- Corporate income tax could rise from 15% to 17%, and dividend tax from 8% to 15%. Individual traders are not affected.
- The threshold for mandatory VAT registration may be lowered from 10,000,000 to 5,000,000 lek annual turnover.
- 14 basic food categories could have VAT set at just 6%, while the standard rate could rise from 20% to 21%.
- If your gross salary is under 700,000 lek per month, the tax is slightly lower. Above that amount, the tax increases.
From January 1, 2027, the corporate income tax may rise from 15% to 17%, Standard VAT from 20% to 21%, and the mandatory VAT registration threshold may be lowered from 10,000,000 to 5,000,000 lek annual turnover. On the other hand, your salary may be taxed more lightly if it's under 700,000 lekë per month, and 14 categories of basic food items may be subject to VAT at only 6%.
Businesses often wait for the final text to get informed, and in doing so they lose the time they need to prepare. We read the draft bills and the official explanatory memorandum ourselves—not third-party reports—so you have the exact figures today, with the concrete impact on your business, your dividend, and your salary.
As of October 27, 2026, these are still draft bills in Parliament and a government decision in consultation, not yet law in force, and may change before the final vote. The points below show what happens and how it affects you in terms of cost or relief, in lek.
Read also: Tax legislation
What is proposed for the tax on profit and dividends?
The government proposes raising the corporate income tax, Ltd and Plc, from 15% to 17%, and the consolidation of the dividend tax at 15%, with no costs deducted, up from 8% today. The individual trader is not affected at all, because his profit tax remains governed by another provision of the law, untouched by this draft law. According to estimates by economic media, not the bill itself, the two changes together could bring in about 8 billion lek additional revenue per year for the budget.
| Tax | Current rate | Proposal |
|---|---|---|
| Profit Tax | 15% | 17% |
| Dividend tax | 8% | 15% |
For a company with a pre-tax profit of 1,000,000 lek, this means an additional 20,000 lek in business-level tax. Plus higher tax when the partners withdraw the dividend.
The draft law also introduces a change that provides relief, not just burdens. A new exemption from personal income tax is added for blind persons, paraplegic and tetraplegic individuals, persons with deaf-muteness, and work-related invalids.
What is proposed for VAT?
The new VAT registration threshold
The proposal lowers the mandatory VAT registration threshold from 10,000,000 lekë to 5,000,000 lekë in annual turnover. According to the official Ministry of Finance report dated October 26, 2026, this would bring 17,516 new businesses into the VAT system and approximately 4.5 billion lek additional annual revenue for the budget.
According to the report, the current Albanian threshold of 10,000,000 lek, around €108,696, is the highest in the region and exceeds the cap of the European Union directive itself, €85,000. By comparison, Italy applies the same €85,000, Greece only €10,000, and Kosovo and Montenegro €30,000 each. New businesses will pay the standard rate of 211 TP3T, unless they qualify for a reduced rate.
VAT rates: what's going up and what's going down
The standard VAT rate is proposed to be raised from 20% to 21%. The reduced rate for accommodation services in lodging establishments—namely hotels, resorts, and certified agritourism facilities—is proposed to be increased from 6% to 10%.
Conversely, the draft law adds a new rate of 61% for 14 categories of basic foods that currently pay 201%: bread and flour, milk and plain yogurt, eggs, rice, pasta, cooking oil, chicken, beef or pork, basic fish, fresh fruit, fresh vegetables, legumes, sugar, and basic infant foods. The detailed list of products within each category will be determined by a separate decision of the Council of Ministers.
What is proposed for the employee payroll tax?
Today, Gross salary is taxed. at 131 TP3T up to 200,000 lek per month, and at 231 TP3T above that amount, since a fixed annual deduction of 360,000 lek is calculated from the taxable base. This deduction remains the same in the draft law as well; in both cases the law officially states it on an annual basis, and we have converted it here into monthly figures for ease of reading.
The real change is in the brackets themselves. The bracket with a rate of 13% is expanded to 300,000 lek per month, up from 200,000 lek today. A new bracket with a rate of 32% is also added for the portion of salary above 700,000 lek per month, a bracket that does not exist today.
Example calculation for different wages
| Gross monthly salary | Tax today | Tax as proposed |
|---|---|---|
| 300,000 lek | 45,100 lek | 35,100 lek |
| 500,000 lek | 91,100 lek | 81,100 lek |
| 700,000 lek | 137,100 lek | 127,100 lek |
| one million lek | 206,100 lek | 223,100 lek |
Employees earning up to about 811,000 lek per month will pay less tax under the proposal. Above that amount, the tax will be higher than it is today because of the new 321 TP3T bracket.
How does it affect a specific business or employee in practice?
The figures above make full sense when viewed in a profile that closely resembles your reality. Below are four simple cases, with rounded figures, illustrating both the easing and the burdening aspects.
If you have a trading business with annual turnover of up to 10,000,000 lek.
Today, if your annual turnover is under 10,000,000 lek, you are not registered for VAT. Buy and sell without charging VAT.
Under the proposal, the threshold is lowered to 5,000,000 lek. If your turnover is between 5,000,000 and 10,000,000 lek, you will have to register.
Let's put it in numbers, with simple assumptions for illustration. Let's take a grocery store with annual revenue of 7,000,000 lek, within the new threshold, and annual merchandise purchases of 4,500,000 lek, mostly from the 14 basic categories with a 6.1% VAT.
| Indicator | Today, no registration | With the proposal |
|---|---|---|
| VAT on sales, 6% | Not counted | 420,000 lek |
| VAT deductible on purchases, 6% | Not negotiable, becomes cost. | 270,000 lek |
| Net VAT for the budget | zero lek | 150,000 lek per year |
Registration also brings additional administrative work, tax invoices, records, and monthly reporting, which typically increases the cost of accounting services by a few thousand lek per month. For most basic food products, the 6.1% rate remains low, so the impact on the final price for the customer is expected to be small.
If you have a company with annual profits and you withdraw dividends
Let's take the example of a company with an annual pre-tax profit of 2,000,000 lek, which pays the entire remaining amount to the partner as a dividend.
| Indicator | Today | With the proposal |
|---|---|---|
| Profit before tax | Two million lek | Two million lek |
| Profit Tax | 300,000 lek, 15% | 340,000 lek, 17% |
| Possible dividend | 1,700,000 lek | 1,660,000 lek |
| Dividend tax | 136,000 lek, 8% | 249,000 lek, 15% |
| Total tax | 436,000 lek | 589,000 lek |
| In hand, net | 1,564,000 lek | 1,411,000 lek |
From the same profit of 2,000,000 lek, you'll receive 153,000 lek less than you do today.
If you are employed or employ someone with a gross monthly salary
An important note. The figures in the tax packages always refer to gross pay, that is, before contributions and taxes are deducted, not to the pay you actually receive in your hand. Social security and health insurance contributions are not affected by this proposal. Therefore, the change in your net pay is exactly the same as the change in tax calculated below.
| Gross monthly salary | Tax today | Tax as proposed |
|---|---|---|
| 400,000 lek | 68,100 lek | 58,100 lek |
| 900,000 lek | 183,100 lek | 191,100 lek |
With a gross salary of 400,000 lek per month, tax is reduced by about 10,000 lek each month, which goes directly to your net pay. With a gross salary of 900,000 lek per month, tax increases by about 8,000 lek each month.
The dividing line between the two is about 811,000 lek gross per month. Below that figure, net pay rises slightly; above it, it falls slightly. No one with a salary below this threshold has any reason to worry; on the contrary.
If you have some employees with different salaries
Most of our businesses have multiple employees, not just one, so the real impact depends on the entire pay structure, not on a single salary. Let's take a team of five employees with gross monthly salaries ranging from 80,000 to 900,000 lek.
| Employee | Gross salary | Tax today | Tax with the proposal |
|---|---|---|---|
| Employee 1 | 80,000 lek | 6,500 lek | 6,500 lek |
| Employee 2 | 150,000 lek | 15,600 lek | 15,600 lek |
| Employee 3 | 250,000 lek | 33,600 lek | 28,600 lek |
| Manager | 400,000 lek | 68,100 lek | 58,100 lek |
| Director | 900,000 lek | 183,100 lek | 191,100 lek |
| Total | 1,780,000 lek | 306,900 lek | 299,900 lek |
For this team, the monthly payroll tax bill falls by a total of 7,000 lekë, even though the director, with the highest salary, pays 8,000 lekë more. The reduction for the employee earning 250,000 lek and the manager earning 400,000 lek exceeds the increase for the director. The real impact on the business depends precisely on this structure, not on a single salary.
What is not yet known and what needs to be done now.
As of October 27, 2026, the two main draft laws are before Parliament, awaiting committee review and a final vote. The decision to lower the VAT threshold is still under interministerial consultation. Neither has become law yet, and both could change before approval.
Objections from the business world are strong and numerous, not just from a single actor. The Tirana Chamber of Commerce and Industry has publicly called for the suspension of tax increases. and a genuine dialogue with business. The Union of Albanian Producers says that changes are coming without real consultation. and can curb investments and competitiveness. Businesses themselves value them. the total additional burden is about 85 million euros per year. This shows that the package can still change before it leaves Parliament.
At the moment, there is no reason for a business to change prices, wages, or investment plans based on the draft laws as they stand today, since the parliamentary committees may still amend them. There are good reasons to know them in advance, especially if you're close to the new VAT threshold or pay salaries above 700,000 lekë per month. That way, you can factor them into your planning for 2027.
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 notificationsFrequently asked questions
Is the 2027 fiscal package an enacted law?
No. As of October 27, 2026, two of the draft laws—the income tax and the VAT—have been approved by the Council of Ministers and registered with the Assembly, where they await committee review and the final vote. The decision to lower the VAT threshold is still under interministerial consultation. None of the three instruments has yet become law or taken effect.
When does the 2027 tax package take effect?
The texts of both draft laws provide for them to enter into force 15 days after publication in the Official Gazette, with effects as of January 1, 2027. This date remains the target of the current draft and may change if the Assembly postpones or amends the text during review, so it is not yet certain.
How does the tax on my salary change under the proposal?
According to the draft, salaries up to about 811,000 lek per month pay less tax, mainly due to the expansion of the 13% tax bracket up to 300,000 lek. Above that amount, the tax increases because of the new 32% bracket.
Does my business have to register for VAT now?
Not yet. The current threshold of 10,000,000 lekë remains in effect until it is changed by an official act. Businesses with turnover between 5,000,000 and 10,000,000 lek should simply keep it in mind for their 2027 planning, especially now that the decision is under interministerial consultation and could be approved quickly.
What should my business do now?
Keeping information up to date and planning ahead without yet changing prices, wages, or declarations based solely on the draft bills as they currently stand in Parliament. AlProfit monitors developments and notifies clients as soon as there are changes to the text during parliamentary review or when it is finally approved.
Where can one follow the official development of the 2027 tax package?
In the Public Consultations Register, konsultimipublik.gov.al, where every draft law is published for consultation before approval, and in the Official Gazette, qbz.gov.al, after final approval.
