Taxes for US Expats in Albania: What You Really Need to Know

Living in Albania is increasingly appealing for US expats. Lower living costs, a relaxed pace of life, and a growing international community.

But once you settle in, one question comes up quickly: how do taxes work when you’re an American living in Albania?

The short answer is that you may have tax obligations in both countries, and understanding how residency, income, and reporting rules interact is the go-to for a stress-free journey.

Who Has to File Taxes in Albania?

In Albania, tax obligations depend primarily on tax residency status.

You are generally considered an Albanian tax resident if at least one of the following applies:

• You spend 183 days or more in Albania within a 12-month period
• You have a permanent home available in Albania

If you qualify as a resident, Albania taxes you on your worldwide income.
If you are a non-resident, you are taxed only on income earned in Albania.

(Source: Albanian General Directorate of Taxation; Greenback Expat Tax Services)

Income Tax Rates in Albania (Overview)

Albania applies a progressive income tax system for individuals.

In practice:

• Lower monthly incomes may be taxed at 0%
• Middle brackets are taxed at 13%
• Higher income brackets are taxed at up to 23%

Tax returns are typically filed annually, with deadlines falling in March or April, depending on the income type.

(Source: Greenback Expat Tax Services; Albanian tax regulations)

Do US Expats Have to File US Taxes While Living in Albania?

Yes.
The United States taxes its citizens on worldwide income, regardless of where they live.

This means that even if you live full-time in Albania, you are still required to:

• File IRS Form 1040 annually
• Report foreign income, bank accounts, and assets when thresholds are met

Living abroad does not remove US filing obligations.

(Source: Internal Revenue Service – IRS)

Is There a Tax Treaty Between the US and Albania?

No.
Albania does not have a bilateral tax treaty with the United States.

As of April 2023, Albania has signed double taxation treaties with 43 countries, but the US is not one of them.

This does not automatically mean double taxation, but it does mean that careful planning is significant.

(Source: US Department of State; Albanian Ministry of Finance)

How US Expats Reduce Double Taxation

Even without a tax treaty, US expats in Albania can often reduce or eliminate double taxation through existing US tax provisions.

Common tools include:

Foreign Earned Income Exclusion (FEIE)

Allows eligible expats to exclude a portion of foreign-earned income from US taxation, provided they meet residency or physical presence tests.

Foreign Tax Credit (FTC)

Allows you to offset US tax liability by claiming credits for income taxes paid in Albania.

Foreign Housing Exclusion

Available in some cases for qualifying housing expenses when combined with FEIE.

Each option depends heavily on your income type, residency status, and filing structure.

(Source: IRS; Greenback Expat Tax Services)

Other Taxes US Expats Should Be Aware Of in Albania

Depending on your situation, you may also encounter:

• Self-employment tax, if you operate independently in Albania
• Corporate income tax, if you run a business (standard rate 15%, with reduced rates for certain sectors)
• VAT (Value Added Tax) at 20% on goods and services
• Property tax, if you own real estate
• Social security contributions, if employed locally

Not every expat will be subject to all of these, but they are important to understand early.

(Source: Albanian tax authorities; US Department of State)

Common Mistakes US Expats Make

Some of the most frequent issues we see include:

• Assuming Albania’s low taxes mean no US filing is required
• Missing reporting obligations for foreign bank accounts (FBAR, FATCA)
• Becoming an Albanian tax resident unintentionally
• Filing late or inconsistently between jurisdictions

These mistakes are usually unintentional and avoidable with proper guidance.

Final Thoughts

Living in Albania as a US expat can be financially rewarding, but taxes require careful attention.

Getting clarity early helps you avoid penalties, reduce tax exposure, and focus on building your life abroad with confidence.

If your situation involves multiple income streams, property, or long-term residence plans, professional advice is strongly recommended.