Questions and Answers for Declaration by Individuals through the “PD” Form

No. Question Answer
1 Obligation to declare the “PD” form:

Who must declare with the form “PD-Annual declaration and payment of Personal Income Tax Form”?

Declaration of the Personal Income Tax through the form “PD-Annual declaration and payment of Personal Income Tax Form” is required to be made by each individual who realizes income for which no withholding tax has been withheld by their payer. Also, the individuals who conduct economic activity and have the status of Individual Business have to declare and pay through this form.

 

The tax liability depends on the other income you generated during the year, but you can usually calculate that the approximate value of the tax liability is 10% of taxable income. For example, if the income is € 20,000, then you can estimate that the tax liability will be approximately € 2,000.

Income from capital profit
2 Capital profit from the sale of real estate:

I am an individual who bought a property (real estate) in 2018 in the amount of € 50,000. I sold this property in 2021 in the amount of € 70,000. Does this mean that the difference of € 20,000 is a capital profit and I have to pay tax on it?

As long as you have sold the real estate in the amount of € 70,000, which you have bought for € 50,000, it means that you have realized the income of € 20,000 from the sale of your real estate. This is considered a capital profit and for this you are obliged to declare and pay the tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
3 Capital profit from real estate exchange:

I am an individual who bought a property (real estate) in 2018 in the amount of € 50,000. Last year I exchanged this property for apartments. The value of the apartments is € 70,000. Does this mean that the difference of € 20,000 is a capital profit and I have to pay tax on it?

As long as you have realized such a transaction, where in exchange for the property that cost 50,000 € you have received assets in the amount of 70,000 €, it means that you have realized the income of 20,000 €. This is considered a capital profit and for this you are obliged to declare and pay the tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
4 Capital profit from the sale of real estate for which the cost cannot be determined:

I am an individual who purchased a property (real estate) in 1992, but I do not have any documents on the value of the purchase at that time and the currency was different (German Mark). I sold this property in 2021 in the amount of € 70,000. Does this mean I have realized a capital profit and I have to pay a tax?

As long as you have sold the real estate in the amount of € 70,000, which you purchased in 1992 and you do not possess any document proving the value of the purchase of that property, or any document from the competent bodies for the assessment of the asset, then for tax purposes it means that from the sale value of € 70,000 it will be recognized as an 80% cost of that value and the difference must be considered a capital profit and you must pay tax.

So, from the amount of € 70,000 you need to deduct as cost the amount of € 56,000 (€ 70,000*80%) and the difference of € 14,000 you have to consider a capital profit therefore you have to pay the tax. So, in this case it is considered that you have realized income from the capital profit in the amount of € 14,000 from the sale of your real estate. This is considered a capital profit and for this amount you are obliged to declare and pay the tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.

 

5 Inheritance from the first line:

I received a gift from my parent, who bought me an apartment which cost € 50,000. Am I obliged to declare and pay any tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”?

As long as you have received the gift from your parent (first line of inheritance), which cost € 50,000, then for tax purposes the gift from the parent is considered exempt income and you have no obligation to pay tax.
6 Inheritance from the second line:

I received a gift from my brother, who bought me a vehicle which cost € 20,000. Am I obliged to declare and pay any tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”?

As long as you have received the gift from your brother (second line of inheritance), which has cost € 20,000, then for tax purposes only the amount up to € 5,000 per year is considered exempt income , while the difference of € 15,000 is considered taxable income which must be declared and subject to tax liabilities. You need to declare it at the end of the year with the form “PD” and as in the concrete example, the amount of 15,000 € has be declared as taxable income from gifts.
7 Capital profit from the sale of crypto currencies:

I am an individual who has realized income from crypto currencies during 2021. I have invested in crypto currencies the amount of € 2,000, while at the end of 2021 I sold these crypto currencies for € 10,000. Does this mean I have realized a capital profit and I have to pay tax?

As long as you have realized income from crypto currencies in the amount of € 10,000, for which you have invested the amount of € 2,000, then for the difference of € 8,000, it is considered that you have realized a capital profit for which you must declare and pay tax on end of the year with the form “PD-Form of annual declaration and payment for Personal Income Tax”. So, when filling out the PD form, the amount of € 8,000 as in the concrete example, must be declared as taxable income from capital profit (Crypto currency).
8 Capital profit from the sale of crypto currencies:

I am an individual who has invested in crypto currencies the amount of 5,000 €. At the end of 2021 the value of these crypto currencies reached the amount of € 20,000 according to the market value, however, I have not made a sale (currency conversion into physical form) of these crypto currencies. Does this mean I have realized a capital profit and I have to pay tax?

As long as you have only invested in crypto currencies in the amount of € 5,000, while you have not made any sales at the end of the year (currency conversion into physical form), it is not considered that you have realized any capital profit. The capital profit or capital loss will be defined at the moment you sell these crypto currencies, i.e. convert them into physical form currency.
Rental income, freelance work, social networks
9 Rental income:

I am a natural person, and I have an apartment that I have rented to a family in the amount of 3,000 euros / year (250 euros / month). Do I have a tax liability, and do I have to complete the declaration?

As long as you have realized rental income and the tenant has not withheld the rent withholding tax then you have received a taxable income for which you must declare and pay the tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”. So, when filling out the PD form, the amount of € 3,000 as in the concrete example, has to be declared as taxable rental income.
10 Freelance work:

I am a natural person, resident in Kosovo who works from Kosovo for a foreign company in America and therefore all the services I offer are provided electronically. I get paid by the foreign company for the conducted work, however, there is no withholding tax withheld by the income payer. Am I obliged to declare and pay at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”?

As long as you have realized income from the provision of services, which you have provided as an individual and you do not have a business registered in Kosovo, and for the realized income you have not been withheld the withholding tax by the income payer, you are obliged to declare and pay at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
11 Freelance work with the withholding tax:

I am a natural person, resident in Kosovo who works from Kosovo for a foreign company in Germany and therefore all the services I offer are provided electronically. I get paid by the foreign company for the conducted work, and when I get paid, I am withheld by the income payer, in the amount of 15% of the gross amount. Am I obliged to declare and pay at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”?

As long as you are a resident of Kosovo and have realized income from the provision of services, which you have provided to a foreign company, even though your withholding tax has been withheld, you must declare at the end of the year with the form “PD- Annual declaration form and payment for Personal Income Tax”.

In the form you must include the income realized abroad, as well as deduct the tax paid in the other state, which tax can be deducted up to the maximum as long as the tax rates are applied according to the local legislation, which cannot be higher than 10% of the value of taxable income realized abroad.

12 Social media work:

I am a natural person, resident in Kosovo who realizes income from YouTube/Google/TikTok etc. Do I have to fill out the PD declaration and pay the tax?

As long as you have realized income which you have provided as an individual and you do not have a business registered in Kosovo, and for the realized income you have not been withheld the withholding tax by the income payer, you are obliged to declare and to pay at the end of the year with the form “PD-Form of annual declaration and payment for Personal Income Tax”.
Other income
13 I am an employee who realizes income only from Salaries, but I do not receive only one salary since I work for three employers, such as: employer “X”, “Y” and “Z”. All three employers withhold the withholding tax and pension contributions. At the employer “X” I am declared as Primary, while at the employers “Y” and “Z” I am declared as Secondary. Therefore, my question is whether I am obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? As long as you realize income only from Salaries, and you have been withheld the withholding tax from your Employers, such as: “X”-Primary, “Y”-Secondary and “Z”-Secondary, you are not obliged to declare at the end of year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
14 I am an employee who realizes income only from Salaries, but I do not receive only one salary since I work for three employers, such as: employer “A”, “B” and “C”. Two of the employers withhold the withholding tax and pension contributions. At the employer “A” I am declared as Primary, while at the employer “B” I am declared as Secondary. However, employer “C” did not withhold my withholding tax because he is exempt from the withholding tax. Therefore, my question is whether I am obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”?

 

As long as you realize income only from Salaries, and you have not been withheld the withholding tax by all of your Employers, such as: “A”-Primary, “B”-Secondary and “C”-Secondary, you are obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”. The form must include all of the income realized from Salaries from all of your employers, such as: “A”, “B” and “C”, as well as deduct the allowed deductions, i.e. withheld Pension Contributions in the name of employees, as well as to deduct the withholding tax from employers “A” and “B” based on withholding tax certificates provided by the employer. Then in the tax form “PD” will result in the obligation to pay Tax for the difference that has not been withheld by the employer “C”.
15 I am a retired individual who realizes income only from Pensions, i.e. payment of a pension from the Kosovo Pension Savings Fund, as well as an Old Age Pension from the Government. At the moment I receive my pension from the Kosovo Pension Savings Fund, my withholding tax on salaries is withheld, while for the pension from the Government I am not withheld a withholding tax at all. Therefore, my question is whether I am obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? As long as you realize income only from Pensions, i.e. payment of the pension from the Kosovo Pension Savings Fund, which withholds the withholding tax at the time of payment, as well as the Old Age Pension from the Government which pension is exempt from tax, you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
16 I am an individual who has term funds in the bank. I have a five years term. I receive interest income from the bank for the maturity made. The bank pays me the interest in each period, which it credits to my account, however, it withholds the withholding tax on interest in the amount of 10% of the interest amount. Therefore, my question is whether I am obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? As long as you realize income from bank interest, and you have been withheld the Withholding Tax from the interest payer, i.e. the bank, you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
17 I am an individual who has won a prize game from a market in Kosovo. More specifically I won a Golf 7 vehicle and I asked the vehicle donor if he paid any taxes for me for the gift won, who informed me that he did not pay anything, except that he registered the vehicle under his business expenses. Therefore, my question is whether I am obliged to declare and pay at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? As long as you have realized income from the Prize Games, and you have not been withheld the withholding tax by the vehicle donor, you are obliged to declare and pay at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”. The value of the vehicle won must be presented in the statement in the section “Gross income from winning the lottery”
18 I have realized income from salaries as well as income from rent. For the income from salaries, I was withheld the withholding tax by the employer, while for the income from rent, I paid tax every three months through the “IR” form. Am I obliged to declare and pay any tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? As long as you have realized income from salaries for which you have been withheld the withholding tax, as well as for the income from rent you have paid tax every three months through the “IR” form, you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
19 I am a shareholder in a LLC, from which in 2021 I realized income from Dividends in the amount of € 25,000 and no tax was withheld by the LLC for the funds transferred to my account. Am I obliged to declare and pay any tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? Income from Dividends is considered tax-exempt income and you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
20 I am an individual who has received income from the Government in the amount of € 10,000 because of the destruction or damage of my property due to floods. Am I obliged to declare and pay a tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? Income made due to the destruction or damage of property by floods is considered tax-exempt income. As long as they are tax-exempt income, you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
21 I am an individual who has received income from the life insurance policy of my ex-husband, who lost his life and was insured. The amount credited to my account by the Insurance Company is € 30,000. Am I obliged to declare and pay any tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? Income received from the life insurance policy paid as a result of the death of the insured person is considered tax-exempt income and as long as they are tax-exempt income, you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
22 I am an individual, i.e. an athlete in Kosovo, who has received income from the Government in the form of reward for my achievements in sports. The amount credited to my account is € 100,000. Am I obliged to declare and pay any tax at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”? Income received from the Government in the form of rewards for achievements in sports, is considered tax-exempt income. As long as they are tax-exempt income, you are not obliged to declare at the end of the year with the form “PD-Annual declaration and payment of Personal Income Tax Form”.
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