Instruction No. 9, dated March 12, 2026 (income tax changes, March 2026) amends several points of General Instruction no. 26/2023, which regulates the enforcement of law no. 29/2023 “For income tax.” Some of the changes are corrective. Others directly affect how the self-employed, sponsoring businesses, and employers with voluntary pension plans declare and pay taxes.
You can work as self-employed, set your own schedule, and choose your clients. But if 80% of your income comes from a single client, Albanian law may consider you an employee. Taxes differ. Obligations differ.
This article explains what changes, who is affected, and what is specifically required.
Self-employment and declaration of status
This is the change with the broadest impact. It affects independent professionals: consultants, IT, lawyers, architects, and any self-employed individual who derives most of their income from a limited number of clients.
Law No. 29/2023 parashikon se të ardhurat e vetëpunësuarit mund të riklasifikohen si të ardhura nga punësimi nëse 80% ose më shumë e tyre merren nga një klient i vetëm, ose nëse 90% ose më shumë merren nga më pak se tre klientë, sipas nenit 12, shkronja “ç” të ligjit. Ky riklasifikim ka pasoja tatimore konkrete. Të ardhurat nga biznesi tatohen me normën 15% deri në 14 000 000 lekë në vit, sipas nenit 24, pika 2 të ligjit. Të ardhurat nga punësimi tatohen me normën progresive 13% deri në 2 040 000 lekë dhe 23% mbi këtë kufi, sipas nenit 24, pika 1. Për një profesionist me të ardhura të mesme, diferenca është e ndjeshme.
Article 12, letter “ç”, Law no. 29/2023 “Income earned by a self-employed individual if: i. 80 percent or more of the earned income is derived directly or indirectly from a single client; or ii. 90 percent or more of the total income earned is derived from less than 3 clients.”
March 2026 Directive expand the procedure that allows the self-employed to avoid this reclassification through self-declaration.
How self-declaration works
The self-employed person submits the “Self-Employment Status Declaration” to the regional tax office where they are registered. This document is completed according to the model in Attachment no. 1 of the law and is submitted together with the annual business income tax return, by March of the following tax year.
Download the form here
The deadline for tax year 2025 is within March 2026, including declarations submitted by March 31, 2026.
Through this declaration, the self-employed person certifies that they are not in conditions of tax evasion, regardless of the clientele structure. Until a contrary assessment by the tax administration, the income is treated as business income.
Instruction no. 26/2023, amended “The above rule shall not apply in cases where a self-employed individual, despite their income meeting the criteria defined in point ‘ç’, sub-points ‘i’ and/or ‘ii’ of point 1 of Article 12 of the law, self-declares that they are not subject to employment income.”
Practical examples
Marko është zhvillues software i pavarur. Gjatë vitit 2025, 85% e të ardhurave të tij kanë ardhur nga një kompani e vetme. Numerikisht plotëson kriterin e riklasifikimit. Megjithatë, Marko punon me kompjuterin dhe mjetet e tij, vendos vetë orarin, mund të refuzojë projekte dhe faturon njëkohësisht dy klientë të tjerë. Ai dorëzon Deklaratën e Statusit të Vetëpunësuarit brenda marsit 2026. Deri në një vlerësim të kundërt, të ardhurat e tij trajtohen si të ardhura nga biznesi.
Besa is a marketing consultant. She works from her home office with her own computer and programs. During 2025 she had three clients, but 91% of her income came from two of them. She chooses her own projects, negotiates her fees, and does not have a set schedule imposed by any client. She files a tax return and her income is treated as business income.
Landi is an architect. He has a contract with a design firm and earns 88% in income from it. He works every day at the firm's premises, using the firm's software, according to its schedule and procedures. Projects are assigned by the technical director, and Landi cannot refuse them. Even if he files a declaration, the tax administration has a strong basis for reclassification because his economic behavior is identical to that of an employee.
Arjani is a freelance accountant. He works with three different clients, each up to 40% of total revenue. He does not meet any of the numerical criteria. Reclassification is not an issue and a declaration is not required.
What does the tax administration value
Submitting the declaration is not enough. The tax administration analyzes the real nature of the economic relationship. The main factors are dependence on the contractor's equipment and materials, imposed schedule, lack of personal financial risk, and inability to delegate or substitute.
If avoidance is detected, the tax administration has the right to reassess and recharacterize.
Who doesn't need this statement
Self-employed individuals who provide services exclusively to non-residents or to entities without a permanent establishment in Albania are not required to file a declaration. They are automatically considered to have business income, according to the last paragraph of Article 12, letter “ç” of the law.
Read also: Why Freelancers Should Register as Individuals with TIN: Tax Effects, Risks, and the 2029 Deadline.
Sponsorships: Tax Treatment for the Donor and the Recipient
The March 2026 directive clarifies the tax treatment of sponsorships for both parties.
Natural person as beneficiary
Income from sponsorships for individuals is not subject to personal income tax, but this exemption is not unlimited. The legal basis is Article 11, letter “g” of Law no. 29/2023, inserted by law no. 81/2025.
Article 11, letter “g”, Law no. 29/2023 “Income from sponsorships up to the amount determined in letter ‘p’, of point 1, of Article 50, of this law” are not subject to personal income tax.
The exclusion applies only to the extent that the sponsor can recognize it as a deductible expense. Any amount exceeding that limit is taxed at a rate of 15%.
The sponsor is required to issue a certificate specifying exactly which part is recognized as exempt and which is taxable. Without this certificate, the entire amount is considered taxable.
Pika 11.10, Instruction no. 26/2023, as amended “In the absence of complete and valid documentation, or when it is determined that the legal limitations for recognizing sponsorship as a deductible expense for the sponsor are not met, the entire amount or the relevant part is considered taxable income for the beneficiary.”
The documentation that the beneficiary natural person must keep includes the sponsorship contract, the bank payment document, and the sponsor's certificate.
Practical example
The company “AlphaNet” LLC has a profit before tax of 10,000,000 ALL. During the year 2025, it sponsored two athletes: athlete A with 600,000 ALL and athlete B with 100,000 ALL.
The maximum deductible amount for sports activities is 5% of profit before tax, meaning 500,000 ALL. The total sponsored amount is 700,000 ALL, thus 200,000 ALL exceeds the limit.
Proportional distribution is done as follows. Athlete A benefits from 428,571 lekë as exempt income and 171,429 lekë as taxable income. Athlete B benefits from 71,429 lekë as exempt income and 28,571 lekë as taxable income. Each athlete receives a separate certificate with these figures. Without a certificate, the entire amount is considered taxable.
Entities are beneficiaries
The same rule applies to entities, according to Article 40, point 1/1 of the law, as amended by Law no. 81/2025.
Article 40, paragraph 1/1, law no. 29/2023 “Income from sponsorships up to the amount determined in letter ‘p’, of paragraph 1, of Article 50 of this law, is not considered taxable corporate income.”
Shuma brenda kufizimit ligjor nuk konsiderohet e ardhur e tatueshme. Shuma që tejkalon kufirin tatohet me normën 15%.
Changes in deduction limits for the sponsor
The instruction brings two important clarifications.
And for: the calculation base shifts from taxable profit to profit before tax. This changes the actual value of the threshold, especially for businesses with significant tax expenses.
Second: the list of sports activities now explicitly includes sports organizations, Olympic committees, and high-level athletes with merit titles, pursuant to Article 50, paragraph 1, letter “p” of the law.
Article 50, paragraph 1, letter “p”, law no. 29/2023, as amended The deductible limits for sponsorships are: up to 5% of profit before tax for sports, literary, scientific, and artistic activities; up to 5% for research and development; up to 3% of profit before tax for sponsorships of other activities not included in the above categories.
| Sponsorship category | Downloadable limit |
|---|---|
| Publishing, literary, scientific, artistic activities | 5% profit before taxes |
| Sports organizations (teams, federations, Olympians, titled athletes) | 5% profit before taxes |
| Research and development | 5% profit before taxes |
| Other activities | 3% and profit after tax |
Foreign artists and the 24-month tax residency
Artists who are not Albanian citizens are not considered tax residents in Albania for 24 months from their first entry, according to Article 8, letter “dh” of law no. 29/2023. The period is not interrupted and does not restart with later entry and exit.
Article 8, letter “dh”, law no. 29/2023 “Artists who are not citizens of the Republic of Albania shall not be considered tax residents in the Republic of Albania for a period of 24 months from the date of their first entry into the territory of the Republic of Albania, regardless of the number of days of stay.”
During this period, the artist is taxed only on income sourced in Albania, at the rate of 15% tax withheld at source, according to Article 58, paragraph 2 and Article 59 of the law.
Article 59, law no. 29/2023 “The rate of tax withheld at source on income and payments according to Article 58 of this law is 15%.”
After the completion of 24 months, the tax residency status is determined according to the general rules of Article 8. At the request of the tax administration, the artist must submit documentation proving the first entry and the period of stay.
Interest limitation and correction of the EBITDA formula
The instruction corrects the calculation of EBITDA, which serves as the basis for limiting interest deductions under Article 30 of the law. The limit remains 30% of EBITDA, but the calculation method changes.
According to the previous formulation, EBITDA was calculated starting from income subject to tax. According to the new formulation, the base is profit before tax.
Article 30, paragraph 2, law no. 29/2023, as amended by the instruction “Earnings before interest, taxes, depreciation, and amortization (EBITDA) are calculated by adding to the profit before tax the amounts adjusted for tax on excess interest, as well as the amounts adjusted for tax on depreciation and amortization. Tax-exempt income is also excluded from the entity's EBITDA.”
For businesses with tax-exempt income, the actual value of the limitation may be lower than previously applied, as this income is also excluded from EBITDA. Businesses that have applied the limitation during 2025 should verify if the calculation was done according to the new wording.
Voluntary pension and clarification on who makes the contribution
The deduction from the employee's personal income for voluntary pension fund contributions is applied regardless of whether the payment is made by the employer, by the employee themselves, or by any other contributor on behalf of the employee, according to Article 20 of the law.
Article 20, paragraph 1, Law no. 29/2023 “The contribution made by each member of a private pension fund is deducted from his personal income for tax purposes.”
Paystub item 26 has been reformulated to reflect this clarification. Supporting documentation that the employer must retain includes the contract with the pension fund and the annual certificate issued by the fund.
The certification must be submitted no later than January 20th of the following year.
An employee with two employers, one of whom is the state
When an employee has two employment relationships and one is in public administration, the personal status declaration is submitted to the public employer, according to point 66.1.1 of the amended directive.
Pika 66.1.1, Instruction no. 26/2023, as amended, states: “In cases where an employee has more than one employment and one of them is in state administration, for the purposes of applying monthly deductions through the centralized payment system, the personal status declaration is submitted to the employer in state administration.”
The private employer applies the progressive rate of Article 24 but without the personal deductions of Article 22.
Terminology: “virtual means” becomes “crypto-asset”
Wherever the term “virtual currencies” appears in the instructions, it should be replaced with “crypto-assets.” This change reflects the terminological modification made by Law no. 81/2025 and does not introduce any alteration to the tax treatment of transactions.
Read also: Cryptocurrencies and Their Use.
What to check after the guideline is published
If you are self-employed and 80% or more of your income comes from a single client, check if you need to file Self-Employment Status Declaration for tax year 2025.
If your business sponsored activities during 2025, verify if the limit was calculated on profit before tax and if you issued an accurate certificate to each beneficiary.
If you have received sponsorship as an individual, check if you have the confirmation from the sponsor and if you have correctly declared the taxable portion.
If you apply the EBITDA restriction, review the calculation according to the new formulation.
If you have employees who declare contributions to a voluntary pension fund, check if box 26 of the payslip is filled out according to the new wording and if you have the annual certificate from the fund, which must be submitted by January 20, 2026.
Frequently asked questions
Does the Declaration of Status need to be submitted every year?
Delivery is made every tax year, by March, along with the annual declaration. It is not a document that remains automatically valid for subsequent years.
Does the declaration protect from reclassification?
Automatically. The declaration serves as an assessment tool. If during an audit it is found that the economic relationship has the characteristics of employment, the administration may reclassify the income regardless of the declaration.
How is the limit calculated when a sponsor has given sponsorships to multiple beneficiaries?
The limit applies to the total amount of sponsorships for the respective category. If the total exceeds the limit, the amount recognized as deductible is distributed proportionally among the beneficiaries, as per the example above.
Does anything change for businesses with incomes under 14 million Lek?
Regjimi preferencial me normën 0% të tatimit mbi fitimin, i parashikuar në nenin 69, pika 1, shkronja “dh” të ligjit nr. 29/2023, mbetet i pandryshuar deri më 31 dhjetor 2029.
Is the 24-month period for all foreign artists?
However, for every non-Albanian artist, regardless of visa type or residence permit. The only criterion is the first entry into Albanian territory for the exercise of artistic activity.
What is a pre-declaration of crypto assets?
The replacement of the term is terminological. The obligation to declare, the calculation basis, and the tax rates remain the same.