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Albania Investment Income Guide: Dividends 8%, Interest 15%, Royalties 15% 2026

Albania applies withholding taxes on investment income paid to non-residents: dividends at 8%, interest at 15%, and royalties at 15%. Residents are generally exempt from withholding tax on dividends and interest. Double Taxation Treaties (over 35 treaties) may reduce these rates. Here is how investment income is taxed in 2026.

The taxation of investment income in Albania distinguishes between resident and non-resident recipients. Residents are generally exempt from withholding tax on dividends and interest, while non-residents face withholding tax at rates specified in domestic law (subject to treaty reduction). The DPT administers withholding tax obligations — the payer (the Albanian company or individual) is responsible for withholding and remitting the tax. Cross-border tax guide →

Real-world example: An Albanian company pays ALL 500,000 in dividends to a non-resident shareholder. WHT at 8% = ALL 40,000, net payment = ALL 460,000. If the shareholder is resident in a treaty country (e.g., Germany with a 5% treaty rate), the WHT would be ALL 25,000, net = ALL 475,000. A resident Albanian shareholder receives dividends without any WHT. Interest of ALL 200,000 paid to a non-resident lender: WHT 15% = ALL 30,000. Corporate tax overview →

Withholding Tax Rates on Investment Income

  • Dividends — residents: 0% WHT — dividends paid to Albanian resident individuals and companies are exempt
  • Dividends — non-residents: 8% WHT — may be reduced under applicable DTT
  • Interest — residents: 0% WHT — interest paid to Albanian residents is exempt
  • Interest — non-residents: 15% WHT — may be reduced under applicable DTT
  • Royalties — residents: 15% WHT — domestic rate applies to residents
  • Royalties — non-residents: 15% WHT — may be reduced under applicable DTT

The 8% dividend WHT on non-residents is relatively low by European standards. Many other countries impose 15-30% on outbound dividends before treaty relief. Interest and royalty rates are also competitive.

Double Taxation Treaty Network

Albania has over 35 Double Taxation Treaties covering both EU and non-EU countries. Treaties generally reduce withholding tax rates:

  • Dividends: Treaty rates typically range from 5% to 10% (compared to 8% domestic), with some treaties providing 0% for substantial shareholdings
  • Interest: Treaty rates typically range from 5% to 10% (compared to 15% domestic), with some treaties providing 0% for certain types of interest
  • Royalties: Treaty rates typically range from 5% to 10% (compared to 15% domestic)

Treaty benefits require the recipient to be the beneficial owner and provide a Certificate of Tax Residency from the treaty jurisdiction. Albania's treaty network includes EU member states, the US, Canada, China, UAE, Turkey, and Switzerland among others.

Taxation of Other Investment Income

  • Bank interest: Interest on savings accounts and deposits earned by residents is not subject to withholding tax. Non-residents may be subject to 15% WHT
  • Government bonds: Interest on Albanian government securities may have specific tax treatment, often exempt for non-residents
  • Capital gains on investments: 0% CGT on shares and securities for both residents and non-residents
  • REIT distributions: Income from real estate investment funds follows dividend rules

Compliance and Reporting

Albanian companies paying dividends, interest, or royalties to non-residents must withhold the appropriate tax and remit it to the DPT within the prescribed timeframe (typically by the 15th of the following month). The payer must also file an annual withholding tax return. Recipients seeking treaty relief must provide: a Certificate of Tax Residency from their home country tax authority, a declaration of beneficial ownership, and any other documentation required by the DPT. Failure to withhold correctly results in the payer being liable for the unpaid tax plus penalties.

Are dividends from Albanian companies exempt for residents?

Yes. Dividends paid by Albanian resident companies to Albanian resident individuals or companies are exempt from withholding tax. This encourages domestic investment and profit distribution within the economy.

What is the procedure for claiming treaty relief?

The non-resident recipient must submit a Treaty Relief Application to the Albanian payer, along with a Certificate of Tax Residency from their home country. The payer then applies the reduced rate at source. If tax has been over-withheld, the non-resident can file a refund claim with the DPT.