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
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
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
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 (firstname.lastname@example.org)
Eurofast Global, Tirana Office
Tel: +355 42 248 548