The zero profit tax rate has only one condition: annual gross revenue must not exceed 14,000,000 lek. It does not matter the form of registration, the type of activity, or the area in which you operate. The relief is valid until December 31, 2029.
This page covers the conditions for obtaining benefits, the obligations that remain active, how the threshold is measured, special cases of exceeding the threshold, and preparation for the normal regime after 2030.
Read also: Complete income tax rates by business form.
Article 69, paragraph 1, letter “dh”, e Law No. 29/2023 Sets the rate at 0.3% until December 31, 2029 for natural persons engaged in trade, self-employed individuals, and entities, provided that annual gross income does not exceed 14,000,000 lekë.
The word “entities” includes limited liability companies, joint-stock companies, general partnerships, and limited partnerships. So even a small LLC doesn't pay corporate income tax, just like an individual with the same turnover.
| Form | Annual turnover | Profit Tax |
|---|---|---|
| Merchant natural person | 9,000,000 lek | zero lek |
| Self-employed, freelance profession | 6,000,000 lek | zero lek |
| LLC. | 12,000,000 lek | zero lek |
| Sole Proprietorship | 15,000,000 lek, profit 3,000,000 lek | 450,000 lek |
| LLC. | 20,000,000 lek, profit 3,000,000 lek | 450,000 lek |
| Certified agritourism | regardless of the turn | 5% until 2029 |
The threshold functions as a full threshold, not on a sliding scale. Exceeding it by even one lek brings the entire profit under the normal regime.
| Annual turnover | Profit | Profit Tax |
|---|---|---|
| 13,900,000 lek | Two million lek | zero lek |
| 14,100,000 lek | Two million lek | 300,000 lek |
A difference of 200,000 lek in turnover results in 300,000 lek in tax. This is no reason to hide revenue, since the risk of a fine is much higher, but it's a good reason to know where you stand before the end of the year.
The threshold refers to annual gross revenue, i.e., total turnover before VAT, regardless of how much remains as profit.
Business A: revenue 15,000,000 lek, profit 1,000,000 lek. It does not benefit, because its revenue exceeds the threshold. Business B: revenue 13,500,000 lek, profit 5,000,000 lek. It pays nothing, even though its profit is five times greater.
The threshold is measured based on the subject's total turnover, not on a per-activity basis. If the same NIPT carries on both trade and services, the revenues are aggregated.
The projected turnover declared at registration can be converted into an annual value, and this determines the tax category under which the business starts.
Note: Registered in November, with declared revenue of 5,000,000 lekë for the remaining two months. The annual calculation brings it to 30,000,000 lekë, meaning it exceeds both the profit tax threshold and the VAT threshold. The business starts with obligations it didn't expect. This field is filled with caution.
Read also: How to register an LLC on e-Albania.
The turnover recorded is shown in the sales book generated by the fiscalization system and compared to the threshold at each monthly closing. The mid-year check is the right time to assess whether you will remain below the threshold through the end of the year.
✔ Annual tax return, by March 31
✔ Insurance contributions for yourself and for each employee
✔ VAT, when turnover exceeds 10,000,000 lek
✔ Electronic invoicing for every transaction
✔ Accounting and record-keeping
✔ Financial statements in the QKB for companies, until July 31
✔ Dividend 8%, when the company distributes profit
It must be filed by March 31, even if the tax is zero and even if the business has had no activity. Failure to file results in a penalty, even though there is no obligation to pay.
For themselves, contributions are paid on the portion of the salary above the minimum wage of 50,000 lek. For each employee, the full contributions are paid: 16.71% by the employer and 11.21% by the employee, for a total of 27.91%. The payroll is declared by the 20th of the following month.
Read also: Real employee cost and payroll calculator.
VAT has a lower threshold than income tax, and this creates a band where obligation and relief coexist: between 10 and 14 million lek, a business declares VAT every month and simultaneously has zero income tax.
Read also: Thresholds, rates, and VAT reporting.
An invoice is issued and fiscally registered for every transaction. Without fiscal registration, the invoice is not recognized as a valid tax document, and the business buyer cannot deduct the expense.
Read also: Fiscalization obligations, cash and POS limits.
Zero taxation covers the company's profit, not the transfer of funds to the partner. When the assembly decides on distribution, the dividend is taxed at 8%.
Company with a turnover of 12,000,000 lek and a profit of 4,000,000 lek: tax on profit 0 lek. If the partner distributes the entire profit, the dividend is subject to 320,000 lek in tax. In his pocket, 3,680,000 lek remain. A natural person with the same profit pays nothing, because the profit goes directly to him.
Read also: Dividend distribution procedure.
| Deadline | Obligation |
|---|---|
| The 11th of every month | Sales and purchase books for VAT-registered entities |
| The 14th of every month | VAT declaration and payment |
| The 20th of each month | Payroll, contributions, and withholding tax |
| March 31 | Annual income tax declaration |
| March 31 | DIVA, for individuals who have an obligation |
| July 31 | Financial statements in the QKB for companies |
Deposits do not appear in this calendar because they do not arise for business below the threshold.
Read also: The complete tax calendar of the year.
Initial installments are calculated based on the tax for the previous year. If the previous year's tax is zero, no installments are due, so nothing is paid during the year below the threshold.
The obligation arises the year after the threshold is crossed, and then the previous year's tax and the new year's installments are due together.
Business crossing the threshold in 2027 with a profit of 3,000,000 lekë: by March 31, 2028, it pays 450,000 lekë in tax, and within the first quarter of 2028 the first installment of approximately 112,500 lekë. In three months, about 562,500 lekë, for a business that last year paid zero.
Read also: How prepayments are calculated and when a review is required.
The law initially removed liberal professions from the regime and taxed them at 151 TP3T from January 1, 2024, through Government Decree No. 753/2023. The Constitutional Court, with Decision No. 52, On June 27, 2024, it repealed this exemption.
Today, lawyers, doctors, accountants, architects, consultants, and other self-employed individuals are treated the same as any business, i.e., 0.3% below the threshold of 14,000,000 lekë. The activity-based classification that the Council of Ministers had established no longer applies.
Read also: Self-Employment Regime and Status Declaration.
Regardless of turnover, the same provision maintains reduced rates until December 31, 2029 for certified agritourism under the tourism legislation, agricultural cooperation societies under Law No. 38/2012, and activities in the automotive industry.
Attention: The 5% rate for software developers, provided for entities registered before the law's entry into force, expired on December 31, 2025. From January 1, 2026, they will be taxed under the general regime, and with a turnover of up to 14,000,000 lekë they will fall under the 0% regime.
The end date is written into law: December 31, 2029. As of January 1, 2030, unless the law is changed, the general rates apply: 15% for individuals on profits up to 14,000,000 lekë and 23% on the excess, and 15% for companies.
For a business with an annual profit of 3,000,000 lek, moving from zero to the regular regime means an additional 450,000 lek in tax per year. The period until 2029 is when this obligation is being prepared, not when it's being forgotten.
✔ Expense documentation is kept neat and complete, because after 2030 it determines the taxable profit.
✔ Asset depreciation is recorded accurately from now on, even when it doesn't affect taxes.
✔ The registration form is revised, because after 2030 the difference between a natural person and a company becomes a real liability gap.
✔ Retained earnings are projected before 2030, along with the timing of dividend distribution.
Read also: Sole proprietor or LLC, which structure suits you?.
Yes. The tax is zero, but the annual return is filed by March 31, just like any other business.
Yes. The law explicitly includes entities, including companies with revenues of up to 14,000,000 lek.
Zero income tax on business income, following the Constitutional Court's decision. Self-employed contributions are paid as usual.
Because there are two different thresholds. VAT starts at 10,000,000 lek, while the zero rate on profit tax applies up to 14,000,000 lek.
Yes. The dividend is taxed at 8.1% when distributed, even though the profit was not taxed.
No. Installments are calculated based on the tax for the previous year, so if it's zero, no installments are due.
Yes. The declaration can be submitted even without activity.
Exceeding the threshold places the entire profit under the regular tax regime. With a profit of 2,000,000 lek, the tax becomes 300,000 lek, whereas below the threshold it would be zero.
Carry-forward of losses for five years is provided for by law for losses incurred from 2024 onward. For specific guidance on treating losses in zero-rate years, please write to us with your case.
The treatment of the year in which the threshold is crossed depends on the specific circumstances. Write to us with your figures and we will respond regarding the specific case.
Read also: Deductible expenses and depreciation.