From March 2026, all families with children under the age of 18 will benefit from compensation for upbringing and educational expenses. The government has promoted a new fiscal scheme, through the reimbursement of income tax. Essentially, the measure provides for the deduction of expenses for the care and education of children from the annual tax base, through the completion of the Individual Income Tax Declaration, DIVA.
The new Law “On Income Tax” provides for a deduction of expenses of 48 thousand lek per year for each dependent child for individuals with annual income over 1.2 million lek per year and a deduction of expenses for children’s education worth 100 thousand lek for individuals with income up to 1.2 million lek per year. These amounts do not represent direct payments to families, but are used to reduce the taxable base and, consequently, the recalculated tax.
In practice, this means that the benefit is not the same for everyone and that informal workers remain completely outside the scheme, despite the real expenses they incur for raising and educating children.
Another problematic element is the fact that in a married couple, the right to deduct expenses belongs only to the parent with the highest annual income. Meanwhile, the process to benefit from the reimbursement is not automatic. Although individuals with incomes below 1.2 million lek are not legally obliged to complete the DIVA, they must submit the declaration voluntarily if they want to benefit from the deductions. Only if the DIVA results in an overpayment, is there an opportunity to open a reimbursement request in the e-filing system. This request is accompanied by the obligation to upload the family certificate, bank account details and supporting documentation proving the expenses incurred for the children's education.
Documentation is one of the biggest obstacles. Without contracts with educational institutions and without tax invoices or bank payment documents, expenses are not recognized for reimbursement. In the Albanian reality, where many private courses, kindergartens or extracurricular lessons still operate without invoices, a large part of parents do not have evidence that justifies the expense.
How will the tax be recalculated, after deducting expenses for children?
The example published by the General Directorate of Taxes shows that an individual with a monthly salary of 70 thousand lek and two dependent children can benefit from a refund of about 33 thousand lek per year. However, in this case it is assumed that we are dealing with a complete declaration of income, regular documentation of expenses and sufficient knowledge of tax procedures. This amount is due to request for refund within 3 months, after completing the DIVA.
For many families, especially those in rural areas, this process remains complicated and not very accessible. In conclusion, although the new reimbursement scheme for dependent children is presented as a step towards supporting the family, the way it is implemented shows that not everyone can benefit from it./acqj.al
