Simplified tax on small business profits

Businesses with an annual turnover of up to 8,000,000 lek are subject to simplified tax on small business profits. This applies to all taxpayers engaged in business activities.

Taxable income includes various revenue sources, such as sales of goods and services, participations, interest, and income from the use of both movable and immovable property, among others.

Taxable profit is calculated as the difference between total income during the tax period and known expenses. Known expenses are those documented for profit, security, and profit retention, following specified limitations.

The applicable tax rate for taxable profit in this category is 0% for businesses with an annual turnover ranging from 0 to 8 million lek.

Documentation requirements mandate the issuance of a simple tax invoice for each taxable buyer, and for individual final consumers, an invoice from a fiscal device. Other approved documents, like transport tickets and tax certificates, must also be justified.

Taxpayers are obligated to keep records, including a sales book for transactions with simple tax invoices, a purchases book for documented expenses, and a book for business assets.

For those registered for VAT, the books kept for VAT purposes also serve for simplified tax on small business profits.

Annual tax returns must be submitted by February 10 of the following year. These returns should provide a detailed breakdown of total income, deductible expenses, taxable profit, and tax payable. Additional details specified by the Minister of Finance for the submission process should also be included.