Taxes
The 3% and 9% tax for small businesses
How Kosovo's simplified turnover tax works for businesses up to €30,000: who pays 3%, who pays 9%, quarterly deadlines and when you move to VAT.
Andi B. · · 3 min read
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Most businesses in Kosovo are small: a corner shop, a hairdresser, a programmer working from home, a taxi driver. For them the law offers a simpler way to pay tax: instead of calculating profit, they pay a small percentage of turnover, meaning everything they sell.
Who can use it
The simplified tax is available to businesses that:
- have annual turnover up to €30,000;
- are not registered for VAT;
- don't voluntarily choose full accounts.
It's mainly used by Individual Businesses, but also by small companies with turnover below the threshold.
3% or 9%?
The rate depends on the activity:
| Rate | Activities | Examples |
|---|---|---|
| 3% | Trade, transport, agriculture and similar | Grocery shop, kiosk, taxi, farm, online shop |
| 9% | Services, professional activities, crafts, entertainment | Hairdresser, consultant, programmer, designer, lawyer, café service |
The logic: in trade, most of the sale price is the cost of goods, so the rate is low. In services, most of it is your own work, so the rate is higher.
The NACE codes you choose in ARBK affect which category you fall into. See NACE codes.
Example
A small shop sells €6,000 in a quarter. The tax is 3% × €6,000 = €180.
A freelance programmer earns €6,000 in a quarter. The tax is 9% × €6,000 = €540.
If quarterly turnover is very low, the quarterly minimum set by law applies.
Deadlines
The tax is declared and paid every quarter in EDI, usually by the 15th of the month after the quarter:
- 15 April (January to March);
- 15 July (April to June);
- 15 October (July to September);
- 15 January (October to December).
How EDI works is explained in Filing taxes in EDI.
Advantages and limits
Advantages:
- you don't have to calculate profit;
- bookkeeping is simpler;
- you know in advance how much tax you pay on every euro of sales.
Limits:
- expenses are not deductible. If you have high costs (rent, materials), you may pay more than with tax on profit;
- you can't reclaim VAT on purchases, because you're not in VAT;
- large clients sometimes prefer VAT-registered suppliers.
If your expenses are more than half your turnover, ask your accountant whether full accounts are worth it. See Tax-deductible expenses.
When you pass €30,000
When annual turnover goes over €30,000:
- you must register for VAT (see NUI, fiscal number and VAT);
- you move to tax on real profit, with full accounts;
- your invoices must show VAT (see What an invoice must contain).
Track turnover month by month. Registering for VAT late brings a fine and VAT to pay even on sales where you didn't collect it from the customer.
Fiscal receipts and the simplified tax
The simplified tax doesn't exempt you from fiscalisation. If you sell directly to consumers, a fiscal receipt must be issued for every sale. See Fiscalisation in Kosovo.
Frequently asked questions
Who pays the 3% tax in Kosovo?
Small businesses with annual turnover up to €30,000 in trade, transport, agriculture and similar activities, when they don't keep full accounts.
Who pays the 9% tax?
Small businesses with turnover up to €30,000 that provide services, professional activities, crafts or entertainment, such as consultants, hairdressers, programmers and lawyers.
What is the minimum tax per quarter?
Even when turnover is low, the simplified tax has a quarterly minimum, which has been €37.50. Check the current amount with ATK.
What happens when I pass the €30,000 threshold?
The business must register for VAT and moves to tax on real profit, with full accounts.
This article is for information only and is not tax advice. Rates, thresholds and minimums are set by tax law and ATK guidance and can change.
- Taxes
- Individual business
