The VAT threshold is reduced to 5,000,000 lekë as of January 1, 2027. How it's measured and what you need to do.

The VAT threshold is lowered from 10,000,000 lekë to 5,000,000 lekë in annual turnover, effective January 1, 2027. The change was made by Council of Ministers Decision No. 822, dated October 28, 2026, published in the Official Gazette No. 233 of October 29, 2026. The threshold of 10,000,000 lek remains in effect until December 31, 2026, and is no longer valid after that date.

The minimum registration threshold, known in practice as the VAT threshold, is the annual turnover figure that triggers the obligation to register. Above that figure, the business calculates VAT on its sales. It is set by a decision of the Council of Ministers, because Article 117(2) of Law No. 92/2014 delegates this authority to the government and the law itself does not specify any figure. Therefore, this provision does not depend on the vote of the fiscal package in Parliament.

This guide explains how turnover is measured and when it is considered to have exceeded the threshold. It shows what deadline you have to register and how much it actually costs to opt into VAT. It concludes with cases that fall outside the general rule and explains why exiting is much slower than entering. All claims are verified against the text of the act and the relevant law provisions.

Read also: Fiscal Package 2027. What changes for businesses?

Voice	Until December 31, 2026	From January 1, 2027
Minimum registration threshold	10,000,000 lek	5,000,000 lek
Flooring for voluntary registration	over 5,000,000 lek	There is no floor.
Threshold for the notary and the bailiff	zero	zero, unchanged

What changed and by what act?

The minimum threshold for VAT registration is reduced to an annual turnover of 5,000,000 lekë as of January 1, 2027, by Council of Ministers Decision No. 822, dated 28.10.2026, published in the Official Gazette No. 233 of October 29, 2026, page 24117.

What the decision does, section by section

The decision has four articles, but only one changes a rule. Article 2 lowers the threshold. Articles 1 and 3 remove the figures 20% and 6% from the implementing act, which had been repeated there even though their true source is the law itself. Article 4 sets the effective date, January 1, 2027.

This means that removing the figures is not a rate increase. It is text cleanup ahead of the proposed amendments to the law, so that the implementing act will not conflict with it when they are approved.

Why doesn't this change wait for Parliament?

Because the law does not set the threshold figure itself, but delegates it to the government.

Law No. 92/2014, Article 117, paragraph 2: “The minimum threshold for VAT registration, cases of exemption, or the minimum registration threshold for specific categories are determined by a decision of the Council of Ministers.”

The capital gains tax, dividends, the standard VAT rate, and the wage brackets depend on the parliamentary debates in November and December. The threshold does not. For businesses near the threshold, planning starts today.

How is the turnover that takes you over the threshold measured?

Turnover for this purpose is neither profit, nor receipts, nor the turnover recorded by the fiscal device. It is defined by Article 119 of Law No. 92/2014 and is calculated on the total price paid by the buyer, excluding VAT.

What goes into the calculation?

• All taxable supplies of goods and services made by the same taxable person.
• Real estate supplies and financial services, when they originate from core economic activity, even though they are exempt from VAT under Article 53.

What doesn't count

• The sale of tangible and intangible assets treated as investment assets and not held for sale. So the sale of a car or business equipment does not push you over the threshold.
• Values from financial transactions under Article 53, letters b) to e), when they are ancillary transactions and not part of economic activity.
• Gains from transactions in real estate that do not stem from the main activity for which you are registered.

This distinction is often misunderstood. A shop that sells its old van for 2,000,000 lekë does not add that amount to its turnover for threshold purposes. But an agency whose main activity is real estate brokerage counts that income.

Business opening during the year

For a person registering for the first time, Article 119, paragraph 4, provides for a prorated calculation based on the period from the date of establishment through the end of the fiscal year. In practice, the threshold is weighted by the months of activity. For three of the twelve months, the weight is 5,000,000 multiplied by 3 divided by 12, i.e., 1,250,000 lek.

The instruction specifies how the months are counted in Article 73, paragraph 3. If you register before the 15th of the month, the months are counted from the 1st of that month. If you register after the 15th, They are counted from the 1st of the following month.

Opening date	Counting months	The threshold for that year
October 7	3, as of October 1	1,250,000 lek
October 17	2, as of November 1	833,333 lek

Both examples are self-assessed and are calculated on over 5,000,000 lek. The ten-day difference in the opening date lowers the first-year threshold by more than 400,000 lek, so for a business opening in the middle of the month this is no small matter.

The threshold is measured over the calendar year or over a rolling 12-month period.

Both, because they address two different things, and this is precisely where the mistake is made.

The figure is measured over the calendar year. Decision No. 822 states clearly: the minimum threshold is “turnover of 5,000,000 lek." in a calendar year“So the first question every year is simple: How much have you sold from January 1st to today?.

The obligation to register arises under Article 122 of the law., which refers to turnover “over a consecutive 12-month period.” This provision does not replace the calendar year. It covers the case that the calendar year does not capture—namely, a business that crosses the threshold by spanning months from two different years.

And there is a third sentence, which in practice is the most important. Article 122 says that when the threshold is exceeded more than 12 months, Registration is required immediately. A seasonal business that sells most of its inventory within four months doesn't wait for the end of the year or for the full twelve months to pass.

How it's done in practice, with three rules

The instruction closes the question on its own. Article 75, paragraph 1, states that the turnover to which Article 122 applies is the annual turnover, and therefore a consecutive 12-month period is considered the calendar year. Thus, the measurement is made over the calendar year, from January 1 to December 31, not over a rolling twelve-month window.

Three rules of work follow from this.

1. Keep a single column showing cumulative turnover since January 1. The instruction explicitly requires this in Article 74, paragraph 3, which states that records are kept chronologically, on a monthly basis, and with cumulative values, precisely in order to identify the moment when the threshold is crossed.
2. If the cumulative amount exceeds 5,000,000 lekë during the year, registration is required immediately, within 15 days from the date of the excess, Article 75, paragraph 2.
3. If the threshold is only met at year-end, registration is required. by January 15 of the following year, Article 75, paragraph 1.

Also keep the start date in mind. The turnover threshold for 2026 remains at 10,000,000 lek. The 5,000,000 lek threshold applies to periods beginning on January 1, 2027, so the first year measured under it is the 2027 calendar year.

Why do the sources seem to say different things?

VAT in Albania is governed by three tiers of legislation, each with its own function. When you read only one, it seems to contradict the others.

Layer	What does it set?
Law No. 92/2014, as amended	The rule, the norms, and the moment when the obligation arises. Here are 20% and 6%, and here is Article 122.
Government Decree No. 953/2014, as amended by Government Decree No. 822	The figures that the law delegates to the government. Here the threshold is 5,000,000 lek.
Instruction No. 6, dated January 30, 2015, as amended	How it is applied in practice. Who registers, how, within what timeframe, and what happens upon exit.

Therefore, the question “what is the threshold” is answered by the decision, the question “when does my obligation arise” is answered by the law, and the question “what do I do specifically” is answered by the guidance. The text of the instruction we have read is the updated copy, which includes the latest amendment, Instruction No. 6, dated February 24, 2025. That amendment affects the definitions, the place of supply of services, and the treatment of grants, and does not affect the articles on registration and the threshold cited here.

Passage is not always expected. The instruction also recognizes anticipation.

Article 5, paragraph 3, of the directive states that under the standard regime every taxable person who is expected to exceed The minimum registration threshold. Thus, the obligation is not tied only to the amount actually achieved, but also to what is reasonably expected.

What does this mean in day-to-day work? Let's take a business that in June signs a major contract and knows it will clear the threshold by December. It has no reason to wait for the transition. Late registration gives him no benefit and exposes him to risk. The same applies to a seasonal business that knows from experience that July and August account for half of its year.

What's worth keeping. When you register on a forecast basis, keep proof of the forecast—namely the contract, the order, or the sales plan. This will serve you if you later need to explain why you registered before the figure crossed the threshold.

When you register on a forecast basis, keep proof of the forecast—namely the contract, the order, or the sales plan.

When is the threshold considered crossed, and how much time do you have?

Law No. 92/2014, Article 122, paragraph 1: “The date of exceeding the threshold is considered to be the last day of the calendar month in which the minimum registration threshold is exceeded.”

According to the law, therefore, the cut-off date is the last day of the month, and the 15-day period begins on that date.

Here, the directive is stricter than the law. His example, in Article 75, paragraph 2, counts the 15 days from the date of sale that exceeded the threshold. The instruction is the text enforced by the administration, so count from the date of crossing the threshold. Therefore, turnover monitoring must be an ongoing routine.

VAT is calculated only on the amount in excess.

This is the biggest relief under the entire regulation, and few people know it. When you exceed the threshold during the year, you don't calculate VAT on all your turnover up to that point. You calculate it only on the amount by which you exceeded the threshold, and on every subsequent sale.

The example is for guidance only. From January through September, the business generated 4,800,000 lek. On October 2, a sale brings the turnover to 5,100,000 lek. It must be registered within 15 days of October 2. And Calculate VAT only on amounts over 100,000 lek., that is, regarding the excess. Any sale after that date is subject to the normal regime.

What happens if the deadline passes. Article 5, paragraph 7, of the directive addresses the case of delay. When the tax administration finds that a person met the criteria and did not register, She records it compulsorily.. Liabilities for prior periods are calculated from the date when the person should have been registered.

This is the part that costs more than the fine itself. You end up with VAT charged on sales you've already made at a net price, so there's no way to recover it from the buyer. The amount of the sanction itself is determined by the Law on Tax Procedures, and we won't provide a figure here until we verify it in the relevant article of that law.

Calculated example, step by step

A store with an average monthly turnover of 450,000 lekë, excluding VAT. Figures are rounded for illustrative purposes.

Window Month	Monthly turnover	12-month cumulative
Month 10	450,000 lek	4,500,000 lek
Eleventh month	450,000 lek	4,950,000 lek
Month 12	450,000 lek	5,400,000 lek

The threshold is crossed during the 12th month. The crossing date is the last day of that month, and from that date the business has 15 days to apply for registration.

Notice something that often goes unnoticed. Under the old threshold of 10,000,000 lek, the same shop would never have registered. With the new threshold, it becomes VAT-registered. This is precisely the group being affected: businesses with turnover between 5 and 10 million lek.

What specifically changes in terms of money and work?

Entering VAT is not just a registration. It changes the invoice, the margin, the cash flow, and the monthly accounting work. Below, each effect is presented separately, with rounded figures.

Four changes to the monthly routine

Four things change in the monthly routine, and one of them is in your favor.

1. Invoice. VAT is calculated and shown separately. Fiscalization doesn't start now; you already have it, because Article 110 of the law exempts businesses below the threshold only from VAT reporting, not from invoicing or the turnover monitoring system.
2. Purchases. The VAT on purchases becomes deductible when the conditions are met. This is the positive side and is often overlooked.
3. Declaration. Submit the periodic VAT return, along with the sales and purchase books.
4. Final price. If you sell to a consumer who can't deduct VAT, the decision on whether to apply it to the price or to the margin is the most important business decision of January.

As long as you're below the threshold, you're in the small business regime, and Article 121 is categorical. You have no right to claim VAT credit and you may not charge VAT on your invoices. If you calculate it, you're required to pay that VAT, while the buyer has no right to deduct it, plus there's a penalty under the Tax Procedure Law. So the mistake harms both parties.

Read also: VAT Registration and Deregistration

What does it really cost? Two businesses, two opposite outcomes.

The most common mistake is to think that VAT takes 20 percent of turnover. That's not the case. The VAT you pay is calculated on the value you add, because VAT on purchases is deducted from that on sales, according to Article 76 of the law.

The first case: the store that sells to the end consumer. Sales of 6,000,000 lek per year, purchases of 4,500,000 lek from VAT-registered suppliers, the shelf price does not change.

Voice	Today, under the threshold	From 2027, inclusive of VAT
Total sales	6,000,000 lek	6,000,000 lek
VAT calculated on the sale	There is none.	one million lek
Total purchase	4,500,000 lek	4,500,000 lek
Deductible VAT on the purchase	Non-negotiable	750,000 lek
VAT to be paid annually	There is none.	250,000 lek
The gross margin that remains for you	1,500,000 lek	1,250,000 lek

The real cost is 250,000 lekë per year, not 1,000,000 lekë. So about one-sixth of the gross margin. This is the figure against which every decision must be compared, including the idea of keeping turnover below the threshold by foregoing sales.

The other solution is to add VAT to the price. Then the consumer pays 7,200,000 lekë and your margin remains 1,500,000 lekë. The cost shifts to the buyer, while the risk shifts to sales volume. One thing has changed in your favor, because as of January 1, 2027, even the competitor with turnover over 5,000,000 lekë finds itself in the same position.

The second case: the same business selling to VAT-registered businesses. Here the accounting is reversed. Your buyer deducts the VAT you invoice them, so the real cost for them doesn't change. You continue to receive 6,000,000 lek in net sales, while your purchases cost you 3,750,000 lek instead of 4,500,000 lek, because 750,000 lek of VAT is now deductible. Your margin increases from 1,500,000 lek to 2,250,000 lek.

The same legal change, two opposite outcomes. Therefore, the first question before January isn't how much you sell, but to whom you sell.

Effect on cash. VAT is paid before the client pays you.

VAT does not follow collection; it follows supply. Article 32 of the law explicitly states that the tax arises and becomes due when the supply is made, not when the customer pays. The return is filed no later than 14 days after the end of the month (Article 107(1)). Payment is made no later than the date the return is filed (Article 89).

In practice, this means that the January VAT is declared and paid by February 14. Suppose you issue an invoice for 1,200,000 lek with VAT on January 20 and the client pays you on March 30. You pay it 200,000 lek on February 14 out of your own funds—so six weeks before you collect it.

For a business that operates on payment terms, this is the most severe effect of the entire change. It doesn't show up on the profit and loss statement; it only shows up in the bank.

Effect on administrative costs and work pace

The VAT return is generated automatically by the tax administration based on the purchase and sales register, Article 106, paragraph 4. This does not eliminate the work; it merely shifts it. The obligation to review, complete, and confirm the return remains yours. The declaration is accurate only to the extent that the books accompanying it under Article 109, paragraph 2, are accurate.

The pace also changes. The tax period is the calendar month, Article 107, paragraph 2, so one return and two books every month. The first period does not begin in January. It begins on the day the registration certificate indicates that the registration takes effect and ends on the last day of that month, Article 107, paragraph 3.

When the VAT on purchases is greater than that on sales

It happens more often than you think. Typically in the first year, when an investment is made, or when a portion of sales carries a lower rate than purchases.

The law treats it this way. The surplus is carried forward for deduction in the following period, Article 76, paragraph 2. A refund is requested only when two conditions are met simultaneously: the surplus has been carried forward for three consecutive months and the amount requested exceeds 400,000 lekë, Article 77, paragraph 1. The administration completes the procedure within 60 days from the date of the request, and within 30 days for exporters, Article 77, paragraph 4.

So the money will come back, but not soon. This deadline should be included in the 2027 budget forecast, not revealed in March.

The goods you have on hand as of December 31, 2026.

This is the question with the most useful answer in the entire topic, and many businesses miss out on it because they don't know it exists.

Article 76(2) of the Directive, in implementation of Article 83 of the Law, grants you the right, in the first tax period following registration, to treat as deductible the VAT on inventory goods you hold on the date of registration. The right applies whether you register by obligation after crossing the threshold or voluntarily. The basic requirement is that those goods are intended for sale, and you will calculate VAT on their sale.

There are three conditions, and all must be met, according to Article 76, paragraph 3.

1. Goods must be used for taxable supplies that are eligible for deduction.
2. You must have an inventory list of goods, showing quantity and value, along with the date the stock was recorded. This list is submitted to the tax authority at the time of registration and must be reflected in the registers and in the accounting records.
3. Each good must be supported by a VAT purchase invoice, purchased no earlier than 12 tax periods—that is, no more than twelve months before the period in question.

What does this mean for December 2026? The goods you have on hand as of December 31 do not lose their VAT, provided that you purchased them with a VAT invoice, received them within twelve months, and have them inventoried. So the task to be done in December is not to reduce stock, but to ensure that every purchase has a VAT invoice and that the inventory is closed and accurate as of the recording date..

Only one threshold matters. Article 76, paragraph 4, states that if this VAT on inventory gives you a deductible surplus for three consecutive months, You do not have the right to request a refund for it.. It is carried forward and back with subsequent sales, but it does not convert into cash.

Why is the VAT exit much slower than the VAT entry?

Because the entry period is measured in 15 days, while the exit period is measured in months, and the deadline varies depending on how you registered.

How did you register?	The condition for getting out	When it enters into force
By obligation, after crossing the threshold, Article 122	The last 12 months' turnover falls below the threshold.	12 months after the request
By election, voluntarily, Article 120	Minimum stay: 2 calendar years	6 months after the request

So a business that crosses the threshold in 2027 and sees its turnover drop in 2028 does not immediately revert to the small business regime. Not the following month, nor at the start of the year. It submits the application and waits twelve months. This must be taken into account before any hasty decision to artificially lower turnover.

And the exit also has a direct cost that few are aware of. Article 7, paragraph 1, of the directive states that at the moment of deregistration Unsold inventory and assets for which you have deducted VAT are considered supplies in exchange for payment.. The depreciation adjustment is made within five years for movable assets and within ten years for immovable assets.

In simple terms, the VAT you deducted when you bought the goods or equipment is partially refunded when you exit, based on the remaining years. Therefore, entry and exit are not two switches that can be turned on and off freely.

Special cases, voluntary registration, and exemptions

The general rule doesn't cover every case. Four situations fall outside it, and each can change the answer for you even if your turnover is clearly below the threshold.

When is voluntary registration worthwhile?

Article 120 allows every taxable person to opt for the standard VAT regime, regardless of whether they meet the criteria for the small business regime. This right has not changed. What changed is that the implementing act removed its 5,000,000 lek threshold. With that threshold removed, even businesses below 5,000,000 lek can opt to register.

It's mainly worthwhile in three situations. When you sell wholesale to other registered businesses, because VAT isn't a cost for your buyer. When you have a large initial investment and want to deduct the VAT on purchases. And when you export, because the supply is zero-rated while the VAT on purchases remains deductible.

It's not worth it when you're mainly selling to the end consumer and competing on price. In that case, VAT gets added to your price and eats into your margin.

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

Importers. The case where the threshold doesn't matter at all.

This is the rule that goes completely overboard and affects many small shops and merchants without their knowing.

Article 5, paragraph 4, of the directive requires any person who imports goods for resale to register for VAT, regardless of the turnover already achieved or expected. So if you buy goods from abroad to resell here, the duty is not based on either 5,000,000 lek or 10,000,000 lek.

There are two narrow exceptions. First, low-threshold entities importing investment goods classified under tangible fixed assets—that is, equipment for their own use rather than for sale. Second, low-threshold exporters.

The consequence of delay here is more severe than anywhere else. Article 74, paragraph 5, of the directive states that when the administration finds that you have imported goods for resale without having registered beforehand, it registers you and requires you to calculate VAT on the sale of those goods, but It doesn't allow you to deduct the VAT you paid at customs., precisely because you didn't register before importing. So you pay twice.

Therefore, before calculating your turnover, ask the first question: do you import goods to resell? If so, the threshold question may not apply to you at all, and you must apply for registration before your first import.

Consequences for the farmers' compensation scheme

This is the second effect of lowering the threshold, and it isn't mentioned anywhere because it's not in the new decision but in the law itself.

Article 147, paragraph “a,” of Law No. Law No. 92/2014 provides that agricultural producers benefit from the compensation scheme when “their annual turnover does not exceed the minimum registration threshold for VAT, as approved by a decision of the Council of Ministers.” Thus, the scheme's condition is directly tied to the threshold, without its own figure.

When the threshold is lowered, the requirement is automatically lowered as well. An agricultural producer with a turnover between 5,000,000 and 10,000,000 lekë falls out of the 10 percent compensation scheme (Article 148) and moves to the standard VAT regime. No separate decision is required for this; the change in the threshold is sufficient.

If you have agricultural activities within this turnover range, this is the change that affects you more than the registration itself. It changes how you invoice and how you are paid by the buyer.

Who doesn't go on a diet and who has a zero tolerance threshold.

Article 118 excludes three cases from the regime. Incidental supplies of real estate. Activities included in the agricultural producers' scheme. And the supply of services by a taxable person not established in Albania, where the VAT liability arises here. Article 117, paragraph 3, also excludes activities constituting tax evasion.

The zero-threshold rule remains unchanged. For notaries and for judicial, state, and private bailiffs, the minimum registration threshold is zero, regardless of annual turnover.

How many businesses are affected and what changes in the market?

The official report of the Ministry of Finance, dated October 26, 2026, estimates the effect at double digits. Lowering the threshold brings 17,516 new businesses within the VAT system. And around 4.5 billion lek Additional annual revenue for the budget. These are the proposer's figures, not our estimates.

According to that report, the threshold of 10,000,000 lek was the highest in the region and exceeded the ceiling of the European Union directive itself. With 5,000,000 lek, Albania falls within that ceiling.

Place or order	VAT registration threshold
Albania until December 31, 2026	about 108,696 euros
Albania as of January 1, 2027	about 54,000 euros
The ceiling of the European Union directive	85,000 euros
Italy	85,000 euros
Kosovo	30,000 euros
Black Mountain	30,000 euros
Greece	10,000 euros

The effect on the market is simpler than it seems. Until today, two neighboring stores with revenues of 7,000,000 and 12,000,000 lekë competed under different rules, one without VAT included in its prices and the other with it. From January 1, 2027, both will be within the system. The price advantage that simply arose from the threshold disappears for this segment of businesses.

For a portion of these 17,516 businesses, the change works in their favor. These are the businesses that sell to other businesses and that until now have paid VAT on their purchases without being able to deduct it. For the portion that sells to the end consumer, it remains a cost. Therefore, the calculation is done on a one-by-one basis rather than based on the sector average.

What you need to do from today until December

Seven steps, all possible within November and December, so that January won't catch you by surprise.

1. Provide the turnover for the last 12 months, excluding VAT, under Article 119, after excluding sales of investment assets and ancillary transactions.
2. Compare it to 5,000,000 lek. If you're above or within 15% below, you're in the affected group.
3. Build the cumulative monthly table and review it at the end of each month.
4. Recalculate the prices for January and decide whether to include VAT in the price or in the margin.
5. Review contracts with terms extending beyond the year. If the price is fixed and there's no tax clause, January's VAT will be charged on your margin.
6. Prepare the invoicing and accounting for the new regime.
7. Close out the stock inventory by quantity and value on the date of recording, and ensure that every purchase of it has a VAT invoice within 12 months. This is the condition for deducting that VAT, according to Article 76 of the guidance.
8. Do not include VAT on the invoice before you register, because Article 121 punishes it twice.
9. Do not leave the registration up to the administration to request. Article 91, paragraph 4, grants it the right to register you even without your request when it determines that the conditions have been met.
10. First of all, check whether you are importing goods for resale. If so, liability may exist regardless of the threshold, under Article 5(4) of the Directive.

What hasn't changed and what still awaits Parliament

Decision No. 822 did not affect the rates, so let us also make the other point clear to avoid the confusion that has been circulating these days. Of the decision's four articles, only one changes a rule. Article 2 lowers the threshold. Articles 1 and 3 remove from the implementing act the figures 20 percent and 6 percent, which it had repeated from the law. Article 4 sets the effective date. So removing a figure from the decision does not change that figure, because it remains in the law.

• The standard VAT rate is still 20%. The proposal for 21% is in the draft law and awaits Parliament.
• Accommodation in the accommodation facilities is still 61 TP3T, according to Article 49, paragraph 3, of the law. The proposal for 101 TP3T awaits Parliament.
• The capital gains tax remains at 15% and the dividend at 8%. The increase of the capital gains tax to 17% was withdrawn on October 28.
• The list of basic food items with VAT 6% has not yet been approved and is expected to be issued in a separate decision.
• Article 110(1) remains unchanged. Business below the threshold is exempt from VAT invoicing and reporting, but not from the invoice legislation and the turnover monitoring system.

Status table. What has been decided and what is awaiting a vote.

Voice	Today	Proposal	Status
VAT threshold	10,000,000 lek	5,000,000 lek	Decision. Government Decree No. 822, effective January 1, 2027.
DVB standards	20%	21%	Wait for Parliament
Accommodation in the accommodation facilities	6%	10%	Wait for Parliament
Staple foods	20%	6% for 14 categories	Pret Parliament, the list with a special decision
Profit Tax	15%	15%, no change	The increase to 171 TP3T was withdrawn on October 28.
Dividend Tax	8%	15%	Wait for Parliament
The first pay bracket at 131%	up to 200,000 lek per month	up to 300,000 lek per month	Wait for Parliament
The new 30% range	does not exist	over 700,000 lek per month	Wait for Parliament

Why it matters to see them together with the threshold

Because some businesses that become VAT-registered on January 1, 2027 may enter directly under the new rate. If Parliament approves the increase to 21 percent with the same effective date, the above calculations will change in figures while the logic remains the same.

There is also a second, less obvious interplay. Let's take a grocery store that is VAT-registered with 5,000,000 lek turnover. If the 6 percent rate is approved for the 14 basic categories, it will be able to apply the reduced VAT rate on sales. Meanwhile, a portion of purchases and expenses will remain at the higher rate. In that case, it can systematically generate a credit surplus—that is, the position described above—with carryforward and a refund period.

None of these items is law yet. They're mentioned here because January planning is done only once, and it's better to do it by looking at everything together. You can find the full treatment in Article on the 2027 fiscal package, which is updated whenever the status changes.

Frequently asked questions

Is the threshold measured in 2026 or in 2027?

For the year 2027, the figure of 5,000,000 lek applies for periods starting January 1, 2027, while the year 2026 remains capped at 10,000,000 lek. Measurement is made on a calendar-year basis, because Article 75, paragraph 1 of the directive explicitly states that a consecutive 12-month period is considered a calendar year. Therefore, a single cumulative column from January 1 is sufficient.

I crossed the threshold in the middle of the month. From which day does the deadline start?

The law states that, as of the last day of that calendar month, Article 122, paragraph 1 applies. The example in the instruction, in Article 75, paragraph 2, counts 15 days from the very day of the sale that exceeded the threshold. Since the instruction is the text enforced by the administration, count from the day of the threshold crossing.

Does the sale of the company car count toward turnover?

No, when it is treated as an investment asset and not held for sale. Article 119, paragraph 2, letter “a” explicitly excludes it.

I crossed the threshold within six months. Should I wait for it to reach twelve?

No. Article 122(1) of the law and Article 75(2) of the directive require immediate registration, within 15 days from the date of exceeding the threshold. VAT is calculated only on the amount by which you exceeded the threshold and on any subsequent sales.

My turnover has dropped. Do I immediately opt out of VAT?

No. The application is made only after you have completed a full calendar year, from January 1 to December 31, with turnover below the threshold, under Article 75, paragraph 3, of the Directive. Then the administration monitors you for 12 months and, at the end, approves or rejects the application. If you registered voluntarily, you must have remained registered for at least two calendar years, and deregistration takes effect six months after the request.

I'm under 5,000,000 lek. Can I register voluntarily?

Yes. Article 120 allows it regardless of turnover, and as of January 1, 2027, the 5,000,000 lek threshold set by the implementing act will also be removed. Keep in mind the minimum two-year holding period.

How much will it actually cost me to register for VAT?

Not 20 percent of turnover, as is often thought. You pay the difference between the VAT on sales and that on purchases, which is about one-sixth of your gross margin if prices remain unchanged. For a business with 6,000,000 lek sales and 4,500,000 lek purchases, this amounts to about 250,000 lek per year.

I only sell to other businesses. Will registering be a burden?

In most cases, no—quite the opposite. Your registered buyer deducts the VAT you invoice, so the actual price for them doesn't change. Meanwhile, you gain the right to deduct the VAT on your purchases. The real burden remains on cash flow and the monthly reporting work.

Does this decision change anything for inns and hotels?

Not for the rate. Accommodation remains 6% under Article 49 of the law. Only the threshold changes, meaning a small accommodation establishment with turnover between 5 and 10 million lek will become subject to VAT from 2027.

The date January 1, 2027 is not a proposal that can be changed in Parliament. It is written in a published decision. A business that begins counting in January will discover crossing the threshold with a delay, and the delay here is measured at 15 days.

We build the cumulative turnover table and review it every month for our clients, along with recalculating prices for the new regime. If you'd like us to review your turnover for the past 12 months together and tell you specifically whether it affects you, write to us. We're happy to help.

Legal basis

• Decision of the Council of Ministers No. 822, dated October 28, 2026, Official Gazette No. 233, dated October 29, 2026, page 24117.
• Decision of the Council of Ministers No. 953, dated December 29, 2014, as amended, Article 11, paragraphs 1 and 2, and Article 11/1.
• Law No. 92/2014 “On Value Added Tax in the Republic of Albania,” as amended through Law No. 80/2025 of December 11, 2025, Articles 32, 33, 48, 49, 53, 76, 77, 89, 91, 93, 106, 107, 109, 110, 117 through 122, 146, 147, 148, 156 and 157.
• Ministry of Finance Instruction No. 6, dated January 30, 2015, “On Value Added Tax in the Republic of Albania,” updated text, most recently amended by Instruction No. 6, dated February 24, 2025, Articles 5, 6, 7, 70, 71, 72, 73, 74, 75 and 76.