A seasonal business that suspends operations at the end of September continues to have filing and contribution obligations for as long as it remains registered as active. Mandatory contributions for the self-employed are calculated on the national minimum wage, set at 50,000 lek per month as of January 1, 2026, and are not based on turnover. After eight months of inactivity, this amount reaches 119,200 lek.
The alternative is to switch to the passive register, declared with the National Business Center. During the passive period, periodic statements are not filed and no contributions are calculated.
The restriction accompanying this status is essential to the decision. The entity on the passive register does not have the right to carry out transactions, meaning it neither issues invoices nor receives invoices in the name of the business. This article compares three possible routes, outlines the costs of each, and determines when each is applicable.
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Three possible paths
Tax legislation It does not provide for a special status for seasonal businesses. The taxpayer is registered as active or on the passive register, and no third status exists. Therefore, the end-of-season choice has three options.
The first option is active status. Statements continue to be delivered, contributions are paid, and the business retains the right to invoice. The cost is higher, while freedom of action remains full.
The second option is to suspend activity and switch to the passive register. Statements and contributions are halted. At the same time, the right to conduct transactions is also suspended.
The third option is deregistration. Obligations are permanently closed, but the identification number is not reused, so reopening requires a new registration.
The cost of a period of inactivity for an active business.
To make the comparison measurable, we're calculating it based on a typical case: a coffee bar registered as a sole proprietorship with one employee, operating from June through September. The figures are rounded and based on the rates in effect for 2026.
Calculation of contributions
Social security contributions are calculated on the national minimum wage of 50,000 lekë, at a rate of 23.001%. The result is 11,500 lekë per month.
Health insurance for the self-employed is calculated on the basis of twice the minimum wage, i.e., on an amount exceeding 100,000 lek, at a rate of 3.401%. The result is 3,400 lek per month.
The monthly total is 14,900 lek, or 119,200 lek for eight months. This amount is paid even without any turnover, because the calculation base is the minimum wage. Instruction No. 23, dated December 9, 2014, Section 4.7 provides that only entities that have been transferred to the passive register are exempt.
Read more: Self-Employed Status Declaration and Contributions
Declarations and sanctions for non-use
Three declarations continue to be required even without activity. Value-Added Tax Declaration is submitted no later than 14 days after the end of the tax period. The sales and purchase books are closed as of the 10th if there is no activity, and the fiscalization system automatically closes on the 11th, with the possibility of corrections until the 14th. The payroll register must be submitted no later than the 20th of the following month, even if there are no employees.
Over eight months, this amounts to twenty-four non-filed returns. Failure to file a return on time is punishable by a fine of 10,000 lekë for corporate income tax filers and 5,000 lekë for all other taxpayers. The penalty is imposed once per return, regardless of the length of the delay.
The advance payment of profit tax follows a distinct logic. It is calculated based on the tax for previous periods, not on the activity of the coming year, and the third-quarter installment falls at the end of September. The law provides for the possibility of requesting a review of prepayments when turnover declines, and the request is submitted to the regional tax directorate.
Read more: How are tax prepayments calculated?
Switching to the passive register. Procedure and restrictions
The transfer to the passive register is regulated by Law No. 9920, date May 19, 2008 “For Tax Procedures in the Republic of Albania,” as amended, Article 44. Paragraph 1 provides for three circumstances. When the taxpayer does not carry on any activity for 12 consecutive months. When the taxpayer does not file the return for 12 consecutive months. Or when it declares suspension of activity with the National Business Center and pays all tax obligations.
The third circumstance is the one applicable to seasonal businesses. The application is submitted electronically through the e-Albania portal, using the “Application for notification of temporary cessation of activity“. Reactivation is done through the service “Request to activate activity“The fees and deadlines for these two services are available on the relevant service card on e-Albania at the time of application.
A clarification is important before applying. The text of the law does not specify a minimum 12-month period for the third circumstance. Meanwhile, the tax administration treats passive status as a solution for suspensions exceeding 12 months or for indefinite suspensions. When reactivation is expected within the same year, the matter must first be verified with the regional tax directorate.
During the passive period, paragraph 2 of Article 44 provides that the taxpayer does not file periodic tax returns and is not subject to penalties for failure to file. Paragraph 4 provides that the transfer does not eliminate previously incurred tax liabilities nor prevent their collection. Paragraph 5 provides for automatic transfer to the active register when the taxpayer resumes operations.
The Suspension of Transactions and the Consequences for the Parties
Article 44, paragraph 7, provides that any transaction carried out by a taxpayer in the passive register is considered an administrative violation. The consequences are divided according to the role in the transaction.
The seller who is on the reverse‐charge register is subject to tax assessment and penalties. The buyer who receives an invoice from a passive entity loses the right to deduct value-added tax and to recognize the expense. The active seller who invoices a passive entity is subject to a penalty under the same provision.
For this reason, the General Directorate of Taxation publishes the list of passive entities and asks taxpayers to consult it before conducting transactions. In practice, suppliers verify the list and do not issue an invoice to a passive entity.
In principle, a business in passive status cannot issue fiscalized tax invoices.
The administration has treated certain service categories separately, including energy, water, telecommunications, insurance, and financial leasing. Leasing space from a private owner, equipment maintenance, and inventory purchases are not automatically included. The official wording must be verified before making a decision.
Electronic fiscalization certificate
The electronic fiscalization certificate has a validity period, and the renewal must be initiated at least 30 days before the expiration date, following the same procedure as the initial application.
During the period of inactivity, the expiration date goes unnoticed because no invoices are issued. The consequence becomes apparent when it is reopened. Therefore, the expiration date is verified before the season closes.
Read more: Fiscalization. How to apply for the electronic certificate
Application as appropriate
The choice of path depends on the activity planned during the downtime, not on the size of the business. The three cases below illustrate three different outcomes.
Case 1. A business that completely ceases operations.
Beach bar, sole proprietorship, one self-employed person, with no employees during the period of inactivity. Equipment is stored. Rent for the space is invoiced and paid during the season. Inventory is purchased in May, after reactivation.
The suspension is applicable. During the passive period no transactions are carried out, so the limitation in Article 44 does not pose a problem. The savings amount to approximately 119,000 lek in contributions and twenty-four fewer submissions. Two necessary verifications remain: the certificate's expiration and prior confirmation with the regional directorate.
Second case. A business that accepts an advance payment during a period of inactivity.
Hotel registered as a limited liability company that accepts advance reservations from January for the summer season. The building lease is a 12-month contract with monthly billing. The reservation system is paid for by an annual subscription.
Suspension is not applicable. The reservation deposit constitutes business income and requires an invoice, i.e., a transaction. The company remains active, and attention turns to two issues. First, the request to review the down payment installments, since turnover drops off after the season. Second, the submission of monthly statements during the period of inactivity.
Case three: a business making off-season purchases.
A beach station that leases public space from the municipality for an annual fee and orders inventory in February because of pricing.
The suspension is not applicable. Purchasing inventory requires an invoice from the supplier in the business's name, so it constitutes a transaction. If the entity is on the passive register, the supplier verifying the list does not issue the invoice, or issues it and loses recognition of the expense. Possible solutions are taking an active stance or shifting the purchase within the season.
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Deregistration and the consequences for reopening
Registration cancellation is governed by law. No. 9723, dated May 3, 2007 “For business registration,” as amended. Pursuant to the article Article 45 of Law No. 9920, Tax deregistration is only carried out after deregistration with the National Business Center.
For an individual, the application is submitted electronically and the tax administration verifies the tax status before deregistration. According to information published by the National Business Center, the tax audit does not exceed 30 working days. Deregistration is not carried out if any unpaid tax liabilities are found.
For the limited liability company, the procedure proceeds through liquidation, according to Law No. 9901, dated April 14, 2008 “For merchants and trading companies,” as amended. A decision of the partners' assembly is required for the dissolution of the company and for the appointment of the liquidator. The liquidator shall not distribute the remaining assets before the expiration of the creditors' claims period.
The main consequence appears upon re-opening. The identification number is not reused, so the new opening goes through initial registration with a new identification number. The name of the deregistered entity remains reserved for six months. Licenses and relationships tied to the previous number are not transferred.
Read more: Registration cancellation of a natural person: procedure and deadlines
Read also: Dissolution of the limited liability company
Obligations to seasonal employees
Labor Code It does not provide for a special regime for seasonal work. Seasonality is treated as an objective reason for a fixed-term contract. Article 140(2) requires that this reason be justified, and the justification is stated in the contract text.
A fixed-term contract ends at the end of the agreed period, without early termination and without the notice periods that apply to indefinite contracts. If the employer terminates the employment relationship before the contract's expiration date, the procedure of Article 144 applies.
After the date of departure, three obligations remain.
1. Notice of Departure. The employee must give at least one calendar day's notice before starting work, and the departure must be reported within 10 calendar days using form E-SIG 027/a.
2. Compensation for unused leave. Article 94 allows paid substitution only when the employment relationship has ended. The basic duration is 22 working days under Article 92, paragraph 2, as amended by L.Inventory No. 91/2024, calculated proportionally for an employee who has not completed one year of service. For four months of work, the result is about 7.3 days.
3. Documentation archiving. Contracts, the employee register, and payroll records remain subject to request in an inspection conducted after the season's close.
The penalties for an undeclared employee are imposed by two different authorities. State Labor Inspectorate imposes a fine under Article 202 of the Labor Code, where the penalties are expressed as multiples of the monthly minimum wage. The tax administration imposes a fine under Law No. 9920. The legal foundations and competent bodies are separate.
Read more: End of the employment relationship: steps and deadlines
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Send me free notificationsVerifications before the decision
Five verifications determine the applicable path.
1. Is the issuance or receipt of invoices in the name of the business expected during the period of inactivity? A positive answer precludes suspension.
2. What is the cost of the inactive period for an active business, including contributions on the minimum wage?
3. When does the electronic fiscalization certificate expire?
4. Have employee departures been reported within 10 days, and has compensation for unused leave been calculated?
5. How is a seasonal business treated in the fiscal package of the respective municipality? Local taxes and fees are set by municipal council decision and vary from one municipality to another.
The decision is made before the season ends, while the consequences appear at reopening. The cost of verification is measured in one hour of work. The cost of an unenforceable suspension, or of an unaccounted-for active period, is measured in tens of thousands of lek.
Frequently asked questions
Can the activity be suspended for only eight months?
The application for a temporary leave of absence to the National Business Center does not require a minimum term specified in the text of the law. The tax administration treats passive status as the solution for suspensions exceeding 12 months or for indefinite periods. When reactivation is expected within the year, the matter is verified in advance with the regional tax directorate.
Can invoices be issued while in a passive status?
They cannot be issued. Any transaction carried out by the entity in the passive register is considered an administrative violation under Article 44, paragraph 7. The passive seller is subject to a tax assessment, while the buyer loses the value-added tax deduction and the recognition of the expense. Technically, it is impossible to issue and receive invoices for a business in passive status.
Can reservation deposits be accepted while in passive status?
They cannot be accepted. The deposit constitutes business income and requires an invoice, i.e., a transaction. A business that accepts off-season reservations remains registered as active.
Are statements and contributions suspended during passive status?
Both are suspended. Article 44(2) provides that a taxpayer on the passive register does not file periodic returns and is not penalized for failure to file. Instruction No. 23, Point 4.7 excludes it from the calculation of contributions.
What happens to the obligations incurred before the suspension?
They remain. Article 44, paragraph 4, provides that the transfer to the passive register does not eliminate the existing tax liability and does not prevent its assessment or collection. The transfer to the passive register is conditioned on the payment of the tax liabilities.
After deregistration, is the identification number retained?
Not retained. Upon deregistration, the opening goes through initial registration, and the entity is issued a new identification number. The name of the deregistered entity remains reserved for six months.