Albania: Albania abolishes taxes for small businesses

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Albania: Albania abolishes taxes for small businesses

Asllani-Ndreka-Dorina

Dorina Asllani Ndreka

The government of Albania has announced a new tax reform which includes the removal of the obligation to pay the simplified income tax for small businesses with annual turnover up to €36,000 (or 5 million ALL).

This reform, which entered into force as of the 2016 fiscal year, also includes a tax reduction of two and a half percentage points for businesses with annual turnover between €36,000 to €58,000 Euros (5 million – 8 million ALL). There are approximately 100,000 businesses which will benefit from this reform and it is expected that the new measures will help increase the general turnover of the economy and assist the economic development of the country.

The lack of business regulation continues to be one of the main problems of the Albanian economy. In order to find a solution for this issue, the government has initiated tighter control of Albanian businesses in relation to the observance of the tax legal framework. Additionally, the Prime Minister has announced a new tax regime for small and medium businesses in Albania, which also entered into force with the beginning of the new fiscal year. Specifically, the changes announced include:

  • The total abolishment of the simplified profit tax for businesses with a turnover up to 2 million ALL. These companies now pay a flat tax on profit in amount of 25,000 ALL;

  • the total abolishment of the simplified profit tax for businesses with a turnover between 20 million and 50 million ALL, which now pay a 7.5% tax on profit; and

  • the reduction of the simplified tax on profit (from 7.5% to 5%), for businesses with turnover between 5 million ALL and 8 million ALL.

Despite the fact that the small businesses (those with turnover not exceeding 50 million ALL) will not have to pay tax on income, they must declare their total turnover based on the invoices for all their purchases and sales. Every year – to February 25 – these businesses will have to submit the declaration of their annual incomes and expenses.

The above-discussed changes are applicable from the 2016 fiscal year. The number of small businesses and self-employed persons that will benefit from these changes and whose tax on profit will become zero has been estimated to be around 83,300. Furthermore, there are 15,900 businesses whose simplified tax on income will be reduced to the 5% rate.

Dorina Asllani Ndreka (tirana@eurofast.eu)

Eurofast Global, Tirana Office

Tel: +355 42 248 548

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

A recent UK First-tier Tribunal decision highlights the broad application of an anti-avoidance rule to deny tax relief, say Robert Waterson and Matthew Cummings of Eversheds Sutherland
The world’s largest legal market is typically alive with activity, with tax firms jostling for position ahead of the World Tax Rankings and ITR Awards
Public funding will allow the firm to invest in lateral hires, technology and further bolt-on acquisitions, MHA said
William Paul is being replaced as IRS chief counsel just two months after starting, it is understood
Wopke Hoekstra implored US officials to ‘truly look into the facts’; in other news, the EU Council has reached a political agreement on DAC9
The US president’s flippant approach to international trade will cause chaos for corporations, but there are opportunities for intrepid tax advisers
The ruling underscores that tax authorities must provide ‘detailed, well-supported, and logically sound justifications’ when determining reference prices in tax assessments, one expert told ITR
Tax teams and the IT experts they rely on should be wary of increased compliance, says Richard Sampson, chief revenue officer at Tax Systems
The law firm was representing a businessman in the commodities sector who had previously been convicted of tax fraud
One expert last month predicted the short-term impact of tariffs would be “devastating” for both Canada and the US, particularly if the former instituted retaliatory measures
Gift this article