Albania: Double tax treaty between Albania and India enters into force

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Albania: Double tax treaty between Albania and India enters into force

ndreka.jpg

Dorina Asllani Ndreka

The governments of Albania and India signed the agreement on the avoidance of double tax duties and the prevention of tax evasion regarding taxes on income and capital on July 8 2013. It entered into force on December 5 2014. The purpose of the agreement is to promote the economic cooperation between the two countries, as well as the establishment of a legal framework for the tax treatment, of legal and physical persons, Indians or Albanians, that have business activities or other revenues, which are under the tax jurisdiction of both countries. The provisions of this agreement have priority over the tax legislation of both countries. The competent authority who will implement this agreement in Albania is the General Directorate of Taxation.

According to the provisions of the treaty, taxes on profits from business activities will be paid only in the country where the business is resident, as long as it has a permanent office. In any case, the business can be taxed in the other country, only for the profits realised at the permanent office (establishment).

Taxes on dividends, interests, licenses and royalties, will be paid at the country where they are earned or obtained, but if the beneficial owner of these revenues is resident in the other country, the tax imposed on him/her, shall not exceed 10% of the gross amount, of the dividends, interests, licences or royalties.

When a person in Albania generates income or owns capital that in accordance with the provisions of the agreement can be taxed in India, Albania will allow a deduction from the Albanian income and capital tax, equal to the income tax paid in India. However, this deduction, in any case shall not exceed that part of the income or capital tax as calculated, before the deduction is given accordingly.

The agreement provided also the mutual information exchange (including documents), between the competent authorities of both countries, to enable the implementation of the agreement or the relevant national legislation. The contracting parties will support eachother for the collection of tax obligations, relating this agreement. Moreover, this agreement provides for certain provisions under which states can exchange information and cooperate to prevent tax evasion by entities that operate in both countries.

Considering that the agreement is already in force, in accordance with article 31, it will be effective for the incomes derived or the capital owned, on or after January 1 2014 for Albania, and after April 1 for India.

Dorina Asllani Ndreka (dorina.asllani@eurofast.eu)

Eurofast Global, Tirana Office

Tel: +355 42 248 548

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

Ryan hopes the buyout will help it expand into Asia and the Middle East; in other news, three German finance ministers have called for a suspension of pillar two
SKAT, which was represented by Pinsent Masons, had accused Sanjay Shah and other defendants of fraudulent dividend tax refund claims
TP managers must be able to explain technical issues in simple terms, ITR’s European Transfer Pricing Forum heard
Prudential had challenged HMRC over VAT group relief; in other news, Donald Trump unveiled timber and wood tariffs, and the European Commission published a ViDA implementation strategy
Australia’s CbCR rules have ‘widespread support’ and do not put American companies at a competitive disadvantage, the FACT Coalition said
Baker McKenzie advised two of the member firms involved, while several advisers provided transaction counsel to US-based Grant Thornton Advisors
Foreign remittance requirements put additional administrative burden on Indian law firms and strain their relationship with foreign associate firms, according to practitioners
She will formally take over the leadership of the private client firm in July next year, succeeding the veteran Margaret Robertson
Turley will succeed the veteran Grant Wardell-Johnson on Wednesday, October 1
It’s not all doom and gloom for the firm as it seeks to bounce back from the tax leaks controversy, but transparency and trust are still major issues
Gift this article