and taxable domestic supplies, with the exception of exempt supplies and supplies treated as exports.

A transaction is subject to taxation for VAT in Kosovo, if it is a supply of goods or a supply of services, carried out against payment, within the territory of Kosovo, by a taxable person acting as such. Also, the import of goods is subject to VAT taxation.

Personal Income Tax

Personal Income Tax applies to all income received by an individual that is taxable under the Personal Income Tax Law. Taxpayers are resident and non-resident natural persons, sole proprietorships, partnerships and companies, who receive or generate gross income from any source, including salary, business activity, rent, lottery winnings, interest, capital gains, use of property intangible, as well as any other income that increases the net worth of the taxpayer.

The object of taxation for the resident taxpayer is the taxable income with source in Kosovo and outside Kosovo, while for the non-resident taxpayer it is only the taxable income with source in Kosovo.

Taxable income for a tax period is considered the difference between the gross income received or derived during a tax period and the deductions allowed in relation to that gross income.

Tax rate for Personal Income Tax:

• 0% 0 to 80 0 to 960
  
• 4% 80 to 250 960 to 3000
  
• 8% 250 to 450 3000 to 5400
  
• 10% 450 onwards 5,400 onwards

Taxpayers with annual gross income over €50,000 and those who have voluntarily chosen to be taxed on real income are taxed according to the tax rates mentioned above, while taxpayers with annual gross income of €50,000 or less are taxed on gross income with 3% (for activities: trade, transport, agriculture and similar commercial activities) or 9% (for activities: service, professional, craft, entertainment and similar). In addition to tax, these taxpayers (self-employed) are also obliged to pay the Pension Contribution.

Salaries of employees from the primary employer are taxed according to tax rates (0%; 4%; 8% and 10%), while salaries of employees from the secondary employer are taxed at 10%.

Each employed citizen of Kosovo is obliged to pay 5% of the gross salary in the name of the Pension Contribution. Likewise, the main employer and the secondary employer for employees who are citizens of Kosovo, contribute 5% of the employee's gross salary in the name of the pension contribution.

Corporate Income Tax

Corporate Income Tax applies to all taxable corporate income. Taxpayers are considered: Corporation or any other business enterprise that has the status of a legal entity according to the law in force in Kosovo; Commercial company operating with assets in social or public ownership; The organization registered as a non-governmental organization; The non-resident person with a permanent unit in Kosovo.

The object of taxation for the resident taxpayer is the taxable income with source in Kosovo and outside Kosovo, while for the non-resident taxpayer it is only the taxable income with source in Kosovo.

Taxpayers with annual gross income over €50,000 and those who have voluntarily chosen to be taxed on real income are taxed at the rate of 10%, while taxpayers with annual gross income of €50,000 or less are taxed on gross income at 3 % (for activities: trade, transport, agriculture and similar commercial activities) or 9% (for activities: service, professional, craft, entertainment and similar).

For taxpayers with annual gross income over €50,000 and those who have voluntarily chosen to be taxed on real income, taxable income for a tax period is considered the difference between the gross income received or derived during a tax period and deductions allowed in relation to that gross income.

Tax declaration and payment deadlines:

1. Statement of tax on rent and intangible assets - IR, From the 1st to the 15th of each quarter
   
2. Quarterly payment of tax and contributions for large individual businesses -IL, From the 1st to the 15th of each quarter
   
3. Quarterly payment of tax and contributions for small individual businesses -IS, From the 1st to the 15th of each quarter
   
4. Statement of tax withholding and payment - WM, From the 1st to the 15th of every month
   
5. Monthly statement of withholding and payment of tax on interest, property rights, rent and special categories -WR, From the 1st to the 15th of every month
   
6. Quarterly statement of advance payment for small corporations -QS, From 1 to 15 of each quarter
   
7. Quarterly statement of advance payment for large corporations - QL, From 1 to 15 of each quarter
   
8. Corporate income tax declaration -CD, From January 1 to March 31
9. Declaration and payment form for VAT -TV, From the 1st to the 20th of every month
   
10. Annual declaration form and payment for personal income tax - PD, From January 1 to March 31
    
11. Statement of pension contributions and payment form -CM, From the 1st to the 15th of every month
    
12. Request for refund and return/return - KRR, From the 1st to the 20th of each month or quarter
    
13. Partnership income tax declaration - DO, From January 1 to March 31

Source: https://www.atk-ks.org/portfolio/informata-te-pergjëshme-per-tatimet-ne-kosove/