International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

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

Albania: New tax incentives for operating in free zones in Albania


Drilona Likaj

The Government of Albania has approved some amendments to the Law on the Establishment and Functioning of Economic Zones. The amendments introduce new regulations and new tax incentives for companies operating in the free zones. According to the approved amendments, corporate income tax (CIT) will be reduced by 50% for the entities that operate in free zones for the first five years of their activity. Entities operating in free zones can calculate 20% of capital expenses incurred during the fiscal year as deductible expenses for CIT purposes within the same period, regardless of the depreciation rates approved as per the income tax law. The entities have the right to benefit from this incentive only during the first three years from the beginning of the activity and for a total of two years.

The supply of Albanian goods that are intended to be placed in the free zone is considered as export with 0% VAT rate in accordance with the provisions of the VAT law and customs law.

Development projects are exempted from the infrastructure tax levied in the country. This is a tax applied on new investments, at a rate of 2%-4% of the value of the investment in Tirana and 1%-3% of the value in other areas of the country.

Constructions carried out for development projects are exempted from property tax during the first five years.

Developers and operators in free zones are exempted from capital gains tax, which is levied at the rate of 15%.

Salary and insurance contribution expenses will be recognised at 150% of the value as deductible expenses for corporate income tax purposes during the first year of the activity. In subsequent years, only the additional expenses for wages compared to the previous year will be recognised for CIT purposes at 150% of the value.

Employee training costs will be recognised at 200% of the value as deductible expenses for corporate income tax purposes during the first 10 years of the activity.

Expenses for research and development (R&D) will be recognised for CIT purposes at 200% of the value.

The procedures of entry and exit of goods into, or out of, free zones will adhere to the regulations of the Albanian Customs Code.

The abovementioned tax incentives aim to encourage investments, create new jobs, increase incomes, introduce advanced technology, and accelerate regional development.

Drilona Likaj (

Eurofast Global, Tirana office

Tel: +355 42 248 548


more across site & bottom lb ros

More from across our site

US lawmakers averted a default on debt by approving the Fiscal Responsibility Act, but this deal may consolidate the Biden tax reforms rather than undermine them.
In a letter to the Australian Senate, the firm has provided the names of all 67 staff who received confidential emails but has not released them publicly.
David Pickstone and Anastasia Nourescu of Stewarts review the facts and implications of Ørsted’s appeal at the Upper Tribunal.
The Internal Revenue Service will lose the funding as part of the US debt limit deal, while Amazon UK reaps the benefits of the 130% ‘super-deduction’.
The European Commission wanted to make an example of US companies like Apple, but its crusade against ‘sweetheart’ tax rulings may be derailed at the CJEU.
The OECD has announced that a TP training programme is about to conclude in West Africa, a region that has been plagued by mispricing activities for a number of years.
Richard Murphy and Andrew Baker make the case for tax transparency as a public good and how key principles should lead to a better tax system.
‘Go on leave, effective immediately’, PwC has told nine partners in the latest development in the firm’s ongoing tax scandal.
The forum heard that VAT professionals are struggling under new pressures to validate transactions and catch fraud, responsibilities that they say should lie with governments.
The working paper suggested a new framework for boosting effective carbon rates and reducing the inconsistency of climate policy.