Starting in March 2026, Albanian families with children under the age of 18 will benefit from a new tax compensation measure aimed at easing the financial burden of raising and educating children. The initiative is expected to support thousands of households at a time when living and education costs continue to place pressure on family budgets.
Who Can Benefit from the Tax Compensation
The measure follows amendments to the income tax law and will apply during the submission of the Individual Income Declaration (DIVA) for the 2025 fiscal year. Parents are required to submit this declaration in March 2026, at which point the new deductions will be taken into account.
Child-Related Tax Deduction Explained
According to the updated legislation, each parent with dependent children under the age of 18 will be entitled to deduct 48,000 lekë per child from their taxable income.
This deduction is not paid upfront but is instead used to recalculate the income tax already paid during the 2025 calendar year. If the recalculation shows that a parent has paid more tax than required, they will be eligible to request a refund for the difference.
Education Expenses Also Included
In addition to the child-related deduction, the law introduces further tax relief for education expenses. Families with an annual income of up to 1.2 million lekë will be able to deduct education-related costs of up to 100,000 lekë per year. These expenses may include school fees and other qualifying education payments, provided that parents keep official documentation and submit it as proof when filing their income declaration.
The tax compensation applies to all parents who are required to file an income declaration, regardless of whether they were employed for the entire year or only part of it. In households with two parents, the deduction for dependent children will be applied to the parent with the higher income, in line with existing tax rules.
Tax authorities have emphasised the importance of keeping accurate records throughout the year, especially for education-related payments. Proper documentation will be necessary to benefit fully from the deductions and to avoid delays or issues when requesting potential tax refunds.
All in All
The measure is part of broader efforts to provide financial support to families, encourage transparency in income declarations, and promote investment in children’s education. The changes were reported by Euronews Albania and are expected to come into effect with the 2025 income declaration cycle.
Source: Euronews
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