The tax policy in Kosovo is oriented towards simple regulations that ensure broad tax basis and prevent tax evasion.
Taxes differ based on type of business and annual turnover.
The tax administration applies three main tax regimens:
- Value Added Tax (VAT)
- Corporate Income Tax (CIT)
- Personal Income Tax (PIT)
Value Added Tax (VAT)
The main tax in Kosovo is the Value Added Tax VAT which is paid for goods and services. The fixed rate of this tax is 16% for all goods and regardless of their origin and of 0% for goods dedicated for export. Businesses that have annual turnover of 50000 € must register for VAT.
In terms of import the period for VAT payment is 6 months and it is collected at administrative borders of Kosovo.
Corporate Income Tax
This tax is paid every three months depending on the annual turnover. The corporate tax rate for annual turnover over 50,000€ is 10%.
Personal Income Tax
This type of tax is applied on incomes from wages, business, rent, interest, real estate, etc. Tax rates for personal income from wages are normally progressive based on the level of earned salary and lower rates in the region and countries of EU.
The tax rates are:
- 0% up to 960 euros/year
- 4% from 960 to 3000 euros/year
- 8% between 3001 and 5400 euros/year
- 10% over 5400 euros/year
Kosovo Pension Savings Fund is responsible for administering and managing the individual pension saving accounts.
This tax obliges the employee and the employer to contribute in financing the employee’s pension at the rate of 5% from the employee’s salary and 5% from the employer.