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Who benefits from the 100 thousand lek discount for children's education and how is it documented?

2025-06-08 10:22:00Biznes SHKRUAR NGA REDAKSIA VOX
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The General Directorate of Taxes explains in a statement to Monitor who benefits from the deduction of 100 thousand lek for children's education expenses, the necessary documentation that must be kept to justify them, and the deadline for receiving compensation in cases of credit excess.

What are the legal requirements for benefiting from expenses of 100 thousand lek for children's education?

In Law No. 29/2023 "On Income Tax", amended Article 22 "Deductions from the Tax Base", point 2, it is determined that the personal income tax taxpayer with annual taxable income from employment and/or annual taxable income from business less than 1,200,000 lek may deduct, in addition to the individual amounts according to point 1 of this article, current expenses for the education of children in his care, in the maximum amount of 100,000 lek.

The request for deduction from the tax base related to education expenses is made by the family member with the highest annual taxable income, through the annual income declaration.

What types of receipts are included in the supporting documentation for children's education? Would it be necessary to expand the categories of recognized expenses (e.g. extracurricular courses, cost of books or technological equipment for learning)?

In point 23.1 of instruction no. 26, dated 08.09.2023 "On income tax", as amended, the nature of expenses that benefit from deductions for education, contracts with educational institutions and payment documents for children or documents for payments for foreign language courses, etc. are defined.

Regarding expanding the scope of these expenses, it may be considered in the future.

Is there a standardized way to submit or upload invoices to the DIVA platform for the purpose of deducting education expenses?

The individual taxpayer declaring DIVA must only submit the annual tax return and must have the documentation confirming the data he has declared available to the tax administration, in case of request from the administration.

How long should invoices stored by individuals be kept in case of an audit by the tax administration?

The document that will be kept and that justifies the declaration in the annual Individual Declaration is defined in point 23.1 of instruction no. 26, dated 08.09.2023 "On Income Tax", as amended, and is the contract with educational institutions and payment documents for children or even documents for payments for foreign language courses, etc.

The period of retention of documentation is defined in Law 9920, dated 19.08.2008 “On Tax Procedures in the Republic of Albania”, as amended, Article 48 “Maintenance and Preservation of Tax Data Documents”, point 2. The period is at least 5 years starting from the end of the tax year to which the documents belong.

Is there a risk of penalties if the individual does not have the supporting documentation?

If the declaring individual does not have documentation that justifies the deduction for education and in the event of an audit, the declaration will be considered incorrect, then the declaring individual will be penalized in reference to the provisions of Law No. 9920, dated 19.08.2008 “On Tax Procedures in the Republic of Albania”, as amended.

Can the benefit be explained with a practical example, for a family with 2 children under 18 years of age with an income of less than 1.2 million lek per year and over 1.2 million lek per year?  

First, an individual with personal income from employment and/or business of more than 1,200,000 lek per year does not benefit from deductions for education expenses.

Example: Individual X has an income from employment of 70,000 lek per month or 840,000 lek per year.

The tax paid each month is (70,000 – 30,000)*13% = 5,200 lek and 62,400 lek per year.

To benefit from the deductions for children's education, the individual must complete and submit the personal income declaration by March 31 of the following year (the starting year for benefiting from the deductions for education and the child allowance is 2025), i.e. by March 31, 2026.

The maximum amount that can be deducted for education is 100,000 lek, regardless of the number of children under 18 years of age.

(840,000 – 100,000)/12 = 61,667 lek/month. Tax 4,117 lek (annual 49,400 lek).

The individual will result in an individual Income Tax Return with a credit balance of 13,000 lek (rounded).

This credit status is requested within a period of 3 months from the date of submission of the Individual Personal Income Tax Return.

Does the automatic calculation of the deduction occur in the system, or is it the individual's responsibility to calculate the deductible amount?

The declaring individual himself will enter the amount of the deduction in the relevant section of DIVA, as it is his responsibility.

The individual must meet the conditions set out in Article 22 to benefit from the tax deduction, both in the case of compensation for dependent children up to the age of 18, and in the case of education expenses.


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