Kosovo Investment Income Guide: Dividends 0%, Interest 10%, Royalties 10% 2026

Q: What is the procedure for claiming treaty relief?

Submit a Treaty Relief Application and Certificate of Tax Residency to the payer. Reduced rates apply at source. If over-withheld, file a refund claim with the ATK.

Kosovo applies withholding taxes on investment income paid to non-residents: dividends at 0%, interest at 10%, and royalties at 10%. Residents are generally exempt from withholding tax on dividends and interest. Double Taxation Treaties (approximately 27 treaties) may further reduce rates. Here is how investment income is taxed in 2026.

The taxation of investment income in Kosovo 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 ATK administers withholding tax obligations — the payer (the Kosovan company or individual) is responsible for withholding and remitting the tax. Cross-border tax guide →

Real-world example: A Kosovan company pays EUR 50,000 in dividends to a non-resident shareholder. WHT at 0% = EUR 0, net payment = EUR 50,000. A resident Kosovan shareholder receives dividends without any WHT. Interest of EUR 20,000 paid to a non-resident lender: WHT 10% = EUR 2,000. Royalties of EUR 30,000 paid to a non-resident licensor: WHT 10% = EUR 3,000, potentially reduced under DTT. Corporate tax overview →

Withholding Tax Rates on Investment Income

Dividends — residents: 0% WHT — dividends paid to Kosovan resident individuals and companies are exempt
Dividends — non-residents: 0% WHT — Kosovo does not impose withholding tax on dividends to non-residents
Interest — residents: 0% WHT — interest paid to Kosovan residents is exempt
Interest — non-residents: 10% WHT — may be reduced under applicable DTT
Royalties — residents: 10% WHT — domestic rate applies to residents
Royalties — non-residents: 10% WHT — may be reduced under applicable DTT

The 0% dividend WHT is exceptionally attractive and makes Kosovo a premier jurisdiction for holding companies. By comparison, Albania charges 8%, Serbia 15%, and many EU countries 15-30% on outbound dividends before treaty relief.

Double Taxation Treaty Network

Kosovo has approximately 27 Double Taxation Treaties covering both EU and non-EU countries. Treaties generally reduce withholding tax rates:

Dividends: Already 0% domestically — treaties confirm this treatment
Interest: Treaty rates typically range from 5% to 10% (compared to 10% domestic)
Royalties: Treaty rates typically range from 5% to 10% (compared to 10% domestic)

Treaty benefits require the recipient to be the beneficial owner and provide a Certificate of Tax Residency from the treaty jurisdiction. Kosovo's treaty network includes EU member states, UAE, Turkey, Switzerland, Saudi Arabia, Singapore, and 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 10% WHT
Government bonds: Interest on Kosovan government securities may have specific tax treatment
Capital gains on investments: Treated as ordinary income and taxed at PIT 0-10% or CIT 10%

Compliance and Reporting

Kosovan companies paying dividends, interest, or royalties to non-residents must withhold the appropriate tax and remit it to the ATK 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 ATK. Failure to withhold correctly results in the payer being liable for the unpaid tax plus penalties.

Are dividends from Kosovan companies exempt for residents?

Yes. Dividends paid by Kosovan resident companies to Kosovan 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 Kosovan 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 ATK.