Kosova’s tax system stands out for its low tax rates. Kosova’s corporate income tax rate is a flat 10%, making it significantly more competitive than many other European states. This low corporation tax rate is a major factor in luring businesses to Kosova and encouraging both domestic and foreign investment.
Kosova has introduced a simplified VAT system with a standard rate of 18%. However, it is vital to remember that VAT on exported goods and services is set at 0%, making Kosova a very competitive player in international trade. Kosova provides a lower VAT rate of 8% for essential products and services. This simplified VAT structure helps to create a transparent and business-friendly environment, improving the ease of doing business.
Kosova has been proactive in establishing double taxation treaties with other nations, thereby fostering international trade and investment. These treaties assist to prevent double taxation on the same income and provide tax relief through tax credits and exemptions.
Taxpayers in Kosova include corporations, business organizations, NGOs, and non-resident individuals with a permanent establishment in the country. Resident taxpayers are taxed on their Kosova and foreign income. Non-resident taxpayers are taxed on their Kosova income sources. Tax declarations and financial accounts must be submitted to the Tax Administration of Kosova (“TAK”) by March 31st of the following tax year.
Taxable individuals must register with the Tax Administration of Kosova (TAK) if their yearly turnover exceeds €30,000 in a calendar year. Registered entities are issued a registration certificate, which must be displayed at their place of operation. Individuals performing economic activity in numerous locations in Kosova are assigned a single VAT number. Partnerships and groups of people are allocated the same VAT registration number.
Entities that are not formed in Kosova must register for VAT when they begin operating in Kosova. To begin operations, the company must designate a tax representative and register under their name within five days after appointment. Non-Kosova entities that only provide products or services to VAT-registered entities in Kosova are exempt from registration.
For entities that are not required to register, voluntary registration with TAK is a possibility.
Customs tariffs in Kosova range between 0% and 10%. Imports from CEFTA (Central European Free Trade Agreement) countries are normally duty-free. Furthermore, beginning April 1, 2016, some agricultural, fish, and fishery products from the European Union have been exempt from customs taxes in Kosova.
Under the Turkey-Kosova Free Trade Agreement (FTA), several commodities already have lower customs tariffs. Kosova aims to eliminate all customs tariffs on FTA-specified goods within 9 years, beginning September 1, 2019. Countries without a free trade agreement with Kosova face a 10% customs charge on most commodities.
For Further information, visit Tax Administration of Kosova (TAK):
https://www.atk-ks.org/en/udhezues-manuale-dhe-rregullore/
For frequently asked questions regarding these topics, please see:
https://www.atk-ks.org/en/pyetje/