Taxes
Rental income tax in Kosovo: who pays it
How rental income is taxed in Kosovo: withholding tax when the tenant is a business, quarterly filing by the landlord and short-term lets like Airbnb.
Andi B. · · 3 min read
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Rent is one of the most common sources of income in Kosovo: shops, apartments, offices, warehouses. The tax rules are simple, but they depend on one question: who pays the rent, a business or an individual?
When the tenant is a business
When a business (an LLC, an Individual Business or any other registered entity) pays rent to an individual, the business:
- withholds tax from the rent, currently 9%;
- pays the landlord the net rent;
- declares and pays the tax to ATK in the monthly EDI return.
The landlord doesn't have to pay that tax again; it has been paid on their behalf.
Example: the contract says €1,000 gross rent a month. The business withholds €90, pays the landlord €910 and pays ATK €90.
Write clearly in the contract whether the amount is gross or net. If it says "€1,000 net", the business must pay tax on a higher gross rent. More in Renting business premises.
When the tenant is an individual
When a family or student rents an apartment from an individual, nobody withholds tax. Then the landlord is the one who:
- declares the rental income, usually every quarter;
- pays the tax;
- includes it in the annual return by 31 March (see Annual tax return).
Many landlords don't. But ATK has more and more sources of information: notarised contracts, bank payments, address registrations. Unpaid tax plus interest and penalties over several years ends up far more expensive than paying regularly.
When the landlord is a business
When the owner is a registered business (for example an LLC that lets out space), rent is ordinary business income. There's no withholding; the business includes it in its income and pays tax on profit. If it's VAT-registered, rent on commercial premises is usually invoiced with VAT. See Corporate income tax.
Short-term lets and Airbnb
Apartments let by the night through Airbnb or Booking have grown fast in Prishtina, Prizren and Peja, especially in summer. Here the line between rental income and a business activity is blurrier:
- letting one apartment now and then is usually treated as rental income you declare yourself;
- letting several units continuously, with cleaning, check-in and linen, is often an accommodation business that needs business registration and sometimes notifying the municipality.
Platforms pay into bank accounts, and those payments can be traced. Ask an accountant before you grow. If turnover goes over €30,000, VAT registration follows too. See NUI, fiscal number and VAT.
Expenses for the landlord
For individuals, rental tax is usually charged on gross rent, with no deduction for expenses such as maintenance or depreciation. When the property is held in a business with full accounts, expenses are deductible, but business rules then apply.
Checklist
For businesses paying rent:
- a written contract, with the gross or net amount stated clearly;
- withholding tax deducted and declared every month;
- payment by bank transfer.
For landlords:
- declare rent from individuals every quarter;
- keep contracts and proof of payment;
- for regular short-term lets, check whether you need to register a business.
If you let business premises, you can check the tenant on Kerko before signing: the business's status, owners and age. See also How to verify a business.
Frequently asked questions
What is the rental income tax in Kosovo?
When a business pays rent to an individual, it withholds tax, currently 9% of the gross rent, and pays it to ATK. Check the current rate, because it can change by law.
Who pays the tax when the tenant is an individual?
The landlord declares and pays the tax on rental income themselves, usually every quarter, and includes it in the annual return.
Do I need to register a business for Airbnb?
Ongoing short-term letting, with services such as cleaning and check-in, is often treated as a business activity. Check with ATK or an accountant whether you need ARBK registration.
Is rent a deductible expense for a business?
Yes, rent for business premises is deductible when there's a contract and the withholding tax has been deducted and paid properly.
This article is for information only and is not tax advice. Rates and deadlines are set by the Law on Personal Income Tax and ATK guidance, and can change.
- Taxes
- ATK
