- The effects of the 2027 Fiscal Package depend on three questions: turnover at three levels, legal form, and sector.
- The tax on profit remains at 151 TP3T. The dividend is proposed to be increased from 81 TP3T to 151 TP3T for each distribution decision from January 1, 2027.
- The VAT threshold will drop to 5,000,000 LEK as of January 1, 2027, and will be calculated on the 2027 turnover, not the 2026 turnover.
- Salaries from 300,000 to 700,000 LEK earn 10,000 LEK net per month. Salaries above approximately 843,000 LEK pay more.
- The VAT cut on food aims to lower the final price by up to 11.71% cheaper. A supermarket with 701 items of food returns about 2,850,000 LEK to customers per year if it passes the savings on in full.
The effects of the 2027 Fiscal Package are not the same for every business. The new VAT threshold was set by a decision of the Council of Ministers on October 28, 2026. The VAT rates, dividend, and wages are draft bills in Parliament and may change until approval.
The first draft of October 27 mentioned a 17% profit tax and a 32% rate for high salaries. Both were removed on October 28. The profit tax remains at 15% and the top payroll rate is 30%.
This article doesn't explain the package clause by clause. It asks you three questions and gives you the figure for your case. Your turnover places you in one of three tiers: up to 5 million, 5 to 10 million, and over 10 million. Legal form and sector are the two keys that change the answer. Who you sell to is a sub-issue of turnover, because it determines whether you can pass on VAT in the price. At the end you'll find the free calculator, where you enter your figures and see the effect of each change individually.
Read also: Fiscal Package 2027: What's being proposed for businesses?, The VAT threshold is lowered to 5,000,000 lekë, how is it measured?, Taxes 2027: What has been decided and what awaits Parliament
First question: What is your annual mileage?
The threshold for mandatory VAT registration will drop from 10,000,000 to 5,000,000 LEK as of January 1, 2027. This is the only change in the package that has been published as an act. According to the Ministry's explanatory memorandum, about 17,516 new businesses will be brought in.
Your turnover places you in one of three brackets. For sales under 5,000,000 LEK, nothing changes; only purchase prices are affected. From 5,000,000 to 10,000,000 LEK you become VAT-registered in 2027. Above 10,000,000 LEK you are already registered and only the new standard rate applies.
What happens if you had 7,500,000 LEK in 2026?
You are not automatically registered as of January 1. The decision contains no transitional provision for the 2026 turnover. Under the law, the obligation arises when turnover exceeds the threshold and Registration request It must be done within 15 days of the overstep. Experts cited by Monitor on November 9, 2026 interpret it the same way: the new threshold is measured based on turnover beginning January 1, 2027.
For a bar with a steady turnover of 7,500,000 LEK, this means becoming VAT-registered around August 2027. VAT is calculated only on the amount above the threshold. The first-year effect is about one-third of the full effect. The tax administration has not yet clarified this in writing, so the monthly turnover has been tracked since January at Your e-Filing account and in the sales books.
How much does it cost to register for VAT in cash?
The cost is not the 21% of turnover. It is the difference between the VAT on sales and the VAT on purchases. Any purchase with a tax invoice is deductible, as is the stock you hold on the date of registration, provided that the invoices are VAT-inclusive.
Bar with LEK 7,500,000 in revenue and LEK 4,500,000 in purchases, at unchanged prices. Sales VAT is approximately LEK 1,302,000. The deductible VAT is approximately 781,000 LEK. The net cost is about 521,000 LEK for a full year, excluding administrative time. In 2027, with an August start, the cost is about 174,000 LEK.
Exiting the regime requires 12 months after the application. Splitting the business into two NIPTs to stay below the threshold is the first scheme to be monitored and is not recommended.
Who do you sell to, businesses or consumers?
This is the turnover threshold issue, because it determines whether you have the option to pass the VAT on to the price. When customers are VAT-registered businesses, they deduct the VAT you invoice them. For you, the effect of the rates is zero and VAT input is often a benefit. When customers are VAT-registered businesses, they deduct the VAT you invoice them.
The standard rate is proposed to be raised from 20% to 21%. A single point of VAT on a VAT-inclusive price amounts to 0.83% of the final price. Most businesses will absorb it for consumers. For fixed-price contracts with VAT included that extend through 2027, the rate applies and the clauses are now being revised.
The consultant example and the bar-café example, the same scale, two effects.
Consultant with an annual turnover of 8,000,000 LEK, business clients and purchases of 2,000,000 LEK. He is VAT-registered, invoices at 21% VAT, and clients deduct it. He earns about 347,000 LEK per year from VAT on purchases, which until now was a cost. When clients are from abroad, he invoices at 0% VAT and the VAT on purchases is refunded to him. His cost is the procedure and waiting for the refund.
Bar-café with LEK 7,500,000 in revenue and consumer customers. If it raises prices by 21.1%, customers pay about LEK 1,575,000 more per year and the business gains a LEK 781,000 discount. If it keeps prices the same, it loses about 521,000 LEK. The middle path—a partial price increase—is the actual decision of the majority.
Second question. Are you a company or a sole proprietor?
The legal form is the first key. The answer determines whether the dividend applies to you. A sole proprietor has no dividends and its rates do not change. Up to 14,000,000 LEK in turnover pays 0% through the end of 2029. Above that amount it pays 15% and 23% as it does today.
The company is taxed whenever it distributes profit, even if its turnover is below 5,000,000 LEK. Consulting firms, startups, and foreign-owned companies are often in this group. They are not subject to VAT and have a 0% income tax, but they pay the new dividend tax.
How much will the dividend from 2027 cost?
The dividend tax is proposed to be raised from 81% to 151%. The profit tax remains at 151% for companies with revenues above 14,000,000 LEK and at 0% for those below this threshold until December 31, 2029. From 100 LEK of pre-tax profit, the owner of a large company receives today 78.20 LEK and tomorrow 72.25 LEK. The owner of a small company receives today 92 LEK and tomorrow 85 LEK.
Example. A consulting company with LEK 4,000,000 in revenue distributes LEK 1,500,000 in profit. Today it pays LEK 120,000 in dividend tax. From 2027 it pays 225,000 LEK. The difference is 105,000 LEK per year, with no other change in the business.
The Ministry of Finance justifies the increase by unifying the 15% rate on all investment income. It also aims to close the scheme in which the partner takes the minimum wage and withdraws the profit as a dividend. The dividend remains cheaper than wages even at 15%, but the gap narrows.
What do you do with the profits from past years up to December 31, 2026?
The most recent official position is dated November 5, 2026. Any distribution decision made on or after January 1, 2027 is taxed at 151 TP 3 T, even when the profit relates to earlier years. Within three days the Ministry issued three different statements, so the final transitional provision is to be read in the enacted law.
Undistributed profits from prior years are shown on the approved balance sheets. They may be declared for distribution and paid out. by December 2026 with 81 TP3T. The 2026 profit cannot take advantage of this, because its balance sheet is approved in 2027. The decision is made only when the company has free liquidity, because a dividend paid on credit costs more than seven percentage points of tax.
The alternative is reinvestment. The profit that remains in the company is not taxed as a dividend, neither today nor tomorrow.
Why are partners' loans turned into dividends?
The draft law adds a new definition. Advances, loans, and financings that the company provides to partners are treated as indirect profit distributions when they are not actual transactions or the settlement of obligations. The tax is 15%, the same as for dividends.
In many small companies, the owner withdraws money from the cash register and the accounting records it as Loan for the partner. As of 2027, this practice incurs costs. A loan balance of 1,500,000 LEK without a contract, without interest, and with no repayment term may be taxed at 225,000 LEK. Partners' accounts are settled before year-end, either by returning the amounts or by entering into a proper loan agreement.
Question three. What do you sell?
The sector is the second key. For most businesses, the answer is “something else” and nothing is added. Four sectors have a special rule that changes the answer.
Food trade: does the discount make it to the final price?
About 54 basic products are proposed at 61% instead of 201%. The final list will be approved by a decision of the Council of Ministers. The purpose of the measure is to reduce the final price. If the entire reduction is passed on to the consumer, the shelf price falls by about 11.7%. A product priced at 120 LEK becomes 106 LEK.
The discount reaches the consumer only when the entire chain—the producer, the wholesaler, and the store—passes it on. The government has announced the expansion of the Price Monitor specifically for these products. Consumers can check for themselves on bread, milk, oil, sugar, rice, pasta, and eggs, where the price remains stable. For fruits and vegetables, the reduction is hidden behind seasonal fluctuations.
For the retailer, the choice is clear. A market with 30,000,000 LEK in revenue and 70% staple foods, if it cuts prices entirely, gives customers back about 2,850,000 LEK a year and gains trust and volume. If it keeps prices unchanged, it retains about 2,700,000 LEK in additional margin, but faces risks from competition, price monitoring, and reputation. Our advice to retailers is to fully pass on the reduction, making it visible on the label.
Two technical matters remain for every merchant. The cash register must split the two rates before January 1. December inventory neither creates a credit nor an additional liability, because the VAT on purchases is deducted in the month of purchase, and from January its sales are invoiced at 6%. All that needs to be done is to relabel the prices on the shelf.
Accommodation: who is moving from 6% to 10%?
All establishments that currently bill accommodation at 6%—hotels, guesthouses, and resorts. According to the October 28 presentation, agritourism remains outside the growth. A hotel with LEK 40,000,000 in revenue loses about LEK 1,455,000 if it holds prices steady, or customers pay LEK 1,600,000 more. Contracts with tour operators for 2027 are being renegotiated now.
The company with 7,000,000 LEK in turnover newly subject to VAT charges 10% VAT. With unchanged prices and a 3,000,000 LEK purchase, it loses about 116,000 LEK over a full year.
What changes for clinics, schools, and exporters?
Healthcare, educational, financial services, and residential rental services are exempt from VAT. The threshold and sales rates do not apply to these businesses. It applies a 21% on purchases, with no right to deduct, up to about 50,000 LEK per year for purchases of 6,000,000 LEK. When they are companies, it also applies to dividends.
Service exporters become VAT-registered once they exceed 5,000,000 LEK. They invoice using 0% and reclaim the VAT on their purchases through a refund. Their impact is positive; the cost is the loss of liquidity until the refund is processed.
Vehicles: How much is the removal of the sales tax worth?
The circulation tax, about 27 LEK per liter excluding VAT, is removed from the fuel price and transferred to the annual vehicle tax. A business consuming 50,000 liters per year saves about 1,350,000 LEK excluding VAT. The annual vehicle tax increases, but the rates have not been published. Businesses with high mileage per vehicle benefit; those with many vehicles that travel little pay more.
Wages, the layer that falls on every business.
Who wins and who pays more?
The 13% bracket is expanded from 200,000 to 300,000 gross LEK per month. Bracket 23% covers 300,001 to 700,000 LEK. Above 700,000 LEK, rate 30% applies. The 30,000 LEK deduction and the 50,000 LEK exemption remain.
Salaries up to 200,000 LEK remain unchanged. A 250,000 LEK salary gains 5,000 LEK net per month. Salaries from 300,000 to 700,000 LEK gain 10,000 LEK per month, 120,000 LEK per year. The break-even point is around 843,000 LEK gross. A 1,000,000 LEK salary pays 11,000 LEK more per month. According to the report, about 25,704 employees benefit and about 1,293 pay more.
What happens when the salary is a fixed net amount?
Many employment contracts stipulate an agreed-upon net salary. In that case, the tax reduction benefits the employer, because they need less gross pay to achieve the same net pay. For a gross salary of 250,000 LEK, the employer saves about 6,000 LEK per month. Lowering the gross salary also reduces the employee's pension base, so the decision is discussed openly. Social security contributions do not change.
Every time there is a tax or financial change that affects your business, we notify you directly by email with a practical explanation.
Send me free notificationsCalculator of the effects of the 2027 Fiscal Package, with eight examples according to the scale and key.
The examples are labeled by scale and key. Scale refers to your annual turnover: up to 5 million, 5 to 10 million, or over 10 million. Key refers to the legal form or sector: food and accommodation. Select the closest example and the calculator will fill in typical figures. Only change those that differ for you. The effect of each change is shown separately and the annual total appears at the bottom. Calculations are performed on your device and no data is sent anywhere.
The complete formulas are in an Excel file you can download. There you'll find the package parameters, the payroll tax for each pay level, the eight profiles and the examples from this article, with formulas that recalculate when you change the figures. Every calculator result has been compared to the Excel formula, and the difference is zero.
Enter your business's current metrics. The calculator shows the effect of each change individually and the overall effect over one year, in lek.
The scale is your annual turnover; the key is the legal form or sector. The example uses typical figures—change only those that differ for you.
Basic data, as they are today.
The registration threshold is lowered from 10,000,000 to 5,000,000 LEK, as set by Government Decree No. 822 of October 28, 2026, effective January 1, 2027. The rates are still before Parliament: the standard rate from 20.33% to 21.1%, basic food items from 20.33% to 6.1%, and accommodation from 6.1% to 10.1%.
The profit tax remains at 15%, the increase to 17% in the preliminary draft was removed on October 28. The dividend tax rises from 8% to 15%. Businesses with revenues up to 14,000,000 LEK remain subject to a 0% profit tax until December 31, 2029. Loans and advances to partners that are not real transactions will be treated as dividends.
Slice 13% is expanded from 200,000 to 300,000 LEK per month. Slice 23% covers from 300,001 to 700,000 LEK. Above 700,000 LEK, the new rate 30% applies. The 30,000 LEK deduction and the exemption up to 50,000 LEK remain. Insurance contributions do not change under the package.
Contribution parameters used in calculations
The health contribution is calculated on gross pay with no upper limit, and the social contribution on pay between the minimum and maximum. The values for 2027 are verified once they are officially published.
- Loans, advances, and other financings that the company provides to its partners, when they are not real transactions, are treated as profit distributions and taxed as dividends at 15%.
- The turnover tax is removed from the fuel price—about 27 LEK per liter excluding VAT—and shifted to the annual vehicle tax. Businesses with high mileage benefit; those with many vehicles and low mileage pay more. The rates have not been published.
- The 10% fine on cash payments exceeding the legal limit also applies to sales to consumers, not just between businesses.
- Unpaid advance installments of income tax are treated as unpaid liabilities and collected by force. Plan the liquidity for the installments.
- Financial statements will be submitted only to the QKB, without duplicate filing with the tax authorities, once the electronic exchange is operational.
- Failure to submit the price transfer documentation within the required deadline, when requested, is punishable by a fine of 100,000 to 150,000 LEK.
- Upon business deregistration, the administration may conduct a risk-based audit, which is completed within 30 business days.
- Sponsorships in sports, art, and culture are recognized as expenses up to 31% of gross income, with authorization from the tax administration.
- The excise tax on cigarettes will increase from 7,750 to 8,100 LEK per 1,000 sticks as of January 1, 2027, with gradual increases through 2033.
A positive value means benefit, a negative value means additional cost. The effects are calculated separately, without interaction between them.
The effects of the 2027 Fiscal Package in practice: what you need to do by January.
- Calculate the revenue for the past 12 months and see where you stand relative to the 5,000,000 LEK threshold.
- Set the pricing policy for January: what you pass on to the client and what you keep for yourself.
- Review the contracts and offers that extend through 2027 for VAT clauses.
- Make the decision on retained earnings from previous years by December with your economist.
- Settle the partners' loans and advances before the end of the year.
- Update the cash register and billing system with the new rates before January 1.
- Speak openly with employees about salaries, especially when the contract provides for a fixed net amount.
Frequently Asked Questions
Is the capital gains tax increasing to 17.1%?
No. The increase was in the October 27 draft and was removed on October 28, 2026. The rate remains 15.1% for companies over 14,000,000 LEK and 0.1% for those below this threshold until the end of 2029.
I have an annual turnover of 4,800,000 LEK. Do I have to register for VAT?
No, as long as you stay under 5,000,000 LEK. Monitor your monthly turnover throughout 2027 and plan your growth consciously. The artificial splitting of the business to remain below the threshold is controlled and not worth it.
Can I receive the 2026 dividend with 8%?
According to the minister's statement of November 5, 2026, no, because the decision is made after January 1, 2027. Undistributed profits from previous years may be determined and paid by December 2026 at 81 TP3T. The final transitional provision is set out in the enacted law.
Will food prices go down?
The law cuts the tax, lowering the market price. Mathematically, the reduction is up to 11.71 TP3T. It reaches the consumer when the entire supply chain passes it on and when competition and the Price Monitor follow suit. Compare January's prices with December's for bread, milk, oil, and sugar.
Do insurance contributions change?
No. The package only changes the income tax on employment. Employee and employer contributions remain as they are.
When do the changes take effect?
The VAT threshold takes effect on January 1, 2027. The VAT rates, dividend, and wage rates are slated for January 1, 2027, but are still before Parliament. The list of food items and the vehicle tax rates will be issued through subordinate legislation.
How do I calculate the effects of the 2027 Fiscal Package on my business?
Use the free calculator on this page. Select the profile that best fits you, adjust your figures, and see the effect of each change individually and the annual total. Calculations are performed on your device and no data is sent anywhere.
Legal basis
Law No. 92/2014 “On Value Added Tax,” Articles 117 to 122, on the threshold and registration. Decision No. 822, dated October 28, 2026, on lowering the threshold to 5,000,000 LEK as of January 1, 2027. Law No. 29/2023 “On Income Tax,” regarding the current rates for dividends and wages. Draft laws for amendments to Law No. 29/2023 and Law No. 92/2014, presented on October 28, 2026, and under review by the Economic Committee. Statements by the Minister of Finance in the Economic Committee, November 3–5, 2026.
