TIRANA, Jan 2 /ATA/ 91% of the entrepreneurship in the country will be exempted from profit tax.
According to the govt. decision, businesses with annual turnover up to 14 million ALL will not pay profit tax until 2029.
The government decided to zero the profit tax for small business in order to ease the fiscal burden on this business, which is more susceptible to the difficult financial situation created by COVID-19.
Other than their contribution to budget revenues, small businesses are important for the high level of employment, as the vast majority are self-employed and household businesses.
In 2013, the number of employees in small business was estimated at 52 thousand, while in 2019, the number of employees reached 135 thousand.
During the period 2006-2013, small business has paid 19 billion ALL in taxes, while during the period 2014-2019 only 5.3 billion ALL.
From January 1, 2014, small business (taxpayers with turnover below ALL 8 million) had its profit tax reduced by half to 7.5% compared to large business (taxpayers with annual turnover over ALL 8 million), for whom the tax rate was 15%. Taxpayers with a turnover from zero to 2 million ALL paid a fixed tax of 25, 000 ALL per year.
From January 1, 2016, it was proposed to further reduce the tax rate to only 5% for taxpayers ranging from 5 million to 8 million ALL, while for taxpayers with turnover below 5 million ALL, the simplified profit tax on small business was scrapped.
Eventually the tax rate for the effect of profit tax is based on the annual turnover of taxpayers, and specifically the profit tax rate is 5% for taxpayers with annual income up to 14,000,000 ALL and 15% for taxpayers with annual income of over 14,000 000 ALL.
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