Do I have to declare and pay tax on extra income?
Yes — extra income that is not taxed at source must be declared, and here hides a stale figure many people get wrong. Under Law no. 29/2023 on income tax, anyone with untaxed income over 50,000 lek a year from sources not withheld at source (rent, commissions, casual work, online platforms) must file the annual individual declaration. Investment income — rent, interest, capital gains — is taxed at 15%. The most dangerous myth today concerns free professions: many believe “freelancers pay 15% since 2024”. But in June 2024 the Constitutional Court struck down the 15% rate as disproportionate — so the self-employed with turnover up to 14 million lek stay at 0% until 31 December 2029, while above 14 million the rate is 23%. Mind the figure: 50,000 new lek is often heard as “500,000” in old lek.
📋 The rules
- Law no. 29/2023 requires an annual individual declaration when you have untaxed income over 50,000 lek/year from sources not withheld at source.
- Investment income (rent, interest, capital gains) is taxed at 15%; dividends have a separate rate.
- Free professions were to be taxed at 15% (up to 14m lek) and 23% (over 14m) from 1 January 2024 under the original law.
- In June 2024, the Constitutional Court struck down the 15% rate: turnover up to 14m lek is taxed at 0% until 31.12.2029, over 14m stays at 23%.
- Employment salaries are withheld at source; the part up to 50,000 lek/month is exempt, so “extra income” is usually what falls outside the salary.
🔓 Exceptions
- Income already taxed at source (e.g. salary, some interest) does not necessarily require a second declaration for the same amount.
- Below the threshold of 50,000 lek/year from untaxed sources, the duty to file an annual individual declaration may not arise.
- The free-professions regime is in flux: after the Constitutional Court ruling the government is working on a new scheme, so the rules may be updated.
⚠️ Penalties & fines
The cost of not declaring is not just the missing tax. The tax administration can claim the unpaid tax plus late interest and fines for non-declaration or late declaration, and the calculation goes back in time. Repeated bank inflows with no declared source can trigger an audit and questions about the origin of the money. For landlords, unpaid 15% on rent surfaces when the tenant asks for a contract or when the property is sold. Beware the free-professions trap: if you rely on the old 15% figure you may pay wrongly — today turnover up to 14 million lek is 0% until 2029. And mind the reading: 50,000 new lek is 500,000 old lek, so the threshold looks ten times higher than it really is.
📎 Official sources
- QBZ · Law no. 29/2023 on income tax →
- Tax Administration · annual individual income declaration (DIVA) →
- Constitutional Court · ruling on free professions →
❓ Frequently asked
When must I file the annual individual declaration?
When you earn untaxed income over 50,000 lek a year from sources not withheld at source, such as rent, commissions or casual work, the duty to declare arises. This amount is in new lek; it is often heard as 500,000 old lek, but it is the same threshold.
How is income from rent or investment taxed?
Investment income, which includes rent, interest and capital gains, is taxed at 15%, while dividends have a separate rate. Non-payment surfaces when a rental contract is requested or when the property is sold, so timely declaration is cheaper.
Do freelancers pay 15% since 2024?
Not anymore: the law set 15% from 1 January 2024, but the Constitutional Court struck down that rate in June 2024 as disproportionate. So the self-employed with turnover up to 14 million lek stay at 0% until 31 December 2029, while above 14 million the rate is 23%.
What about income from online platforms?
Income from casual work or online platforms falls under income to be declared if it is not withheld at source and exceeds the annual threshold. The exact classification depends on whether it is business activity or occasional income, which changes the rate.
What do I risk if I do not declare?
The tax administration can claim the unpaid tax together with late interest and fines, calculated back in time. On top of that, large inflows with no declared source can trigger an audit and questions about the origin of the money.
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