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A new declaration form is not made; from January 1, 2024, the self-employed of free professions will use the existing ones

2023-12-18 14:21:41Biznes SHKRUAR NGA REDAKSIA VOX

A new declaration form is not made; from January 1, 2024, the self-employed of

Even before its implementation has started, the government has changed the new law "On income tax", starting from January 1, 2024 with the self-employed in free professions. In the last Official Gazette, the normative act for some additions and changes to the new law, which comes into force immediately, has been published.

The Normative Act determines that the declaration of income will be made according to the model of the old forms, i.e. the existing ones, but according to the new tax rates that start implementation from January 1, 2024 with the self-employed of free professions.

The normative act also postpones the terms of entry into force of point 1 for articles 22, 23 and 24, which include the deduction of expenses only for the self-employed of free professions when up to 90% of the gross income is provided by less than 3 clients, including the deduction for children's expenses. The changes will come into effect on January 1, 2025.

The deadline for the implementation of the progressive tax rate for taxable income from employment is also postponed. Specifically, point 1 of article 24, which determines the 23% tax for employment income over ALL 2,040,000 per year, will start implementation from January 1, 2025.

Accountants raised several times the concern about the lack of making available to businesses from taxes the new forms that must be filled by the subjects for the declaration of payment of income tax and withholding tax. While another obstacle for the implementation of the law, according to them, is the lack of an approved list of free professions that would change taxation with the new law.

Regarding the problem of not issuing new forms, for the declaration of income, the Normative Act determines that businesses registered before December 31, 2023 for the declaration of income tax for the effect of the tax period of 2024 will use the forms according to the approved law in 1998 "On income tax".

"All taxpayers, registered before December 31, 2023, who are subject to simplified income tax or profit tax, as well as those who register for the first time in the following year, for the effect of the 2024 tax period, will to use forms and tax responsibilities, according to law no. 9632, dated 30.10.2006, "On the local tax system", as amended, as well as the law no. 8438, dated 28.12.1998, "On income tax", amended", cited in the Normative Act.

Even the withholding tax declaration will be applied starting from the January 2025 tax period with the new forms. For the year 2024, the normative act determines that the withholding tax declaration will be used according to the existing model of the forms.

The types of payments for which withholding tax is withheld include payments for interest from banks and other financial institutions, payments from royalties, from the rent of individuals, for any payment benefited from gambling and casinos, payment for the performance of musicians in concerts etc.

The normative act also states that for the prepayments, determined according to the new law for the categories of persons, who supply professional services and are subject to income tax from January 1, 2024, exceptionally for the year 2024, they are calculated based on the tax declarations of simplified on the profit and tax on the profit of the previous years, applying the tax rates provided in this law.

Accountants from the Institute of Chartered Accountants (IKM) and members of the National Chamber of Advocates have previously claimed that the new law is illegal, creates inequality between taxpayers and encourages evasion. Both of these associations are expected to appeal to the Constitutional Court to overturn the new law.

The Law "On Income Tax" starts implementation from January 1, 2024. The law defines two implementation deadlines. For the self-employed of the free professions, the progressive tax from 15% to 23% will start to be implemented from January 1, 2024, while for small business (including the self-employed categories) the effects of the law will start to apply from January 1, 2029.

Through the law "On income tax" self-employed people of free professions will no longer be treated as a small business with 0%, but the net income (profit) from the business, after deductible expenses, the self-employed will be taxed at the rates 15% for the range from 0 to 14,000,000 ALL and above 14,000,000 ALL, 23% profit tax is imposed.

Normative Act

Normative act no. 7, dated 14.12.2023 for some additions and changes in law no. 29/2023, "On income tax", amended

In support of Article 101 of the Constitution, with the proposal of the Minister of Finance and Economy, the Council of Ministers DECIDED: In the law no. 29/2023, "On income tax", as amended, the following changes and additions are made:

Article 1

In point 1, of article 65, the words "... and no later than the 20th of the month that follows each 3-month period for self-employed individuals or commercial individuals." are replaced by "... and self-employed individuals or commercial individuals registered for VAT, and no later than the 20th of the month that follows each 3-month period for self-employed individuals or commercial individuals, who are not registered for VAT- in.".

Article 2

In Article 69, the following additions and changes are made: 1. After the letter "dh", the letters "e", "ë" and "f" are added, with the following content:

"e) For all taxpayers, registered before December 31, 2023, who are subject to simplified income tax or profit tax, as well as for those who register for the first time in the following year, for the effect of the tax period 2024, the forms and tax responsibilities will be used, according to law no. 9632, dated 30.10.2006, "On the local tax system", as amended, as well as the law no. 8438, dated 28.12.1998, "On income tax", amended;

ë) Prepayments, according to Article 63 of this law, for the categories of persons who provide professional services and are subject to income tax from January 1, 2024, except for the year 2024, are calculated based on the simplified tax declarations on the profit and the tax on the profit of the previous years, applying the tax rates provided in this law;

f) The withholding tax declaration, according to Article 57, of this law, will be applied starting from the tax period January 2025. For the year 2024, the declaration according to the existing model will be used. 2. In point 2, the words "... until December 31, 2023..." are replaced by "... until December 31, 2024...". 3. In point 5, at the end of the sentence, the words "... , with the exception of the letters "e", "ë" and "f" of this article are added, the implementation of which will be done according to the provisions of law no. 8438, dated 28.12.1998, "On income tax", amended, until the period of December 2024".

Article 3

In Article 72, after the words "... 1 January 2024, with the exception of ..." the words "... articles 22, 23, 24, point 1, which extend the effects from 1 January 2025, ..." are added.

Article 4

This normative act enters into force immediately and is published in the Official Journal.

The normative act postpones the terms of entry into force of point 1 for articles 22, 23 and 24

Article 22

Deductions from the tax base

The taxpayer of personal income with income from employment and/or business can deduct from the tax base for the tax period: a) an amount of 600,000 ALL if the annual income is up to 600,000 ALL, or an amount of 50,000 ALL per month if the monthly income is up to ALL 50,000; b) an amount of 420,000 ALL if the annual income is over 600,000 ALL to 720,000 ALL, or an amount of 35,000 ALL per month if the monthly income is over 50,000 ALL to 60,000 ALL; c) an amount of 360,000 ALL if the annual income is over 720,000 ALL, or an amount of 30,000 ALL per month if the monthly income is over 60,000 ALL; ç) an amount of compensation for each dependent child under 18 years of age of 48,000 ALL.

Article 23

Discount request

Dependent child allowance and education expenses are claimed by the family member with the highest annual taxable income. The detailed procedures for the implementation of this article are determined by the instructions of the minister responsible for finance.

Article 24

Tax rate

Taxable income from employment is taxed at the following progressive rates: Annual tax base Tax rate 0 - 2,040,000 ALL 13% Over 2,040,000 ALL 23%.


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