Fast Advices

Does the small business pay income tax?

The question 

I am a small business trader. I wanted to know if we pay income tax in my case? 

Answer 

Personal income tax includes all types of income of individuals. 

Resident individuals (you) are subject to personal income tax liability during the tax period for all sources of income (inside and outside the territory of the Republic of Albania), while non-resident individuals are liable for personal income tax during the tax period for sources of income in the territory of the Republic of Albania. 

This means that if in addition to income as a business, you have other income from bank interest, rent, or any other source of income they will be subject to taxation at the time the transaction takes place (rent payment eg) or occurs (interest calculation by the bank e.g.). 

If these revenues exceed the amount of 2 million ALL for the calendar year, then it is a legal obligation to complete the declaration for individual income.

This statement is independent of the income statement as a small business. Your employee is not exempt from this tax if you are self-employed. 

But even if you have income from expropriations, income from the health scheme, or benefits and indemnities, and income of a compensatory nature, you are exempt from personal income tax. 

This means that if you hire employees to help your business, they themselves are not exempt from personal income tax, in the role of employees for the salary they receive, but if it exceeds the taxable monthly threshold. 

If you or your employees have more than two employment relationships, they will be subject to tax for both salary incomes together. 

That would be the explanation for your question.