Withholding Tax on Rent in Albania: When It Applies and How to File It

Many businesses rent their shop, office or warehouse from an individual. In that case the business doesn’t just pay rent: it becomes a withholding agent and must withhold, declare and pay tax on the landlord’s behalf. Here’s how withholding tax on rent in Albania works.

When it applies

Under Law No. 29/2023, rental income is subject to withholding tax only when it is paid to an individual. So:

• Individual landlord (a natural person not renting out property as a registered business): the business withholds tax.
• Registered landlord (a company or business): no withholding; the landlord issues an invoice and declares the income itself.

The rate and how to calculate it

The withholding rate on rent is 15%, calculated on the gross rent paid.

Example: the lease sets gross rent of ALL 100,000 a month. The business pays the landlord ALL 85,000 and pays ALL 15,000 of tax to the tax office. If the lease only says “net rent ALL 85,000”, the gross amount has to be worked out correctly, so it’s best for the lease to state rent in gross terms.

Read the lease and identify the parties clearly

• Who the owner or co-owners are and in whose name payment is made.
• Whether rent is gross or net, and in which currency.
• Who pays other costs (electricity, water, maintenance, property tax).
• Duration and renewal terms. Leases of real estate are made in writing and usually before a notary.

Document the payment and the calculation

Pay rent by bank transfer and keep the payment order. Remember that cash payments between businesses and individuals are not allowed above ALL 500,000 per transaction. The bank payment and the lease are what allow the rent to be deducted in your business’s income tax.

Plan the filing and payment on time

The withheld tax is declared and paid by the 20th of the month after the month the rent was paid. If rent is paid several months in advance, tax is withheld at the time of payment. Add the deadline to your compliance calendar.

Mistakes to avoid

• Paying the full rent to an individual without withholding 15%: the business remains liable for the tax as if it were its own.
• Withholding when the landlord is a company that issues invoices.
• Paying cash without a record.
• Filing late, which brings penalties and late-payment interest.

FAQ

Does the individual landlord need to declare anything else?

Withholding is a final tax on that income. Individuals may still have to file an annual personal income return. Read about the annual personal income tax return.

What if the owner is non-resident?

Rules for non-residents and double tax treaties can change the treatment. Check the case before the first payment.

Let Abacus handle withholding tax

We review the lease, calculate the tax and file it on time. Contact us or explore our tax services.

This article is for general information and is not a substitute for professional advice on your situation. Sources: Income Tax Law No. 29/2023 (Articles 56, 58, 59); Law No. 9920/2008 on Tax Procedures (Article 59), as amended by Law No. 79/2025.