Albania Tax Rates 2026

Albania Tax System 2026: Overview

Albania operates one of the most straightforward tax architectures in the Balkans. Corporate profits face a single flat rate, the value added tax regime works with a short exemption list, and the burden on distributed profit sits clearly below the European average. The backbone of the system is Law no. 29/2023 on Income Tax, in force since 1 January 2024, which repealed the 1998 framework and brought corporate and individual taxation into one statute.

Three institutions drive day-to-day compliance: the General Directorate of Taxation, which handles filing and collection; the National Business Centre (QKB), which registers companies; and the Social Insurance Institute, which administers contributions. A tax identification number (NIPT) is issued automatically on incorporation, so no separate tax office registration is required.

Resident entities are taxed on worldwide income, while non-residents are taxed only on Albanian-sourced income. Residence is established through a registered seat or a place of effective management in Albania. The country has 46 signed double tax treaties, 42 of which are in force, including agreements with Turkey and Germany.

Albania Tax Rates 2026 Summary Table

The infographic below shows the core tax items a company operating in Albania will encounter. Amounts are stated in Albanian lek (ALL).

Albania Corporate Income Tax Rate

Standard Rate: 15%

All legal entities, including limited liability companies (Sh.p.k.) and joint stock companies (Sh.a.), pay 15% corporate income tax on taxable profit. The base is derived from accounting profit by adding back non-deductible expenses and removing exempt income. Depreciation, payroll, rent and financing costs are deductible when properly documented, while thin capitalisation rules disallow interest above the statutory debt-to-equity ratio.

The 0% Regime Below ALL 14 Million

Law no. 29/2023 sets the income tax rate at 0% until 31 December 2029 for commercial individuals and self-employed persons whose annual gross income does not exceed ALL 14,000,000. Business income above that threshold is taxed at 23%. One point is frequently misread: the zero rate applies to individual businesses, not to limited liability companies. An Sh.p.k. below the threshold still pays 15%. Because the legal form itself determines the rate, this decision belongs at the very start of the setup process.

Activities Taxed at the Reduced 5% Rate

Entities certified as agricultural cooperation companies or agritourism operators pay 5% corporate income tax until 31 December 2029. The 5% rate previously available to software production and development companies ended on 31 December 2025, so those businesses fall under the standard 15% rate from 2026 onward. Eligibility depends on certification being approved by the relevant ministry.

Municipal Income Tax

Separately from corporate income tax, a local income tax ranging from ALL 20,000 to ALL 550,000 applies depending on activity type, municipality and annual turnover. In larger municipalities such as Tirana this item sits near the upper band and should be built into the operating budget.

Albania VAT Rates (TVSH)

The standard VAT rate is 20%. Reduced rates fall into two bands: 6% for accommodation services, agritourism, advertising services, supply of books and electric buses, and 10% for agricultural inputs. Exports, international transport and supplies of gold to the Bank of Albania are zero-rated, which means input VAT remains recoverable.

Registration Threshold and Process

VAT registration is mandatory for businesses whose annual turnover exceeds ALL 10,000,000, and the application must be filed shortly after the threshold is crossed. Businesses below the threshold may register voluntarily in order to deduct input VAT. For export-driven models, voluntary registration is usually advantageous because it opens access to the refund mechanism. Returns and payments run on a monthly cycle through the electronic invoicing (fiscalisation) platform.

Albania Personal Income Tax Rates

Employment income has followed a two-band schedule since 1 January 2025: 13% on an annual base up to ALL 2,040,000 and 23% on the portion above it. The tax is withheld and reported by the employer.

On investment income, dividends are taxed at 8% while other investment income and capital gains are taxed at 15%. Individuals with annual turnover up to ALL 10,000,000 may elect a special regime that allows business expenses to be deducted at fixed percentages set by activity type; the election binds for three consecutive years.

Withholding and Dividend Tax Rates

Default withholding rates on payments to non-residents are 8% on dividends and 15% on interest, royalties, technical service fees and management fees. The 8% dividend rate sits below most of the region, which makes it a decisive factor for investors planning profit repatriation.

Treaties with Turkey and Germany

The treaty with Turkey, effective since 1 January 1997, caps dividends at 5% or 8% depending on the ownership level, interest at 10% and royalties at 10%. The treaty with Germany, effective since 1 January 2012, caps dividends at 5% or 8%, interest at 5% and royalties at 5%. Where a non-resident company creates no permanent establishment in Albania and a treaty applies, no withholding tax may arise at all. To claim treaty relief, a certificate of residence issued by the counterpart tax authority must be presented before payment.

Social Security and Health Contributions

Employers pay 15% social insurance plus 1.7% health insurance, or 16.7% in total, on gross salary. The employee share is 9.5% social insurance plus 1.7% health insurance, or 11.2%. A combined burden of 27.9% keeps Albania competitive in regional employment cost comparisons.

Minimum Wage and Contribution Base in 2026

From 1 January 2026 the monthly minimum wage is ALL 50,000. The minimum contribution base equals the minimum wage, while the maximum base is ALL 186,416 per month. For self-employed persons and unpaid family workers, health contributions are computed on twice the minimum wage, that is ALL 100,000. Where foreign staff are hired, permit procedures sit alongside the contribution cost; these are set out under visa types and residence permits in Albania. Payroll models should account for the ceiling being revised each year.

Local Taxes, Property Tax and Fees

Building tax is 0.05% for residential property and 0.20% for commercial property, rising to 30% for construction left unfinished beyond the permit period. There is no stamp duty on property transfers; instead a notary tax of ALL 1,000 applies to immovable property and ALL 700 to movable property. The company registration fee is ALL 120, and it is waived when the application is filed online as part of the company formation process in Albania. Customs duties range from 0% to 15% depending on the product group, and excise duties apply to energy products, tobacco and alcohol.

Tax Incentives and Exemptions

Four and five star hotels that obtain special status in the tourism sector are exempt from corporate income tax for ten years. Law no. 9/2025 extended the deadline for obtaining that status to 31 December 2026 and lengthened the period for starting operations to five years after the status is granted. Legal entities carrying out religious, humanitarian, charitable, scientific or educational activities, as well as film production studios licensed by the National Centre of Cinematography, are also exempt from corporate income tax.

Albania additionally grants a unilateral foreign tax credit for income tax paid abroad by its residents, which materially reduces double taxation risk for groups operating across several jurisdictions. Albania's support for foreign investment is further reinforced through free zone arrangements and sectoral grant schemes.

Filing Calendar and Compliance Duties

The corporate income tax return is filed electronically by 31 March of the year following the accounting period. Advance instalments are paid monthly or quarterly during the year. VAT returns are submitted monthly, by the 14th day of the following month, and payroll and contribution declarations follow a monthly cycle as well.

The fiscalisation system, which requires all sales documents to be transmitted to the tax administration in real time, has been mandatory since 2021. Non-compliance can trigger substantial administrative penalties even for small businesses, so the accounting infrastructure should be set up at incorporation. Books must be kept in Albanian and financial statements prepared under national accounting standards or IFRS.

How Albania Compares in the Region

The distinguishing feature is not the headline corporate rate, which is broadly aligned with neighbouring markets, but the combination of a low dividend withholding tax and moderate payroll contributions. For a structure that both employs staff and distributes profit, that combination is where the effective saving accumulates.

Tax Planning at Company Formation

The first decision that shapes the tax bill is whether the activity runs as an individual business or as a limited liability company. Consulting, software and professional services expected to stay below ALL 14,000,000 in annual revenue can benefit from the zero rate as individual businesses, while ventures with multiple shareholders, external investment or liability exposure need an Sh.p.k.

The second decision is VAT status. Where input costs are high and revenue is export-driven, voluntary registration improves cash flow. The third is the profit distribution schedule: dividend withholding arises on distribution, so earnings retained and reinvested in the company carry no additional layer. Documentation requirements and step-by-step procedures are covered in investment opportunities in Albania.

On the post-incorporation side, fiscalisation integration, Albanian-language bookkeeping and monthly filing discipline are the three critical items. World Company Setup manages the full path from company registration and NIPT issuance to bank account opening, monthly accounting and payroll.

Sources

The rates on this page are verified against the following sources and updated whenever the legislation changes.

• Republic of Albania, Law no. 29/2023 on Income Tax (in force from 1 January 2024)
• General Directorate of Taxation of Albania (Drejtoria e Përgjithshme e Tatimeve) — tatime.gov.al
• PwC Worldwide Tax Summaries, Albania — Corporate and Individual sections (last reviewed 22 July 2026)
• Law no. 9/2025 extending tax incentives for the tourism sector, Official Gazette, 26 February 2025
• Council of Ministers decision on the minimum wage and contribution bases effective 1 January 2026

Rates are current as of 3 September 2026. Tax legislation changes frequently, so the position should be confirmed before an investment decision is made.