Albania: Albania changes income tax law, introduces incentives for agro-tourism

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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

Albania: Albania changes income tax law, introduces incentives for agro-tourism

Sponsored by

Eurofast Albania
intl-updates-small.jpg

The Albanian Parliament on July 9 2018 approved a draft law submitted by the Council of Ministers that proposed several changes to income tax.

The law affects income tax in several sectors of the country's economy: farmers involved in agricultural cooperation societies, agro-tourism businesses, the construction industry, small and medium-sized enterprises, and gambling companies.

Albania currently has three income tax brackets: for businesses with an annual turnover up to ALL 5 million ($46,000), the rate is zero; for those with a turnover from ALL 5 to 8 million per year, it is 5%; and when the annual turnover exceeds ALL 8 million, it is 15%. These income brackets are one of the aspects that the law amends.

Incentives for agro-tourism enterprises

The Albanian economy is largely dependent on the agricultural sector. The government's objective is to increase the cooperation of small land owners by creating agricultural cooperatives. This requires incentives, which is why the revised law reduces the income tax rate for agro-tourism enterprises from 15% to 5%. The objective is to promote the creation and growth of this type of enterprise, which is expected to provide accommodation, food, recreation, entertainment, and other activities related to the farm. This business category is required to be licensed in accordance with the legal criteria. This is a provisionary measure, which will remain in force for 10 years.

Income tax bracket widened

The reduced threshold for VAT registration was applied in April 2018. To alleviate the impact of this change, the Council of Ministers has proposed increasing the threshold of the top income tax category (15% income tax) from the previous ALL 8 million to ALL 14 million. This effectively widens the middle income tax bracket (5% income tax) to apply to entities with annual turnovers between ALL 5 and 14 million.

Tax on gambling income

The revised law also introduces changes to income tax on gambling. A 15% rate will be applied to all gambling categories on gross income which equals the amount played by gamers after winnings have been paid out.

The corporate income tax amendments will be applicable from January 1 2019, and are part of several tax changes that the government and parliament have made this fiscal year. The revised law provides for a considerable decrease in the income tax rate, from 15% to 5%, for a large number of companies. This is expected to have a positive impact on the overall economy, and especially on sectors to which the amendments apply.

more across site & shared bottom lb ros

More from across our site

DLA Piper’s co-head of tax for the US and Latin America tells ITR about her fervent belief in equal access to the law, loving yoga, and paternal inspirations
Tax expert Craig Hillier agrees with the comparison of pillar two to using a sledgehammer to crack a nut
The amount is reported to be up 57% from the £5.6bn that the UK tax agency believes was underpaid in the previous year
The US president also unveiled a new 50% levy on copper imports; in other news, a UK wealth tax proposal has been criticised by the Institute for Fiscal Studies
Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
Gift this article