After the our article, which pointed out the uncertainties arising from the Tirana government's new tax rules on the taxation of pensions of Italian citizens residing in the Republic of Albania, consultations have intensified at various levels to shed light on an issue that disturbs-and not a little-the peace of mind of some 4,000 Italian pensioners.
Aldo Fontanarosa also wrote about it in the newspaper The Republic . And many pensioners, who were planning to move to Albania, now appear bewildered. We again urge the Albanian government to provide clarity as soon as possible. But while waiting for that to happen, we feel it is necessary to put a few things straight.
1) Never as in recent times have relations between Italy and Albania been friendly and inspired by esteem, mutual respect and a desire to intensify relations. After the important agreement on the totalization of social security contributions paid in the two countries by Italian and Albanian workers, in November the intergovernmental summit in Rome, organized with great commitment and efficiency by the Italian Embassy in Tirana, marked a historic turning point.
It is unthinkable that on the part of Albania there could be an act of impropriety toward Italians, a punitive intent toward pensioners .
Albania-let us remember-is the only country in the world that has granted, temporarily, a small piece of its territory to the sovereignty of Italy. This is the center of Gjader where Italian and not Albanian jurisdiction applies. Could such a friendly government ever perform hostile acts toward an important part of the Italian population residing in Albania?
2)Over the past two years numerous interviews and investigations in Italian and Albanian newspapers and TV , have dealt with the issue of zero taxation for Italian pensioners living in Albania. Particularly accurate and effective have been the reports by the influential journalist Artur Nura .
There was never a denial or correction from the Albanian government and tax authorities. No one ever reported to Italian and Albanian newspapers and TV, or even to tax advisors and patronages , that there had been a change in regulations and that this change could radically alter the taxation of Italian pensions in Albania. If a piece of information is given many times and for a long time and is never denied or corrected by the relevant authorities, that news must be considered well-founded and true.
3) Given the very good relations between Rome and Tirana, if the Albanian government wished to change any rules affecting Italian citizens residing in Albania it would certainly discuss it with the Italian government and everything would take place in the light of day and in the spirit of cooperation between the two countries and the two peoples. There is no record of any such interlocution.
4)The old tax law (8438 of 12/28/1998 as amended) defined pensions as exempt income and added a paragraph to Article 8 1/1 to make it explicit that this exemption was extended to “Income from pensions and other similar benefits of foreign nationals of Albanian origin or from European Union countries who hold residence permits in the Republic of Albania, as well as foreign nationals who have obtained Albanian citizenship and are residents of the Republic of Albania and who benefit from such income according to the legislation of the country where they receive the pension or other similar benefits.”
5)The new tax law (29/2023 as amended ) repealed the old legislation but confirmed in Article 11 paragraph 1 that pensions are exempt from personal income tax. It did not reproduce the aforementioned paragraph on pension income of foreign nationals.
6) The interpretative circular of the Albanian Revenue Agency (Udhëzim nr.26 08.09.2023. Për Tatimin mbi të Ardhurat i ndryshuar ) in all its versions, the latest of which is November 6, 2025, explained Article 11 paragraph 1 as follows:
“Income received as a result of compulsory social and health insurance means any individual income from payments made from the Social Security Fund and the Health Care Fund.
Payments made by the Social Security Fund include any kind of payment for old-age pension, disability, allowances, etc.”
7) According to some, this text refers only to Albanian pensions and excludes the pensions of citizens of countries, including Italy , who reside in Albania and who-so unlike Albanian pensions-would not be tax exempt.
8) The Bilateral convention between Italy and Albania against double taxation (signed on 12/12/1994, ratified by Law 175/1998 and in force since 12/21/1999) in Article 25 (Non-discrimination) provides in Paragraph 1 that:
“Nationals of a contracting state are not subject in the other state
Contracting State to any taxation or obligation relating thereto, other or more onerous than those to which nationals of that other State in the same situation are or may be subjected. This provision shall also apply, notwithstanding the provisions of Article 1, to persons who are not residents of one or both of the Contracting States.”
And in paragraph 5 he adds
“The provisions of this article apply, notwithstanding the provisions of Article 2, to taxes of all kinds and denominations“
The text seems very clear. In practice, an Italian citizen residing in Albania or an Italian company based and operating in the Albanian territory cannot be taxed more than Albanian citizens and companies in the same situation are taxed.And this also applies to pensioners
9)What would be the consequences of hypothetically taxing Italian pensions in Albania at 15%?
Almost all of the approximately 4,000 Italian pensioners would leave Albania but would not return to Italy.
Other states, EU states to boot, such as Slovakia and Hungary, offer zero taxation for foreign pensions. Croatia will probably do so as well starting in 2027. Neighboring Greece taxes at 7%.
So Italy would not benefit at all.
What about Albania? It is estimated that each year Italian pensions paid in Albania amount to about 200 million euros, almost 0.8% of Albania's GDP.
If all Italian pensioners stayed in Albania and paid the 15%, 30 million euros would enter the Albanian state coffers.
But this assumption is unrealistic.
While it is more realistic to quantify the damage Albania would suffer if almost all Italian pensioners left. Almost 200million euros would disappear from Albanian banks, which today are used to cover expenses for apartment rent, electricity and water utilities, ’food, transportation etc. Albania would lose a significant economic driver that has a multiplier effect on the local economy.
And there would also be moral injury.
After all, Italian pensioners have been welcomed with open arms and affection by the Albanian people. Friendly relations have been established and there are no reports of any particular friction or annoyance caused by the Italian pensioners to the communities and institutions of Albania.
From any point of view, a hypothetical taxation would be detrimental to all and would break the climate of mutual trust that has so far characterized relations between Italians and Albanians. Better to avoid it. Or is it?
10)In conclusion.If the failure to include the paragraph that was in the old tax law was an oversight, it can easily be remedied by reinserting it by a new decision of Parliament.
If, on the other hand, the Albanian government has decided to introduce taxation for pensions from other European countries some reflections and questions are necessary
When changing the rules of the game, all parties to the game must be involved, properly informed, and changes announced in good time. Portugal, when it decided to eliminate zero taxation for pensioners from other EU countries, informed a few years earlier of its desire to do so.
- Particularly ,since the largest number of European pensioners in Albania are Italians , given the excellent relations between our two countries, it would be normal to have a discussion and adequate information on this issue with our associations and patronages that follow the practices of pensioners.On pensions the two governments dealt at length during 2024 to introduce the new rules on totalization. If there was a will to change the law perhaps in those meetings it could also be mentioned
-From January 1, 2024, neither tax agencies, nor Albanian accountants, nor Albanian newspapers and TV stations, nor patronati informed Italian pensioners about these changes. If they did not know either, why should Italian pensioners know?
-Italian pensioners acted in good faith and on the basis of the information they were given in the years 2024 and 2025. They cannot be considered as evaders of any taxes related to tax years 2024 and 2025
-For fiscal year 2026, a formal clarification could have been provided before the end of 2025 to allow retirees to be able to make their assessments in time
If, in spite of all the considerations, including economic ones, that we have outlined, the Albanian government really wants to impose a taxation on Italian pensions, it could give 3 years' notice and allow Italian pensioners to be able to make in time the choices best suited to their needs.
We are confident that a friendly parliament and government and, in particular, Prime Minister Edi Rama who is a wise person, will understand all this and be able to take decisions that will protect Albania's interests and not harm Italian pensioners.
Italian 
Albanian 
English