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Albania: Albania signs double tax treaty with UK

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Eylem Philippou


Drilona Likaj

On March 26 2013, Albania and the UK signed a double tax treaty on income and capital. The treaty generally follows the OECD model convention.

The withholding tax at source for dividends is set at 5% if the beneficial owner is a company and holding at least 25% of the shares of the company paying the dividends or 15% (subject to aforementioned capital holding) of the gross amount of the dividends where those dividends are paid out of income (including gains) derived directly or indirectly from immovable property within the meaning of Article 6 on Immovable Property by an investment vehicle which distributes most of this income annually and whose income from such immovable property is exempted from tax. In all other cases dividends are taxed at 10%.

The withholding tax at interest is set at 6% and on royalties is set at 0%.

Gains derived from immovable property and from the alienation of shares, other than shares in which there is substantial and regular trading on a stock exchange, or comparable interests, deriving more than 50% of their value directly or indirectly from immovable property may be taxable in a state where the property is situated in.

The treaty also includes the articles on exchange of information, mutual agreement and assistance in collection of taxes as seen as in the OECD Model Convention.

The treaty shall come into force after the ratification procedures completed and ratification notices exchanged by each state and shall be applicable from:

In the case of UK;

  • In respect of income tax and capital gains tax, for any year of assessment beginning on or after April 6 next following the date on which the agreement enters into force; and

  • In respect of corporation tax, for any financial year beginning on or after April 1 next following the date on which this agreement enters into force.

In the case of Albania;

  • In respect of income derived or of capital owned on or after January 1 of the calendar year next following the year in which the agreement enters into force.

Eylem Philippou (eylem.philippou@eurofast.eu)
Eurofast Taxand, Cyprus

Drilona Likaj (drilona.likaj@eurofast.eu)

Eurofast Global, Tirana Office, Albania

Tel: +355 42 248 548

Website: www.eurofast.eu

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