On the eve of the 2025 summer tourist season, the General Directorate of Taxes has published a Notice for accommodation facilities<\/a> (hotels, guesthouses, resorts, etc.) related to billing and correct implementation of tax legislation. This guideline aims to facilitate reporting procedures and ensure compliance with\u00a0VKM No. 160, dated 03\/12\/2025<\/a>. The main points that accommodation businesses should consider are:<\/p>\n\n\n\n In every fiscalized invoice for accommodation services, the item description must necessarily begin with the word \u201cRoom.\u201d This ensures that the accommodation service is clearly identified and treated with its specific tax regime.<\/p>\n\n\n\n Every invoice must clearly state the number of days or nights the client stayed at the accommodation facility. The use of general descriptions such as \u201cweekly package\u201d or \u201cdaily stay\u201d should be avoided, and instead specify e.g. \u201cRoom \u2013 3 nights\u201d as applicable.<\/p>\n\n\n\n The invoice should clearly separate the accommodation price from other services (e.g., restaurant, pool, beach umbrellas).t<\/a>. This means that if a facility also offers additional services, these must be billed separately from overnight stays, unless an all-inclusive package is sold. For example, a hotel that also operates a private beach must issue a separate invoice for each sun lounger\/umbrella rented to vacationers.<\/p>\n\n\n\n It should be noted that the reduced VAT rate of 6% applies only to the accommodation service in tourist facilities. This preferential rate applies to accommodation (and breakfast, when included in the room rate), according to the categories of establishments defined in tourism legislation. Other services that the hotel may offer (bar, restaurant, spa, etc.) do not benefit from the 6% VAT rate but are taxed at the respective standard rates.<\/p>\n\n\n\n The Tax Administration emphasizes that following these steps increases legal compliance, reduces the need for tax verification, enables the correct benefit of reduced VAT, and contributes to the formalization of the sector. Businesses are encouraged to implement the guidelines and enter the tourist season prepared, avoiding problems with tax reporting.<\/p>\n<\/blockquote>\n\n\n\n In March 2025, the Government approved\u00a0VKM No. 160<\/a>\u00a0which establishes new rules for the period of utilization of accommodation facilities and the minimum level of their utilization capacity. These rules are closely linked to tax compliance, as they aim for realistic declaration of activity during the calendar year. The main terms and obligations arising from this DCM are explained below:<\/p>\n\n\n\n The decision determines that:<\/p>\n\n\n\n \u201cAccommodation structure capacity\u201d<\/em>\u00a0refers to the total number of rooms that the structure makes available to tourists during its operating period.<\/p>\n\n\n\n \u201cUtilization capacity\u201d<\/em>\u00a0it refers to the ratio between the number of occupied rooms and the total capacity over a specific period. So, it's the average percentage of occupied rooms.<\/p>\n\n\n\n \u201cMinimum level of capacity utilization\u201d<\/em>\u00a0is the lowest threshold of capacity utilization (i.e., of room occupancy) required by this decision for the respective period.<\/p>\n\n\n\n The tourist year is divided into two seasons, with an operating period defined for each:<\/p>\n\n\n\n High season (summer)<\/strong> May 1 \u2013 September 30.<\/p>\n\n\n\n Low season (winter):<\/strong>\u00a0October 1 \u2013 April 30 (of the following year). The VKM mandates that accommodation structures must achieve on average at least:<\/p>\n\n\n\n 65% of their capacity during the high season.<\/strong>\u00a0(May-September)<\/p>\n\n\n\n 30% capacity during the low season<\/strong>\u00a0(October-April) \u00a0Entrepreneurs have two alternatives on how to declare the utilization level of the structure:<\/p>\n\n\n\n (1) Report according to the specified minimum level (i.e., 651 TP3T\/301 TP3T per season).<\/p>\n\n\n\n (2) Declare another level (as foreseen by themselves), if they believe their used capacity will be different from the minimum.<\/p>\n<\/blockquote>\n\n\n\n If the entity chooses option (1) and declares during the year that it will meet at least the minimum levels, at the end of the tax period the tax authorities will verify the actual utilization. If the declaration made turns out to be below the minimum level, the tax administration will automatically correct it to the minimum level required by the tax system. In other words, the hotel will be taxed as if it had had 65% (or 30%) of occupied rooms, even if it actually had fewer. This can only be avoided by meeting or exceeding the declared minimum threshold.<\/p>\n\n\n\n If the entity chooses option (2) and declares a utilization percentage according to its own prediction, the tax administration has the right to verify the reality of these figures during or after the season. In cases where it is determined that the declaration does not reflect real data (e.g., it is inflated or manipulated), then the tax authorities will apply alternative valuation methods to calculate tax liabilities. This implies additional on-site or office audits, and a reassessment of turnover\/taxes based on indirect data, which may result in fines or additional liabilities for the entity.<\/p>\n\n\n\n Every entrepreneur of an accommodation facility of defined categories (hotel, guesthouse, motel, resort, B&B, heritage property, etc. \u2013 as listed in the decision) is obliged to declare the data on capacity and utilization rate to the Ministry of Tourism. The deadline is within January of each year for the previous year's period. <\/p>\n\n\n\n The declaration is made through the standard form (Annex 2 of the DCM) and includes capacity data (number of available rooms) and utilization level (average occupancy rate) for each seasonal period. If the capacity changes during the year (e.g., rooms are added or removed), the business must notify the Ministry of Tourism of the change within 15 days.<\/p>\n\n\n\n After collecting the statements, the Ministry of Tourism forwards the declared data to the Tax Directorate and the local municipality where the structure is located, within February. This aims for tax and local authorities to have the declared information for each structure, to cross-reference the data with the fiscalization system and on-site inspections. Any change in capacity reported within the year is also communicated to the tax authorities and the local unit within 15 days.<\/p>\n\n\n\n Since this regulation is new, the decision provides for a special procedure for the first year of implementation. Exceptionally for the year 2025, entities must submit their capacity and utilization level declaration within 30 days of the DCM's entry into force. (The DCM entered into force after its publication in the Official Gazette in March 2025, so the declaration had to be submitted within the following month). <\/p>\n\n\n\n The Ministry of Tourism, for its part, will transmit the data to the Tax Administration and municipalities within 30 days of the declaration deadline. This means that for 2025, the declaration will be made during the spring, while for subsequent years it will normally be made in January. This transitional period was allowed to give businesses time to adapt to the new requirements.<\/p>\n\n\n\n Decision VKM No. 160 is based on Article 64\/1 of the \u201cTourism Law\u201d and tax procedures, providing a legal basis for this mechanism. The goal is to formalize the accommodation sector by ensuring that hotels declare a minimal volume of activity. Critics have pointed out that this measure is unusual for a free market, but the government considers it necessary to combat informality (e.g., inaccurate declaration of nights sold) and to encourage establishments to stay open year-round at a minimal capacity.<\/p>\n<\/blockquote>\n\n\n\n Albanian fiscal legislation provides for several relief and favorable measures for accommodation structures, with the aim of encouraging investments in tourism and reducing the tax burden of this strategic sector. Below are the main fiscal benefits from which such structures can benefit in 2025:<\/p>\n\n\n\n The provision of sleeping (accommodation) services in tourist facilities is taxed with VAT at 6%, a rate that is significantly lower than the standard 20%. This reduced rate applies to hotels, guesthouses, resorts, and other accommodation units categorized according to tourism law<\/a>. For tourism businesses, this represents a significant price advantage over customers compared to other sectors (where the standard VAT remains 20%).\u00a0<\/p>\n\n\n\n Note: Rate 6% applies only to the accommodation service itself (overnight stay, or room and breakfast when the latter is included in the price). Any other service provided by the establishment (food, beverages, spa, events, etc.) is subject to VAT at the applicable rate (usually 20%). This breakdown must also be reflected on the invoice, as mentioned above.<\/p>\n<\/blockquote>\n\n\n\n Albanian law provides for a preferential profit tax on certain investments and tourism businesses:<\/p>\n\n\n\n These are luxury hotels that have obtained special status according to tourism law (they must meet criteria such as 4\/5 star categorization and have a recognized international trademark). For these establishments, the law has offered an exemption from profit tax for a 10-year period<\/a>. This means that for 10 years from the start of activity (but not later than a deadline set by obtaining the status), these businesses do not pay corporate income tax at all. <\/p>\n\n\n\n This stimulus was initially valid for structures obtaining special status until the end of 2024, but it was extended until December 2026 with latest legal changes<\/a>. The start-up period for activity was also eased (the hotel is given up to 5 years after obtaining its status to start operations and enter the 10-year scheme, Three years ago<\/a>This tax exemption, together with the reduced VAT, infrastructure tax, and excluded property tax (see below), constitutes a powerful incentive package for strategic investors in Albania's luxury hospitality sector.<\/p>\n\n\n\nUsage of the term \u201cRoom\u201d on an invoice<\/strong><\/h3>\n\n\n\n
Exact specification of nights of stay<\/strong><\/h3>\n\n\n\n
Clear separation of additional services<\/strong><\/h3>\n\n\n\n
Correct application of the VAT rate<\/strong><\/h3>\n\n\n\n
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VKM No. 160, dated 12.03.2025 \u2013 Utilization Capacity and Mandatory Declaration<\/h2>\n\n\n\n
Key Definitions<\/strong><\/h3>\n\n\n\n
Seasonal use periods<\/strong><\/h3>\n\n\n\n
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Within these ranges, all calendar days are accounted for in the utilized capacity analysis.<\/p>\n<\/blockquote>\n\n\n\nMinimum utilization level<\/strong><\/h3>\n\n\n\n
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These thresholds are valid as an average for each seasonal period, not for each individual day. This means that, for example, a hotel with 100 rooms must have an average of 65 rooms occupied during the summer and 30 during the winter to meet the minimum annual criterion.<\/p>\n<\/blockquote>\n\n\n\nUtilization declaration options<\/strong><\/h3>\n\n\n\n
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Consequences of declaration and non-fulfillment<\/strong><\/h3>\n\n\n\n
Annual declaration procedure<\/strong> <\/h3>\n\n\n\n
Information exchange<\/strong><\/h3>\n\n\n\n
Exclusions and deadlines for 2025<\/strong><\/h3>\n\n\n\n
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Fiscal Facilities for the Accommodation Sector in 2025<\/h2>\n\n\n\n
Reduced VAT for accommodation<\/strong><\/h3>\n\n\n\n
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Reduced or waived tax for specific categories<\/strong><\/h3>\n\n\n\n
Structures \u201c4 or 5 star Hotel\/Resort, special status\u201d<\/strong>\u00a0<\/h4>\n\n\n\n
Agriturismo (certified farm accommodation)<\/strong><\/h4>\n\n\n\n