8% on Dividends. That's the Entire Standard Rate.
When an Albanian company distributes profit to its shareholders, a flat 8% withholding tax applies to the dividend — a separate tax from whatever rate the company paid on its profits in the first place. It's a single, predictable number, not a sliding scale, and it applies the same way whether the shareholder is an individual or a company.
This is worth knowing before you register, not after your first payout: the 8% is withheld by the company and paid to the tax authority directly, so what actually lands in your account is already net of tax. No separate filing on your end for the withholding itself — it's handled at the source.
This Is the Number That Actually Matters: What You Keep, Not the Rate on Paper.
Corporate tax and dividend tax are two separate lines, and they only apply in sequence. A company under the 14,000,000 ALL revenue threshold pays 0% corporate tax on its profits — retained earnings sit untaxed. The 8% only applies at the moment profit is actually distributed as a dividend to you. Keep the profit in the company, and there's nothing to withhold yet.
Above the revenue threshold, the sequence is the same, just with corporate tax applied first at the standard rate, then 8% on whatever is distributed afterward. Either way, the two numbers compound rather than stack independently — which is exactly why founders ask us to model the real, all-in figure rather than quoting the headline rates in isolation.
The 8% Isn't Always the Final Number.
Albania has over 40 double tax treaties currently in force. Depending on the treaty with your home country and how much of the paying company you own, the dividend withholding rate can drop to 5%, or to 0% for shareholders holding a substantial stake in the company. This isn't a loophole — it's a standard treaty mechanism designed to prevent the same income from being taxed twice, once in Albania and again where the shareholder is resident.
Whether you qualify, and at what rate, depends on the specific treaty text and your ownership structure — details worth getting right before your first distribution, not after. We check the applicable treaty for your situation as part of your free consultation.
Salary or Dividends? The Right Split Depends on Your Numbers.
If you're both the owner and director of your Albanian company, you have a choice most employees don't: how much to pay yourself as salary versus dividends. Salary is a deductible business expense that reduces taxable profit, but it's subject to personal income tax and social contributions. Dividends, by contrast, are taxed at the flat 8% rate after any applicable corporate tax — with no social contributions on top.
There isn't a single right answer — it depends on your revenue level, your personal circumstances, and how much you need to draw versus reinvest. This is exactly the kind of modeling we do as part of setting up your company, so the structure is efficient from your very first payout rather than something to fix later.
What Founders Ask Us About
Dividend Tax in Albania
The standard dividend withholding tax rate in Albania is 8%, applied when a company distributes profits to its shareholders. This is separate from the corporate tax rate applied to the company's profits itself.
Some jurisdictions offer 0% dividend tax under specific conditions, but this is not the general rule in most countries, including Albania. Albania applies an 8% standard rate, though this can be reduced to 5% or 0% under double tax treaties for qualifying substantial shareholdings.
Yes. Albania has signed over 40 double tax treaties currently in force. Depending on the treaty and the shareholder's level of ownership, the dividend withholding tax can be reduced to 5%, or to 0% for companies holding a substantial stake in the paying company.
A company under the 14,000,000 ALL revenue threshold pays 0% corporate tax on profits, then 8% withholding tax only when those profits are distributed as dividends — meaning retained earnings stay untaxed, and the 8% applies only to what shareholders actually take out.
It depends on your revenue level and personal tax situation. Salary is a deductible business expense but is subject to personal income tax and social contributions, while dividends are taxed at a flat 8% after any applicable corporate tax. We model the most efficient structure for your specific numbers in your free consultation.
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Real, After-Tax Payout?
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