Loss Carry-forward

The Law on Corporate Income Tax provides for loss carry-forward for a period of up to six years.

Avoidance of Double Taxation

A resident taxpayer in Kosovo who earns income from business activities outside of Kosovo, and who pays tax on that income to other states shall, according to this Law, be allowed tax credit for the income tax paid to another state that is attributed to the income earned in that other state. The allowed tax credits shall be limited to the external tax amount paid on income earned outside of Kosovo, and shall not exceed the amount of compulsory taxation in Kosovo on that income. If the Kosovo taxation on that income exceeds the amount of taxation paid outside of Kosovo, the surplus amount must be included in the calculation of compulsory taxation in Kosovo.

Special Allowance for New Assets

If a taxpayer purchases any production lines for plants or machinery, locomotives or rolling stock used for rail transport, airplanes, ships, heavy machinery for transportation, equipment for soil transportation, bulldozers, excavating machines, or any other heavy machinery for the purposes of taxpayers' economic activities, a special deduction of 10% of the asset acquisition price is allowed in the year in which the asset is first put into service. This is provided in addition to the normal allowable depreciation deduction but only if the asset is new or for the first time placed into service in Kosovo. The deduction is not allowed if the asset is transferred from an existing business or a previous business in Kosovo.

Land

Municipalities in Kosovo are allowed to lease their movable and immovable property to foreign investors. The lease may be granted for a term of ten years, with an extension option of up to 99 years.

Low Operating Costs

One key advantage of the Kosovo workforce is low operating costs. Net monthly wages range between 350-400 Euros.