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The Law on Personal Income Tax is Amended

The Personal Income Tax system in the territory of Kosovo is regulated since 2015 through Law No. 05/L -028 on Personal Income Tax (“LTAP”). This law defines taxpayers, the object of taxation, taxable income and all other vital aspects for the personal income tax system.

On August 23, 2024, Law No. 08/L-142 on Amending and Supplementing the Laws Determining the Amount of the Minimum Wage Benefit, Minimum Wage Determination Procedures and Annual Personal Income Tax Scales (“New Law”).

The new law changes one of the key aspects of the personal income tax system, namely the tax rates. Until the entry into force of the New Law, the annual personal income is charged by Article 6 of the LTAP as follows:

  1. For taxable income nine hundred sixty (960) Euro or less, zero percent (0%);
  2. For taxable income over nine hundred sixty (960) Euro up to three thousand (3000) Euro including the amount of three thousand (3000) Euro, four percent (4%) of the amount over nine hundred sixty (960) Euro;
  3. For taxable income over three thousand (3.000) euro up to five thousand four hundred (5.400) euro, including the amount of five thousand four hundred (5.400) euro, eighty one point six (81.6) plus eight percent (8%) of the amount over three thousand (3.000) euro; and
  4. For taxable income over five thousand four hundred (5.400) euro, two hundred seventy three point six (273.6) euro plus ten percent (10%) of the amount over five thousand four hundred (5.400) euro.

Starting from August 23, 2024, the annual personal income will be charged as follows:

  1. For taxable income up to three thousand euros (3,000 €), including the amount of three thousand euros (3,000€), zero percent (0%);
  2. For taxable income over three thousand euros (3,000€), up to five thousand four hundred (5,400€), including the amount of five thousand four hundred (5,400€), eight percent (8%) of the amount over three thousand euros (3,000€); and
  3. For taxable income over five thousand four hundred (5,400), one hundred ninety two euros (192€) plus ten percent (10%) of the amount over five thousand four hundred (5,400€).

In implementation of the new tax scales derived from the New Law, the Tax Administration of Kosovo will publish the relevant updates in the electronic EDI system for the declaration and payment of personal income taxes no later than September 1, 2024.