The good year for tourism in 2023, which led to an increase in the number of citizens who used apartments for short-term rent through AirBnB or Booking platforms, seems to have resulted in more benefits for landlords, but not for the state budget.

The official data of the General Directorate of Taxes, provided by SCAN, show that the tax collected from rents in 2023 amounted to about Lek 4.8 billion or Euro 46.2 million from nearly Lek 4.6 billion collected a year ago.

The difference is very low, adding here the fact that during 2023, the prices of long-term rents also experienced a significant increase mainly in the capital, but not only, which should bring higher income for the state budget.

Currently, only businesses and not individuals are required to declare the rental contract, making the lack of information high in this sector, except for short-term rentals which have been out of the attention of the tax administration.

But what is the tax rate that is paid on rent? According to the current law "on income tax", real estate rental income is treated as investment income and the tax applied at the source is 15 percent of the monthly rental value.

So if the rent is worth Lek 50,000 per month, the tax to be paid is Lek 7,500 per month. In the case where an individual has leased the property to a registered entity, the latter is responsible for withholding, declaring, and paying withholding tax on behalf of the tax authority.

The draft law on tourism recently approved by the government aims to provide a solution to informality as it forces accommodation structures to declare to the ministry the number of visitors, nights of stay, and their citizenship, otherwise, fines are foreseen.

As for individuals who issue short-term rental properties through the Booking and AirBnB platforms, they will have to obtain a categorization certificate from the Ministry of Tourism according to room, apartment, or villa standards and will pay tax obligations from this income once a year through personal income statement, without having to provide a tax registration number NIPT.

According to data made available last week by Tourism Minister MirelaKumbaro, the foreign tourist arrivals to Albania reached 970,000 in the first two months of 2024, an increase from 686,500 in the same period of 2023.

In February alone, foreign tourist arrivals surged 55% year-on-year, amounting to 480,500, according to a video posted by Kumbaro on social media.

In 2023, total tourist arrivals numbered 10.1 million, a 35% increase from the previous year, the tourism ministry said earlier.