Tax penalties are prescribed by law as fixed amounts or percentages, depending on the violation and the taxpayer's status. Above all, there is a cap that provides relief, because penalties imposed on a tax liability cannot exceed 100% of the liability itself. Late fees are a liability separate from the penalty.
This page contains the fine table by violation with the relevant article, the fine limit, how late fees are calculated, the effect of self-declaration on the penalty amount, and a complete example calculating the liability to the amount payable.
Read also: How a tax audit is conducted and how to appeal it.
Main fines by violation
| Violation | Mass | Article 9920 of the law |
|---|---|---|
| Not registered | 10,000 lekë for a natural person, 15,000 lekë for a legal person | 112 |
| Failure to file within the deadline, taxpayer of VAT or income tax | 10,000 leks | 113 |
| Failure to file on time, other taxpayers | 5,000 lek | 113 |
| Failure to file on time, individuals | 3,000 lek | 113 |
| Late payment | 0.061 TP3T per day, up to a maximum of 365 days. | 114 |
| Incorrect declaration | 0.061 TP3T per day; when the credit surplus falls, 20.1 TP3T | 115 |
| Documentation of double taxation agreements | 10,000 lekë per month, up to 24 months | 115/3 |
| Tax evasion | 100% of the difference | 116 |
| Withholding tax agent | 0.061 TP3T per day; 501 TP3T when not wearing; 1001 TP3T when wearing and not declaring. | 117 |
| Failure to keep books and records | 10,000 lekë for a natural person, 50,000 lekë for a legal person | 118 |
| Undeclared employee | 200,000 lek for VAT and corporate income tax payers, 50,000 lek for others. | 119 |
| Hiding the salary | 200% legal entity, 100% others | 119 |
| Cash payment over the legal limit | 10% of the transaction value | 120 |
| Failure to issue an invoice, first time | 25,000, 50,000, or 75,000 lek, as the case may be. | 123 |
| Failure to issue an invoice, second time | Fine of 50,000, 100,000, or 500,000 lek and a 30-day business suspension. | 123 |
| Violation of fiscal obligations | 25,000, 50,000 or 75,000 lek | 124 |
| Electronic invoice not issued in accordance with the rules. | 50,000, 100,000 or 150,000 lek | 124/2 |
| Failure to issue an invoice | 50,000, 25,000, or 1,000 lek, as the case may be. | 125 |
| Obstruction of control | 100,000 lek for an individual, 1,000,000 lek for an entity | 127 |
| Incorrect invoice | 50% for tax effect; 10,000 lek when no effect. | 128 |
| Non-display of prices | 100,000 lek for VAT and corporate income tax payers, 50,000 lek for others. | 130 |
The table lists the most frequently encountered violations. The law also provides for fines for price transfer, country-by-country reporting, the software developer, and banks, which are addressed on the respective pages.
Read also: Invoicing obligations, fiscalization, and payment limits.
This is the violation with the most severe progressive penalty. The first offense results in a fine. The second offense results in an additional fine and a 30-day business shutdown. The third offense leads to criminal prosecution and the publication of the taxpayer's name.
Article 111, paragraph 5, imposes a cap that many businesses are unaware of. Penalties imposed for a tax liability may not exceed 100% of the liability itself, so the penalty does not multiply the liability indefinitely.
Tax liability of 50,000 lekë, with several fines imposed on the same liability that together amount to 80,000 lekë. The limit under Article 111, paragraph 5, caps the total fines at 50,000 lekë, i.e., the amount of the obligation. Late payment interest is a separate obligation from the fine and is calculated separately.
Read also: Fiscal Amnesty 2026 and the waiver of fines.
Delinquency interest and penalties are often confused, but they are two separate obligations that go hand in hand when a tax is paid late.
The late payment penalty, pursuant to Article 114, is 0.06% of the amount due for each day of delay, capped at 365 days. Late‐payment interest, pursuant to Article 76(3), is calculated using the formula 120% of the Bank of Albania's interbank interest rate and is updated quarterly.
The late‐payment interest rate published by the General Directorate of Taxes for the period from April 11, 2026 onward is 7.81%. For a delay spanning multiple quarters, the rates for each period apply, so the exact figure depends on the dates.
Two separate obligations
| The issue | Failure to pay fine | Late payment |
|---|---|---|
| Legal basis | Article 114 | Article 76/3 |
| Mass | 0.061 TP3T of the obligation per day | 7.8% for the period from April 11, 2026 onward |
| Time limit | Maximum 365 days | Without a limit on days, how long does the delay last? |
| Interest rate update | Fixed in law | Every quarter, from DPT |
| The effect of the 100% limit | Included, pursuant to Article 111/5. | It's not a fine; it's calculated separately. |
| Installment Agreement | Does not apply during the agreement, Article 77 | Continues in accordance with the applicable norm. |
Caution. The method for dividing the annual rate of 7.81 TP3T over a number of days shorter than a year—that is, the daily interest-charge formula—is not derived from the consolidated text or from Instruction No. 24/2008.
Within 30 days of the notice of audit, the taxpayer may self-report the underreported liability. In this case, the penalty is applied at the rate of 50% of the self-reported tax, pursuant to Article 81 of Law No. 9920/2008.
This is the most underrated opportunity in the entire procedure. When you know a period has deficiencies, self-reporting within 30 days costs less than the same obligation discovered by an audit, because it affects the penalty amount.
Declared liability in deficiency of 2,000,000 lek. Self-assessment within 30 days incurs a penalty of 1,000,000 lek, i.e., 501 TP3T of the self-assessed tax. The same obligation, as determined by the audit and classified as evasion under Article 116, carries a fine of 2,000,000 lek, i.e., 100% of the difference. The saving is 1,000,000 lek.
The installment payment agreement is the second option. The request is made in writing, the agreement is entered into within 10 days, the immediate payment is 20% of the liability, and the repayment term runs until the end of the following year. The penalty under Article 114 does not apply during the agreement, and the agreement does not cover withholding tax or contributions.
Read also: What happens when a debt goes unpaid, from account freezing to seizure..
When a payment covers only part of the obligation, the question arises as to what is paid off first: the tax, the late‐payment interest, or the penalty. The order applied determines whether the payment stops the obligation from growing or merely reduces one of its components.
In practice, before making a partial payment, the status in e-Filing is checked and clarified with the tax administration which item is being settled, because a partial payment on the wrong item does not stop the liability from increasing.
VAT liability of 1,000,000 lekë, declared on time and unpaid for 365 days. The penalty under Article 114 is calculated as 1,000,000 × 0.061 TP3T × 365, i.e., 21.9 TP3T of the liability, or 219,000 lek. Late interest at a rate of 7.8 TP3T for a full year yields 78,000 lek. The fines, 219,000 lek, remain well below the 1,001 TP3T liability threshold, i.e., under 1,000,000 lek. The total to be paid is 1,000,000 plus 219,000 plus 78,000, for a total of 1,297,000 lek, or 29.71% over the initial liability.
For the same obligation, if an installment agreement had been entered into, the business would have paid immediately 200,000 lekë, i.e. 20%, and the remaining 800,000 lek would be paid in installments until the end of the following year, without the penalty under Article 114. Late interest would continue at the prevailing rate, so the main saving comes from the 219,000-lek penalty.
Read also: How the review, objections, and appeal process works.
The non-payment fee and late-payment interest get mixed up, and the business only charges one of the two.
The 100% limit in Section 111, point 5, is not required, and fines remain on the obligation.
The declaration is not filed because the tax is zero, and a penalty is imposed for failure to file.
The 30-day period for self-declaration expires, and the 50% penalty is replaced with a 100% fine.
An installment agreement is required once collection by force has begun, when immediate payment of 20% has become impossible.
It is claimed that an installment agreement also applies to contributions and withholding tax, which the law excludes.
A partial payment is made without specifying which amount is being applied, and the obligation continues to grow.
The late‐payment interest rate is the same for the entire period and is updated every quarter.
10,000 lekë for VAT and corporate income tax payers, 5,000 lekë for other taxpayers, and 3,000 lekë for individuals, pursuant to Article 113.
0.061 TP3T interest on the obligation for each day of delay, up to a maximum of 365 days, pursuant to Article 114. For a full year, this amounts to 21.9 TP3T on the obligation.
The rate published by the General Directorate of Taxes for the period from April 11, 2026 onward is 7.81%. The legal formula is 1.201% plus the Bank of Albania's interbank interest rate, and the rate is updated quarterly.
No. Penalties for a tax liability do not exceed 100% of the liability, pursuant to Article 111, paragraph 5. Late fees are calculated separately.
25,000, 50,000, or 75,000 lekë, as the case may be, for the first offense. For the second offense, penalties increase to 50,000, 100,000, or 500,000 lekë, and the activity is suspended for 30 days. A third offense leads to criminal prosecution.
200,000 lekë for VAT and corporate income tax payers, 50,000 lekë for others. Concealing wages is punishable by 200,000 lekë for legal entities and 100,000 lekë for others.
Yes. Within 30 days of the audit notice, the penalty is applied at the rate of 50% of the self-assessed tax, pursuant to Article 81.
Yes. The request is made in writing, the agreement is entered into within 10 days, 20% is paid immediately, and the remainder is settled by the end of the following year. It does not apply to withholding tax and contributions.
We do not confirm the payment order without verification from the official source. Before payment, we check the status in e-Filing and clarify it with the tax administration.
Law No. 9920, dated 19.05.2008 “On Tax Procedures in the Republic of Albania,” as amended by Law No. 79/2025, Article 74 on the payment deadline, Article 76(3) on late interest, Article 77 on installments, Article 81 on self-assessment, Article 111(5) on the penalty cap, Articles 112 to 130 on penalties
Minister of Finance Instruction No. 24, dated September 2, 2008, “On Tax Procedures,” as amended
Law No. 87/2019 “On the Invoice and the Monitoring System of Turnover,” as amended, Article 44, under which the fines are those of Law No. 9920/2008.
Interest rates and late fees, General Directorate of Taxes.