{"id":54507,"date":"2026-08-03T13:04:54","date_gmt":"2026-08-03T13:04:54","guid":{"rendered":"https:\/\/alprofitconsult.al\/?page_id=54507"},"modified":"2026-08-03T21:22:37","modified_gmt":"2026-08-03T21:22:37","slug":"prepayments","status":"publish","type":"page","link":"https:\/\/alprofitconsult.al\/en\/tatime\/tatimi-mbi-fitimin\/parapagimet\/","title":{"rendered":"How are tax prepayments calculated?"},"content":{"rendered":"

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Home Page<\/a><\/span> | Tax legislation<\/a><\/span> | Profit Tax<\/a><\/span> | How are tax prepayments calculated?<\/span><\/span><\/div>\n\n\n

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The income tax is not paid in full in March. During the year, advance installments are paid, calculated based on the previous year's tax, and in March of the following year only the difference is paid. When the installments exceed the actual liability, the difference remains as a credit.<\/p>\n\n\n\n

This page explains how each installment is calculated, why the first quarter has a special formula, how a review is requested when earnings decline, what happens when an installment is not paid, and what the full year's calculation with figures looks like.<\/p>\n\n\n\n

Read also: Profit tax rates and thresholds<\/a>.<\/p>\n\n\n\n

Short answer<\/h2>\n\n\n\n

The basis for the installments is the prior year's income tax, apportioned according to the payment schedule. The law provides for quarterly installments, due on March 31, June 30, September 30, and December 31, and monthly installments, due on the 15th of each month.<\/p>\n\n\n\n

The most important practical consequence is that when the tax for the previous year is zero, no installments arise. A business under the 0% regime until 2029, or a business that closed the year with a loss, pays nothing during the year.<\/p>\n\n\n\n

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Attention. The law provides for two payment schedules, quarterly and monthly. The correct classification of taxpayers for each schedule must be confirmed for your case, because the payment deadline varies from monthly to quarterly.<\/p>\n<\/blockquote>\n\n\n\n

Read also: Who doesn't pay tax until 2029<\/a>.<\/p>\n\n\n\n

Base of calculation<\/h2>\n\n\n\n

The tax is not calculated on the profit of the coming year, because that is not yet known. It is calculated on the tax for the closed year, that is, on a known and declared figure.<\/p>\n\n\n\n

Element<\/th>Rule<\/th><\/tr>
Base<\/td>Tax on the previous year's profit<\/td><\/tr>
Quarterly rhythm<\/td>Deadlines: March 31, June 30, September 30, December 31<\/td><\/tr>
Monthly rhythm<\/td>The deadline is the 15th of the month.<\/td><\/tr>
January, February, March on a monthly basis<\/td>One-twelfth of the tax from two years ago.<\/td><\/tr>
April through December on a monthly basis<\/td>One twelfth of the tax from the previous year.<\/td><\/tr>
When the tax for the previous year is zero<\/td>Kestrels are not born.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Why January, February, and March have a special formula<\/h3>\n\n\n\n

Because in January the tax for the year that just ended has not yet been declared. The annual return is filed by March 31, so for the first three months the law uses the figure from the previous year\u2014that is, from two years ago\u2014and from April it switches to the figure from the year before that.<\/p>\n\n\n\n

This is why in April the installment can change significantly in both directions. It's not a system error; it's the application of the formula.<\/p>\n\n\n\n

Calculated example, step by step<\/h2>\n\n\n\n

Service company, on a monthly basis. The profit tax for 2024 is 1,200,000 lek. The profit tax for 2025 is 1,800,000 lek.<\/p>\n\n\n\n

Step 1. The January, February, and March 2026 installments are calculated based on the 2024 tax, so 1,200,000 \/ 12 = 100,000 lek\u00eb per month.<\/p>\n\n\n\n

Step 2. The April through December 2026 installments are calculated on the 2025 tax, i.e., 1,800,000 \/ 12 = 150,000 lek\u00eb per month.<\/p>\n\n\n\n

Step 3. The total prepaid for 2026 is 3 \u00d7 100,000 = 300,000 lek\u00eb, plus 9 \u00d7 150,000 = 1,350,000 lek\u00eb, for a total of 1,650,000 lek\u00eb.<\/p>\n\n\n\n

Step 4. In the annual return filed by March 31, 2027, it appears that the actual tax for the year 2026 is 2,100,000 lek\u00eb.<\/p>\n\n\n\n

Step 5. The amount due is 2,100,000 \u2013 1,650,000 = 450,000 lek\u00eb, paid together with the declaration.<\/p>\n\n\n\n

Period<\/th>Base of the stumps<\/th>Monthly installment<\/th>Total<\/th><\/tr>
January, February, March 2026<\/td>Tax 2024, 1,200,000 lek<\/td>100,000 lek<\/td>300,000 lek<\/td><\/tr>
April to December 2026<\/td>Tax 2025, 1,800,000 lek<\/td>150,000 lek<\/td>1,350,000 lek<\/td><\/tr>
Total prepayments 2026<\/td><\/td><\/td>1,650,000 lek<\/td><\/tr>
Actual Tax 2026<\/td><\/td><\/td>2,100,000 lek<\/td><\/tr>
Balance as of March 31, 2027<\/td><\/td><\/td>450,000 lek<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

On a quarterly basis, with the same annual tax of 1,800,000 lek\u00eb, the installment would be 1,800,000 \/ 4 = 450,000 lek\u00eb per quarter.<\/p>\n\n\n\n

Read also: Tax calendar with the year's deadlines<\/a>.<\/p>\n\n\n\n

Review when profits fall<\/h2>\n\n\n\n

The formula looks backward, while the business lives in the present. When the current year is performing significantly worse than the previous one, paying installments based on the old figure pulls money out of circulation for no reason.<\/p>\n\n\n\n

Read also: What needs to be checked at the end of the quarter?<\/a>.<\/p>\n\n\n\n

For this reason, the law provides for the possibility of reviewing the installments when expected profit declines. The request is submitted in writing to the tax administration and is accompanied by a numerical argument, that is, figures showing the decline, including actual turnover, the margin, closed or lost contracts, and the year's forecast.<\/p>\n\n\n\n

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Company tax of 1,800,000 lek in 2025 and quarterly installments of 450,000 lek. In the first half of 2026, revenue falls by 40% after losing a key client, and the year's expected profit is about 4,000,000 lek, so tax is around 600,000 lek. Payment of the four installments of 450,000 lek\u00eb would yield 1,800,000 lek\u00eb, i.e., three times the actual liability. In this case, a request for review makes practical sense.<\/p>\n<\/blockquote>\n\n\n\n

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Please note: The exact requirements for request acceptance, the accompanying documentation, and the deadline for submission must be confirmed before submission. Send us your six-month figures, and we will get back to you if your case meets the requirements.<\/p>\n<\/blockquote>\n\n\n\n

When the installment is higher than the actual obligation.<\/h2>\n\n\n\n

The surplus is not lost. It appears on the annual return and is treated under the rules for tax surpluses, that is, as a carryforward or a refundable amount. This is the long way around, so timely review is usually the best solution rather than seeking a refund later.<\/p>\n\n\n\n

Read also: Refund of prepaid tax installments<\/a>.<\/p>\n\n\n\n

When the installment is not paid<\/h2>\n\n\n\n

Failure to pay installments on time is treated as failure to pay a tax obligation. The base penalty is 0.061 TP3T of the unpaid liability for each day of delay, capped at 365 days, and in addition to the penalty, late interest also applies.<\/p>\n\n\n\n

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Installment of 450,000 lek, paid 40 days late. The penalty for non-payment is 450,000 \u00d7 0.061% \u00d7 40 = 10,800 lek. In addition, late interest is calculated, currently at 7.8% per year, according to the formula applied by the system.<\/p>\n<\/blockquote>\n\n\n\n

At a general level, fines for a single obligation do not exceed 100% of the obligation. When the difficulty is real and surmountable, the law also provides for an installment agreement, which requires an immediate payment of 20% of the obligation.<\/p>\n\n\n\n

Read also: Tax penalties, interest charges, and installments<\/a>.<\/p>\n\n\n\n

Cases that change the calculation<\/h2>\n\n\n\n

First year of business<\/h3>\n\n\n\n

In the first year there is no prior-year tax, so the installment base is missing. The specific treatment of the first year depends on the registration form and the data declared, so each case is reviewed individually before any liability is expected.<\/p>\n\n\n\n

Last year the tax was zero; this year there is a profit.<\/h3>\n\n\n\n

During the year, no installment is paid because the base is zero. The full obligation appears in March of the following year, and the new year's installments begin then as well. For a business that exceeds the 14,000,000 lek threshold, this overlap is strongly felt in its cash flow.<\/p>\n\n\n\n

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A business that exceeds the threshold in 2027 with a taxable profit of 3,000,000 lek pays by March 31, 2028 an annual tax of 450,000 lek, and within the first quarter of 2028 also the first installment of approximately 112,500 lek. In three months, about 562,500 lek, for a business that paid zero last year.<\/p>\n<\/blockquote>\n\n\n\n

The year ends with a loss.<\/h3>\n\n\n\n

The tax for the year is zero, so no installments arise for the following year. This is one of the practical consequences of carrying forward losses.<\/p>\n\n\n\n

Read also: How the loss will be carried over into the coming years.<\/a>.<\/p>\n\n\n\n

How are the installments controlled throughout the year?<\/h2>\n\n\n\n

\u2714 The tax figures for the previous year and the year before are kept on record, because they both serve as the basis for the installments.
\u2714 Scheduled installments are placed on the payment calendar in January, not on the due date.
\u2714 The six-month result is compared with last year, because it's the moment to turn back from the review.
A possible surplus is identified before year-end, not in March.
\u2714 The annual declaration is filed by March 31, even if the tax is zero and even if there was no activity.<\/p>\n\n\n\n

The mistakes we see<\/h2>\n\n\n\n