A new law implemented by the Albanian government in April will tax remote workers 15 percent of their earnings if they make less than $149,732 and 23 percent of their earnings for those that make more than this amount.
The new measure has caused a stir among digital nomads in the country, with hundreds of professionals revealing that they are considering emigrating or quitting their activity altogether due to high expenses, VisaGuide.World reports.
According to a study conducted by Monitor.al, 96 percent of the respondents said that the new measure would have a negative impact on their activity, compared to three percent that claimed they were not affected, another one per cent claimed the measure would not impact them or that it would have a positive effect.
Nearly a Quarter of Digital Nomads in Albania May Quit Their Business or Emigrate Following New Changes
The study, which received responses from 613 digital nomads in the country, revealed that the majority of them said they would raise their prices (38 percent) following the new changes, and some 25.6 percent said they would reduce their NET earnings, meaning cutting costs and allocating fewer resources for themselves.
The third most common answer of digital nomads in Albania was emigrating from the country, with Kosovo and Estonia being their top destinations, while some plan to quit altogether (17.5 percent).
A consular service provider said they were terminating their business in Albania and reopening in Kosovo, the neighbouring country, citing a convenient taxation system as the main reason.
I am planning to apply for a digital nomad visa in Estonia in order to take advantage of the zero-tax policy. I cannot pay €500 in taxes if my earnings reach €2,500. At least not in a country like Albania where taxes are being openly misused.
New Law to Affect the Quality of Services Offered by Digital Nomads in Albania
According to a marketing expert in Albania, there are three possible scenarios from the new developments, such as digital nomads raising their prices in order to afford taxes, or declaring more expenses and the third scenario includes quitting their activities altogether.
However, the consequences of the new measure will not be felt by the digital nomad community but by the whole country.
The consequences will be the most negative possible, closing many activities, reducing the number of businesses in the market, worsening the companies’ finances, laying off employees, and reducing the turnover as a result of closing businesses, a deterioration of the entire professional base in Albania, with the consequences of evasion and the decline of quality in all digital nomad services.
Some three percent of respondents claimed they would end their activity and work over the counter while one percent still hoped that the Constitutional Court would not approve the law.