Store and retail accounting. Why tax thresholds are measured based on turnover.

Store accounting has a rule that many merchants only discover when they receive their first notice. The two most important thresholds of the tax system are measured on turnover. Profit is not taken into account. Therefore, a low-margin store falls under VAT and loses the zero-rate tax status long before it feels like a big business.

Retail accounting is the record-keeping of a business that buys goods and resells them to the end consumer, using a cash register, a fiscalized invoice, and shelf inventory. It differs from service accounting in three respects. The merchandise is paid for before it's sold, turnover is high compared to profit, and cash comes in mainly at the register.

This guide is written for the neighborhood store, the convenience store, the clothing store, the home appliances store, and any other retail outlet. It follows the order in which the entrepreneur encounters them. It starts with the legal structure and moves on to the cash register, inventory, staff, deadlines, and control.

Read also: Mandatory POS, who must equip themselves with a terminal and by when.

Individual or company for a store

Most small shops start as Sole Proprietor. Registration is done at the Business Registry through e-Albania, free of charge and within one day. The owner is personally liable for the business's obligations.

Society with limited liability It separates the business's assets from those of its partner. It files financial statements with the QKB every year. There is also a second tax when profits are distributed, an 8.1% tax on dividends.

In capital gains tax, the difference between the two forms is smaller than you might think. Both benefit. the zero rate until December 31, 2029 when annual turnover does not exceed 14,000,000 lek. Above that threshold, the company pays 151 TP3T. A natural person pays 151 TP3T on up to 14,000,000 lek of taxable profit and 231 TP3T only on the excess.

Therefore, the choice of store depends more on two practical questions: Will you open more than one sales outlet, and will a partner join the business? When the answer is yes, the company maintains a clearer separation of money and responsibility.

At the QKB, the object of the activity and the NVE code are declared. Retail trade is in group 47 of section G of the nomenclature. The most frequent codes are 47.11 for non-specialized stores predominantly selling food, 47.19 for non-specialized stores not predominantly selling food, 47.71 for clothing, and 47.72 for footwear and leather goods.

The code is not a formality. It shows what the inspector expects to find when they enter the store. In some cases, it even determines whether you need a license.

Licenses and permits a store needs

Retail trade as a rule does not require a license. Law No. 10081/2009 starts from the principle that activities are free, except for those it enumerates itself. A clothing store, bookstore, or household goods store usually operates under a NIPT and with Municipal licenses.

The main exception is food. A store that sells food is a food business operator and falls under the control of the National Food Authority. Specially regulated goods, such as tobacco, fuel, or medicines, also have their own conditions. Before placing them on the shelf, the QKB license register for the relevant category is checked.

Here there is a change that must be stated openly. Law No. 61/2026 on official controls repealed Article 19 of the Food Law, which regulated the licensing and registration of food establishments. We have not yet read the new registration regime in the text, so we do not describe it here.

The municipality sets local taxes and fees, such as the sign tax and the cleaning fee. The levels are determined by the municipal council, so there is no national figure. They are asked for before the lease is signed, not afterward.

Cash register, invoice, and the in-store POS

When the invoice is issued at the register

The invoice is issued at the time of sale. It is only valid once it receives the NIVF from the platform. fiscalization, pursuant to Article 20 of Law No. 87/2019. A cash register that prints a receipt without sending it to the platform has not invoiced; it has only printed.

When the internet goes down, the invoice is issued without VAT and is fiscalized within 48 hours of the interruption, in accordance with Article 29 of the same law. When the device itself breaks down, the deadline is 5 days for repair and another 5 days for sending the invoices, in accordance with Article 30.

The buyer's data are recorded whenever the buyer is a business and on every invoice over 500,000 lek. In the store this happens rarely. However, it does occur, for example when a business client buys for their office or their own establishment.

Who needs a POS terminal and who is exempt

Any taxpayer who makes cash sales must be equipped with a POS terminal by December 31, 2026, in accordance with Article 59/3 of Law No. 9920/2008. The article was added by Law No. 79/2025. The deadline was reconfirmed by the notice of the General Directorate of Taxes dated September 21, 2026.

A terminal is required at each point of sale, not one for the entire business. Two stores require two terminals.

There are three exemptions. The area without internet coverage, the entity exempt from the invoice obligation, and the self-employed person who works alone, outside the scope of VAT, at a single location. It is enough to hire one salesperson, and the third exemption is lost.

How much money can you keep in the vault?

The law has two boundaries that are often confused. The first is Cash payment limit, 100,000 lek between two businesses and 500,000 lek between a business and an individual, as of January 30, 2026. The second is the cash limit, that is, how much physical cash you hold at the end of the day.

The cash limit depends on turnover. It is up to 150,000 lek when annual turnover is under 2,000,000 lek, and up to 500,000 lek when turnover is between 2 and 10 million lek. Above 10 million, the limit is 500,000 lekë or 51% of turnover, whichever is higher. Any funds exceeding the limit are deposited in a bank.

At the store, the cash payment limit applies mainly to purchases, not sales. When you pay a supplier in cash for an invoice exceeding 100,000 lek, the penalty is 101 TP3T of the transaction, according to Article 120 of Law No. 9920/2008. Splitting the payment into multiple installments doesn't solve it, because the limit is measured per transaction.

Read also: Online Sales Under Tax Authority Control: How to Get in Compliance

VAT and income tax when thresholds are measured on turnover

The obligation to VAT It arises when annual turnover exceeds 10,000,000 lek. The application for registration must be made within 15 days of exceeding the threshold, in accordance with Article 122 of Law No. 92/2014. After registration, the sales and purchase books are submitted by the 11th, while the declaration and payment are due by the 14th of the following month.

The zero rate of profit tax applies when annual gross revenue does not exceed 14,000,000 lek, according to Article 69 of Law No. 29/2023. The threshold is measured on turnover excluding VAT and functions as a full threshold. Exceeding it by even one lek subjects the entire year's profit to the regular rate.

In a consulting firm, $14 million in revenue usually means a large profit. In a retail store, the same revenue might yield only a modest profit, because most of it is the cost of goods. That's why the store hits zero margin long before it feels like a big deal.

Calculated example. Two stores, a million in revenue difference.

Store A sells goods for 13,500,000 lekë per year, excluding VAT. The cost of goods sold is 10,800,000 lekë. Rent, wages, and other expenses are 1,700,000 lekë. The profit is 1,000,000 lekë and the tax on profit is zero.

Store B has the same prices and the same margin, but sells a bit more, 14,500,000 lekë. The cost of goods rises to 11,600,000 lek, while other expenses remain at 1,700,000 lek. Profit is 1,200,000 lek and the 15% tax is 180,000 lek.

So an extra one million lek turnover brought an additional 200,000 lek in profit and 180,000 lek in tax. This is no reason to hide sales, because the risk of a fine is much higher. It's a reason to track turnover month by month. That way, decisions on pricing and year-end purchases are made with the figures in hand.

Both stores are also VAT-registered because they have exceeded 10,000,000 lek. This means that the price on the shelf includes 20% VAT. An item sold for 1,200 lekë brings the store 1,000 lekë, while 200 lekë go to the budget, since the VAT paid on purchase is deducted.

When the previous year ends with zero tax, prepayment installments do not arise. They begin when there is tax from the preceding year and are paid on March 31, June 30, September 30, and December 31, in accordance with Article 63 of Law No. 29/2023.

Read also: Does it make sense to register for VAT when you're not required to?

Inventory, returned goods, and losses

This is the block where the store is separated from every other activity. In a service, the main cost is labor. In the store, the main cost lies on the shelf and in the warehouse. The year's profit depends directly on how it is measured.

What cost is the goods on the shelf measured by?

National Accounting Standard No. 4 requires that inventory be measured at cost. Cost includes the purchase price and the costs to bring the goods to their current condition and location. For goods that are frequently purchased at varying prices, cost is calculated using weighted average or the first-in, first-out (FIFO) method.

Paragraph 22 of the standard also allows the retail method. It measures cost by subtracting the gross margin percentage from the sale price of the goods. For a store with hundreds of items, this is often the most practical method, provided that the result approximates cost.

Once selected, the method remains unchanged for five years. A change during this period creates Tax adjustment and questions at the hearing, pursuant to Article 52 of Law No. 29/2023.

When the merchandise loses value before it is sold.

On the reporting date, inventory is tested for impairment in accordance with paragraph 23 of IFRS 4. The inventory is carried at the lower of cost and expected selling price, less costs to sell.

In the store, this covers three common cases: last season's merchandise, merchandise approaching its expiration date, and damaged merchandise on the shelf. According to paragraph 25, the discount is calculated on a like-for-like basis, or for groups of similar items when a like-for-like calculation is not practical.

Last winter's jackets cost 400,000 lek. As of December 31, it is known that in January they will be sold only at a discount for 300,000 lek, with a 20,000 lek selling cost. Their carrying amount on the balance sheet becomes 280,000 lekë, and 120,000 lekë is recognized as a loss from impairment. We verify the treatment of this loss for income tax on a case-by-case basis.

How is a returned item from a customer recorded?

The fiscalized invoice is neither deleted nor canceled by the cash register. The refund is closed with a corrective document that references the original invoice's NIVF and is fiscalized in the same way. We confirm the exact type of document before it is issued.

Returned merchandise is returned to inventory at its cost, not at the selling price. If it is damaged, it is not put back on the shelf. It is noted in the minutes and treated as a loss or as merchandise returned to the supplier.

When the store is VAT-registered, the correction also changes the month's VAT. Therefore, returns are checked before the 11th, when the sales book is closed.

How are discounts and promotions treated?

The discount granted at the time of sale is noted on the invoice itself. The invoice shows the price the customer actually pays, and that price is included in revenue.

The buy-two-get-three promotion requires extra care. The free item comes off the shelf and must also be removed from inventory. Otherwise, the year-end inventory count will show a non-existent shortage. We confirm its VAT treatment before the promotion starts, because it depends on how it's billed.

How to identify defective goods, expired goods, and missing goods

Natural losses in storage are recognized as expense only within the limits of Government Decree No. 434 of May 20, 2015. Any amount above the limit is not recognized. We verify the percentages by commodity category against the text of the decision in the specific case.

Expired or damaged goods are documented in a report on the day they are discovered, including the quantity, value, and reason. We confirm the disposal procedure and its VAT impact on a case-by-case basis.

Missing goods without any documentation are the most serious case in inspection. An unexplained discrepancy between the books and the shelf is easily read as a sale without an invoice. This isn't a separate provision; it's how a discrepancy without proof is interpreted.

How much do the shelves, display cases, and the cash register depreciate?

Store equipment, such as shelves, display cases, and refrigerators, is depreciated at 20% per year. Computers and cash register software are depreciated at 25%. Both follow the straight-line method, in accordance with Article 51 of Law No. 29/2023.

Any purchase under 10,000 lek is fully recognized as an expense in the year of purchase. Minor inventory, that is, items of low value that enter into use, is recognized 50% in the year of entry and 50% in the following year, in accordance with Article 52, paragraph 3.

Store staff, schedule, and wages

The employment contract is signed in writing before the first day, in accordance with Article 21, paragraph 3, of the Labor Code. The rule we apply is that even Employee's statement It must be done before commencement. The fine for undeclared employees is 200,000 lekë for taxpayers subject to VAT and corporate profit tax, and 50,000 lekë for others, pursuant to Article 119 of Law No. 9920/2008.

The part-time salesperson has Standard employment contract, with a shorter weekly work schedule and rights proportionate to the time, in accordance with Article 14. A seller for the summer or holiday season has a fixed-term contract. Seasonal work is not a separate legal category.

When a fixed-term contract is renewed with the same person for at least three years, its non-renewal is treated as the termination of an indefinite-term contract, pursuant to Article 151.

How are evenings, Sundays, and holidays paid?

The store often works when others are resting, and the Labor Code compensates this time differently. Work from 7:00 PM to 10:00 PM is paid at least… Additional 20%, and work from 10:00 PM to 6:00 AM for at least 50%, pursuant to Article 81.

Weekly rest is at least 36 hours and includes Sunday, according to Article 85. Work on the weekly rest day is compensated with at least 251% premium pay or with compensatory rest, according to Article 87.

On official holidays, work is generally prohibited, and exceptions are allowed only by a secondary legislative act or by a collective bargaining agreement, pursuant to Article 86. When work is carried out anyway, Article 87 requires both premium pay and paid leave.

The mistake we see most often at stores is an evening shift with no pay. It doesn't appear on the timesheet. It only shows up when the inspector compares the store schedule with the contracts.

How much does a minimum-wage salesperson cost a store?

The minimum wage is 50,000 lek gross from January 2026. A salesperson at this wage costs the store 58,350 lek per month and takes home 44,400 lek.

Invoices and contributions are submitted by the 20th of the following month. A non-VAT natural person submits them once per quarter, by the 20th of the month following the quarter, in accordance with Article 65 of Law No. 29/2023.

Read also: How much does an employee in Albania cost the employer?

Annual deadlines for a store

The store calendar has three rhythms. There are dates that repeat every month, dates that occur once a year, and a period that applies only this year. The chart below arranges them in order, while Complete tax calendar He keeps them all together.

The year-end date does not come from a tax provision. A physical inventory count on December 31 is the only way to determine the closing inventory. Without it, neither the year's profit nor the valuation test has a basis.

Inspection and fines in a store

The store is monitored by three institutions. The tax administration checks the invoices, the cash register, and the staff. The Labor Inspectorate checks the contracts and the schedule. The National Food Authority steps in when the store sells food.

Violation	Fine	Base
Failure to issue the invoice, first time	25,000, 50,000, or 75,000 lek according to the category.	Law No. 9920/2008, Articles 122 to 125
Failure to issue the invoice, second time	Additional fine and 30-day business shutdown.	Law No. 9920/2008, Articles 122 to 125
Invoice not sent for fiscalization	25,000, 50,000 or 75,000 lek	Law No. 9920/2008, Articles 122 to 125
Cash payment over the counter	10% of the transaction value	Law No. 9920/2008, Article 120
Goods without accompanying documents	From 25,000 to 750,000 lek, depending on the case.	Law No. 9920/2008, Article 121
Undeclared employee	200,000 or 50,000 lek per employee	Law No. 9920/2008, Article 119

The fine for an obligation does not exceed 100% of the obligation's value, pursuant to Article 111, paragraph 5. The limit applies even when multiple violations concerning the same obligation are aggregated. We confirm the amount applicable in your case with act into force.

When the store sells food

Article 68 of Law No. 9863/2008 “On Food” applies to every food business operator, not only those who cook. Failure to comply with hygiene requirements under Article 23 is punishable by a fine of 300,000 to 500,000 lek.

Violations of the operator's responsibilities, traceability, and self-control, under Articles 24, 25, and 26, are each punishable by a fine of 100,000 to 200,000 lek. The fine is the primary penalty, while license revocation is the secondary penalty. The decision is notified to the operator within 5 days, in accordance with Article 70.

Traceability at the convenience store has a concrete meaning. For every product, you need to know which supplier it came from. The purchase invoices, kept by supplier, are the primary evidence of this.

When the store sells building materials

The draft law “On the Trade of Construction Products” is in public consultation until October 29, 2026, and is not yet in force. It provides for four levels of fines for economic operators. The first three levels are 50,000, 100,000, and 150,000 lek. The fourth level, for the most serious violations, is 2% of annual turnover, with a minimum of 200,000 lek.

The most serious infringements are placing a product on the market without a performance or conformity declaration, without technical documentation, without CE marking, or with falsified documents. Even after approval, the provisions are practically enforced one year after the project's entry into force, pursuant to Article 92 of the draft.

For the hardware store or materials supplier, this requires a simple routine starting today. Keep the statements the supplier provides with the invoice, because the project requires preserving the documentation for 10 years.

Checklist and the three steps for today

Monthly store list

• Every sale has a fiscalized invoice with an NIVF, even when the cash register was offline.
• Each monthly return includes a correcting document referencing the NIVF of the original invoice.
• At the end of the day, the cash register is within the daily target, and any surplus is deposited in the bank.
• No supplier invoice over 100,000 lek is paid in cash.
• The year-to-date accumulated turnover is compared to the thresholds of 10,000,000 and 14,000,000 lek.
• Damaged or expired goods are recorded in a report stating the date, quantity, and value.
• Evening, Sunday, and holiday hours are paid with the supplements under Sections 81 and 87.
• Books are due by the 11th, VAT by the 14th, and payroll by the 20th.

Three steps for today

1. Look at the revenue from January through today and divide it by the number of months. If the annual projection exceeds 14,000,000 lekë, the decisions for the last quarter are made with that figure in hand.
2. If you don't yet have a POS terminal, request an offer from your bank today. The deadline is December 31, 2026, and December is the month when banks have long lines.
3. Set the date for the physical inventory count for December 31 and who will perform it. Without this count, the year's profit remains an estimate.

Frequently asked questions

Do I need a license to open a store?

As a rule, no. Retail trade is a free activity under Law No. 10081/2009. Food and goods subject to special regulation have different requirements, which can be checked on the QKB license register.

Does the store's accounting change if I'm a sole proprietor or a corporation?

Less tax, more obligations. Both benefit from the zero rate when turnover does not exceed 14,000,000 lekë. The company files its financial statements with the QKB by July 31, pursuant to Article 22 of Law No. 25/2018, whereas the natural person does not.

Do I need a POS even if customers rarely pay by card?

Yes. The obligation applies to cash sales, not to the number of card payments. The deadline is December 31, 2026, and a terminal is required at every point of sale.

How much money can I keep in the cash register at the end of the day?

Up to 150,000 lekë for businesses with a turnover under 2,000,000 lekë; up to 500,000 lekë for businesses with a turnover between 2,000,000 and 10,000,000 lekë. For businesses with a turnover over 10,000,000 lekë, the limit is 500,000 lekë or 51% of turnover, whichever is higher.

How is expired merchandise handled?

It is documented in the minutes on the day it is discovered. It is recognized as an expense within the limits of Government Decree No. 434/2015, while the portion above the limit is not recognized.

What happens when I exceed 10 million miles in a year?

The application for VAT registration must be submitted within 15 days of exceeding the threshold. From that point on, the shelf price includes 20% VAT, so the margin is recalculated before the labels are changed.

Legal basis and limitations

Two boundaries that we mark openly

First, Law No. 61/2026 on official controls repealed Article 19 of the Food Law concerning the licensing and registration of food establishments. We have not yet read the new regime in the text, so we are not describing it. The page will be updated on the day the reading takes place.

Secondly, the waste disposal quotas under Government Decree No. 434/2015 are not provided as percentages, because we have not yet read the text of the decree. In your specific case, we will verify them with the text before year-end.

The acts on which this text is based

• Law No. 9920/2008 “On Tax Procedures”, as amended by Law No. 79/2025, Article 59 on payment limits and the cash limit, Article 59/3 on the POS terminal, Articles 111, 119, 120, 121 and 122 through 125 on fines.
• Law No. 87/2019 “On the Invoice and the Monitoring System of Turnover,” Articles 20, 29, and 30
• Law No. 92/2014 “On Value Added Tax,” as amended, Articles 107 and 122
• Law No. 29/2023 “On Income Tax,” as amended, Articles 24, 51, 52, 61, 63, 65 and 69
• National Accounting Standard No. 4 “Inventories,” paragraphs 22 through 25
• Government Decree No. 434, dated May 20, 2015, on the norms for spoilage, losses, and waste.
• Law No. 25/2018 “On Accounting and Financial Statements,” Article 22
• Labor Code of the Republic of Albania, as amended, Articles 14, 21, 81, 85, 86, 87 and 151
• Law No. 9863/2008 “On Food,” as amended, Articles 23 to 26, 68 and 70, and Law No. 61/2026 on official controls.
• Law No. 10081/2009 on licenses, authorizations, and permits, and Government Decree No. 538/2009
• Draft Law “On the Trade of Construction Products,” Public Consultation ID 1057, open until October 29, 2026.