H1 2026 Close. What should your business check now

Today marks the end of the first half of 2026. For a business, this is one of the few moments when there is still time to intervene before the end of the fiscal year. Intervention can be to avoid exceeding fiscal limits or to reduce taxes.

Many businesses analyze their financial statements only once a year, at the time of the balance sheet. At that point, a missing invoice, an overdue payment, or a transaction that has exceeded a threshold become difficult to correct.

This guide is a mid-year checkpoint. It contains a practical checklist for the coming days, an accurate overview of the 2026 tax changes, and clarification on whether to remain an individual or switch to a limited liability company.

Read also: Expected legal changes in taxes for 2026

Five points to check before July

Before we move on to the legal changes, it's worth looking at the situation within your business. We review these five points with every client mid-year, and each one is linked to a specific figure.

1. The walk against the two main thresholds

In the Albanian tax system, two figures determine how a business is taxed.

• 10 million lekë is the VAT threshold. Below this value, a business is outside the VAT scheme. As soon as it is exceeded, there are 15 days to register.
• 14 million lek is the threshold for profit tax. Up to this amount, profit tax is 0% until December 31, 2029, whether for an individual or for an LLC. Above 14 million lek, the tax is 15% on the profit, and 23% on the portion of profit above 14 million lek for individuals.

If the pace of the first half of the year indicates that the business is approaching one of these thresholds, it's better to plan now. For example, a business with a turnover of 11 million lek today does not pay profit tax. If it exceeds the threshold without anticipation, it may enter the VAT scheme or face a liability that could have been prepared for differently.

2. Documentation of expenses

Expenses without proper documentation are not recognized and increase taxable profit. Mid-year is a suitable time to verify if the expenses for the first half of the year are covered by invoices.

3. Declaration Deadlines

The tax system registers delays almost immediately. If a declaration is not submitted on time, the non-submission is recorded the day after the deadline, and an automatic fine or a provisional assessment can be generated. Keeping deadlines in check completely avoids this cost.

4. Cash advances

As of January 1, 2026, cash payments between two businesses cannot exceed 100,000 lek, while for individuals the limit is 500,000 lek. It is worth checking if the way you pay suppliers and collect from customers is within these limits, as exceeding them will incur penalties even if the transaction is regular.

5. Unpaid obligations and fiscal amnesty

For old tax or customs liabilities, 2026 offers opportunities relief. Some of them expire within the year. Therefore, the second half of the year is the right time to assess the situation and evaluate if you can benefit.

All five of these points are part of what an external economist does throughout the year. This is the value of a Subscription. Numbers and deadlines are reviewed by you month after month, so that nothing is revealed at the end of the year when it's too late.

Fiscal Changes 2026

The year 2026 brought some changes. Some are in effect today. One is still a draft law. We divide them into two groups, so it is clear what is being implemented now from what is still in progress.

Effective today

It is worth recalling at the outset a relief that matters for most businesses. The profit tax for businesses with turnover of up to 14 million lek is 0% until December 31, 2029. The annual return remains mandatory even when the tax is zero.

• Profit tax 0% until the end of 2029 on turnover up to 14 million lekë. It applies equally to natural persons and LLCs. Read more: Zero Tax Until 2029 in Albania: Who Benefits and How It Works.
• Minimum wage increases from 40,000 Lek to 50,000 Lek. According to the contributions and payrolls of every business with employees.
• The limit for cash payments dropped from 150,000 Lek to 100,000 Lek between businesses, and a limit of 500,000 Lek was set for individuals.
• Fiscal truce. Possible agreement with the tax administration for businesses with a turnover over 14 million lek. Read more: Fiscal Peace Agreement 2026, Practical Guide and Application Deadline.
• Writing off and settling old debts, with conditions and deadlines by 2026.
  Read more: Tax Amnesty 2026 and Forgiveness of Tax Penalties: A Complete Guide under Law No. 86/2025 and Directive No. 11/2026.
• Assets re-evaluated at a rate of 5%. The request must be submitted by 2026. Read more: Revaluation of Real Estate: Deadlines, Forms, and Calculation of the 5% Tax (Instruction No. 5/2026)
• VAT compensation of 10% for farmers selling to certified collectors or agritourism operators.
• Declaration of Self-Employment Status. New self-declaration on the nature of work and method of cooperation. Affects freelancers and the self-employed.

End of draft law, not in effect

New real estate tax. On June 17, 2026, it was published for Public consultation of the bill which transitions property taxation from reference values to approximate market value. Comments are accepted until July 15, 2026, on the platform konsultimipublik.gov.al, under consultation no. 995. The draft law is still in the consultation phase, and implementation is foreseen several years later, so today it does not bring a new obligation. However, for businesses with owned property, it is worth following.

The list is extensive and not every point affects every business. Part of our service is precisely to clarify which of these changes affect your specific business and what action each requires.

Natural person or LLC.

The legal form of a business is not a requirement tied to turnover. A business can remain a sole proprietorship even when it grows significantly, because profit tax does not depend on the legal form but on turnover. In Albania, there are businesses with high incomes that continue to be sole proprietorships.

Therefore, the transition to LLC is a decision that is assessed on a case-by-case basis, not a mandatory step. The elements that determine it are these.

• Responsibility. The individual is liable with their personal assets for business debts. LLC separates business assets from personal ones.
• Dividend tax. When the company distributes profit to its partners, 8% tax is withheld at source. A natural person does not have this step, but they also do not have asset allocation.
• Administrative costs. LLCs require full accounting and more administrative obligations.
• Reliability. Some large clients, tenders, or banks value LLCs as a more structured form.

The right answer depends on the turnover, risk level, clients, and growth plans. This decision is best weighed with your business numbers on the table, and we can help you calculate which form has the lowest total cost.

Open for the moment

1. Compare the first six-month turnover with the thresholds of 10 and 14 million lek.
2. Verify that all expenses are covered by documentation.
3. Ensure that no declaration deadlines remain open.
4. Check if cash payments are within the new limits.
5. If you have old obligations or are considering a change of form, schedule a consultation before the year is over.

Why it Matters

The end of the year is the last period when an intervention still has an effect for this year. An issue identified in June is resolved on time and at a lower cost. The same issue discovered at year-end costs more, or cannot be corrected. The role of the external accountant is not simply to deliver a statement. It is to monitor these elements for you throughout the year, so that the business is always prepared.

Frequently asked questions

Does every business pay profit tax?

No. Businesses with annual turnover up to 14 million lek have a 0.3% profit tax until December 31, 2029, whether they are sole proprietorships or LLCs. Above this threshold, the tax is 15% on profit and 23% on the portion of profit exceeding 14 million lek for individuals. Filing the declaration remains mandatory even when the tax is zero.

Is it mandatory to switch to a Limited Liability Company (LLC) when a business grows?

Yes. A business can remain a sole proprietorship even when it grows, because its tax status is not determined by its legal form. The transition to an LLC is usually for reasons like liability or credibility, and it is not a legal requirement tied to revenue.

What happens if a declaration is not submitted on time?

The system registers non-submission almost immediately and can impose an automatic fine. Keeping to deadlines regularly avoids this cost.

Should something be done about the new property tax now?

Not a payment yet, as the bill is still in consultation. But for businesses with property, it's worth following, and feedback can be submitted until July 15, 2026. We can help you understand how property would be taxed under the new direction.

Is an economist needed if the tax is 0%?

A low tax rate does not remove other obligations. Insurance contributions, VAT when you are a subject, invoice fiscalization, periodic declarations, and annual financial statements remain mandatory. An external economist keeps these in order.