Kosovo offers a competitive tax system with low rates and specific incentives for investors.
Contents
Corporate Income Tax (CIT)
The standard CIT rate is a flat 10%.
- Dividends: Dividends paid or received are exempt from taxation.
- Loss Carry-forward: Tax losses can be carried forward for up to 4 years.
- Transfer Pricing: Rules based on OECD guidelines apply to transactions exceeding €300,000.
Value Added Tax (VAT)
- Standard Rate: 18%.
- Reduced Rate: 8% (for water, electricity, grains, dairy, textbooks, IT equipment, etc.).
- Exports: Rated at 0%.
- Threshold: Mandatory registration for annual turnover exceeding €30,000.
Personal Income Tax (PIT)
Progressive rates apply to wages:
- €0 – €960: 0%
- €961 – €3,000: 4%
- €3,001 – €5,400: 8%
- Over €5,400: 10%
Double Taxation Treaties
Kosovo has signed treaties with numerous countries including Germany, UK, Austria, and Turkey to prevent double taxation, often employing the credit method.