Tax Administration of Kosovo (TAK), as an Executive Agency with full operational autonomy, is responsible to administer the implementation of any tax type applicable by tax legislation in Republic of Kosovo.

TAK’s mission is to enhance the voluntary compliance in line with tax legislation in force, and to provide professional, transparent and effective services to taxpayers.

The Tax Administration of Kosovo is responsible for the collection of central government taxes, which include:

• Value Added Tax (VAT) on domestic supplies;
• Personal Income Tax;
• Corporate Income Tax;
• Withholding Tax;
• Pension Contributions;

This document is based on relevant laws and administrative instruction in force, as:

All the aforementioned laws and administrative instructions are available in the Official Gazette of the Republic of Kosovo, at the link: https://gzk.rks-gov.net/default.aspx

Tax rates in Kosovo:

Tax Compliance Requirements

The persons performing economic activities, based on tax legislation, are obliged to:

Value Added Tax

For the purpose of Value Added Tax (VAT), the taxable person is any person that is, or is required to be registered for VAT, and independently carries out an economic activity on regular or irregular manner, regardless of the purpose or the result of its economic activity.

Any person that meets all the requirements of the definition on taxable person, is required to register for VAT, if within the calendar year exceeds the turnover of thirty thousand euros (30,000€).

VAT is with two rates, the standard rate of 18% and the reduced rate of 8% on the value of imported supplies and taxable domestic supplies, the exclusion of the exempted supplies and supplies considered as exports.

A transaction is subject to VAT in Kosovo, if it is supply of goods or supply of services, rendered against the payment, within the territory of Kosovo, by a taxable person that acts as such. Also, the importation of goods is subject to VAT

VAT is differentiated into two rates, the standard rate of 18% and the reduced rate of 8%, of the value of imported supplies and taxable domestic supplies, with the exception of exempted supplies and supplies treated as exports.

A transaction is subject to VAT in Kosovo, if it is supply of goods or supply of services, rendered against the payment, within the territory of Kosovo, by a taxable person that acts as such. Also, the importation of goods is subject to VAT.

Personal Income Tax

Personal Income Tax is applicable on all income received by an individual, which is taxable under the Law on Personal Income Tax. Taxpayers are resident and non-resident natural persons, individual business enterprise, partnerships and associations, which receive or create gross income from any source, including wage, business activity, rent, lottery winnings, interest, capital gains, use of intangible property, and any other income that increases taxpayer net value.

The object of taxation for resident taxpayer is the taxable income with source in Kosovo and outside Kosovo, and for non-resident taxpayer is only the taxable income with Kosovo source.

The taxable income for a tax period is considered the deference between gross income received or accrued during the tax period and the deductions allowable with respect to such gross income.

Tax rates for Personal Income Tax:

Taxpayers with annual gross income over 50,000€ and those who have voluntary opted to be taxed on real income, are taxed by above-mentioned rates, while taxpayers with annual gross income of 50,000€ or less, are taxed on gross income at 3% (for the activities of: trade, transport, agriculture and similar commercial activities) or 9% (for the activities of: services, professional, artisanal, entertainment and similar activities). In addition to the tax, these taxpayers (self-employed) are also obliged to pay the Pension Contribution.

Wages of employees from the primary employer are taxed according to tax rates (0%; 8% and 10%), while wages of employees from the secondary employer are taxed at 10%.

Each employed citizen of Kosovo is obliged to pay 5% of the gross salary on behalf of the Pension Contribution. Likewise, the main employer and the secondary employer for employees who are citizens of Kosovo, contribute 5% of the gross salary of the employee on behalf of the pension contribution.

Corporate Income Tax

Corporate Income Tax is applied on all taxable corporate income. Taxpayers are considered: Corporation or any other business enterprise that has the status of a legal entity according to the law in force in Kosovo; Business organization operating with assets in social or public ownership; Organization registered as a non-governmental organization; Non-resident person with a permanent unit in Kosovo.

The object of taxation for the resident taxpayer is the taxable income with source in Kosovo and outside Kosovo, while for the non-resident taxpayer it is only the taxable income with source in Kosovo.

Taxpayers with annual gross income over €30,000 and those who have voluntarily opted to be taxed on real income are taxed at the rate of 10%, while taxpayers with annual gross income of €30,000 or less are taxed on gross income at 3 % (for activities: trade, transport, agriculture and similar commercial activities) or 9% (for activities: services, professional, artisanal, entertainment and similar).

For taxpayers with annual gross income over €30,000 and those who have voluntarily opted to be taxed on real income, taxable income for a tax period is considered the difference between the gross income received or accrued during a tax period and deductions allowed in relation to such gross income.

Deadlines for declaration and payment of taxes: