In a unanimous decision issued on June 27, 2024, the Constitutional Court of Albania ruled unconstitutional the 2023 law that imposed a 15% tax on freelancers. This decision is a significant victory for freelancers who have been protesting the new tax regime for months.
The Court's decision was based on the violation of two fundamental principles:
Principle of legal certainty: The law did not provide sufficient clarity and time for professionals to adapt, as the detailed list of services came into force just a few days before the law came into effect. This caused confusion and insecurity for freelancers, who did not have the necessary time to adapt to the new tax requirements.
Principle of proportionality: The Constitutional Court ruled that the 15% tax rate, combined with its immediate application, was not the most appropriate measure. There are other, alternative measures that could be applied, as is the case for other categories of taxpayers. The combination of a high tax rate and immediate application created an excessive burden on freelancers.
The 15% taxation is abolished, offering relief to freelancers who considered the measure unfair and unbearable.
The Constitutional Court left open the possibility of considering the repeal of other provisions of the law, if they are deemed unconstitutional.
The Albanian government must establish a new tax framework for the liberal professions, taking into account the Constitutional Court's decision. This means that alternative solutions that are fair and proportionate must be sought.
The possibility of freelancers being compensated for the period during which the 15% taxation was in effect is being considered, thus providing a form of justification for the burden they suffered.
