Many businesses today operate without being registered or declare minimal income because they believe that formalization will immediately bring increased tax obligations. This fear has an understandable basis in old law, but the current law changes the calculation completely.<\/p>\n\n\n\n
Shumica e bizneseve t\u00eb vogla dhe t\u00eb mesme shqiptare mund t\u00eb ushtrojn\u00eb veprimtarin\u00eb e tyre me tatim fitimi 0% deri n\u00eb fund t\u00eb vitit 2029. Ky nuk \u00ebsht\u00eb nj\u00eb premtim apo nj\u00eb propozim. \u00cbsht\u00eb ligji n\u00eb fuqi.<\/p>\n\n\n\n
Law No. 29\/2023 \u201cOn Income Tax<\/a>\u201dIt took effect on January 1, 2024, and completely changed the way profits and personal income are taxed. The basic rates are 15% and 23% for business income, and 13% and 23% for employment income.<\/p>\n\n\n\n The law also provided for a transitional period with significant tax reliefs, which apply until the end of 2029. Among these, the main relief is a 0%% rate on profit tax.<\/p>\n\n\n\n Neni 69, pika 1, germa “dh” i ligjit parashikon norm\u00ebn e tatimit mbi t\u00eb ardhurat 0% deri m\u00eb 31 dhjetor 2029 p\u00ebr:<\/p>\n\n\n\n me nj\u00eb kusht t\u00eb vet\u00ebm: qarkullimi bruto vjetor (t\u00eb ardhurat totale nga shitja e mallrave dhe sh\u00ebrbimeve, pa TVSH) t\u00eb mos kaloj\u00eb 14 milion\u00eb lek\u00eb.<\/p>\n\n\n\n This condition has nothing to do with the type of activity. It has nothing to do with the legal form of the business. It has nothing to do with the geographical area where it operates. The only thing that matters is the turnover level.<\/p>\n\n\n\n If you operate as a sole proprietor, self-employed, or as a legal entity, and your annual turnover is under 14 million Lek, your profit tax is zero Lek. Not 5%%. Not 15%%. Zero.<\/p>\n\n\n\n A self-employed electrician with annual revenue of 4 million lek. Profit tax: 0 lek. The only remaining obligations are social security and health insurance, and VAT if it exceeds the registration threshold.<\/p>\n<\/blockquote>\n\n\n\n An LLC providing services with a turnover of 11 million ALL. Profit tax: 0 ALL. This entity also pays no tax on its profit.<\/p>\n<\/blockquote>\n\n\n\n When the law was first implemented, the government had issued the subordinate legislation Government Decree No. 753\/2023<\/a> which attempted to treat subjects with professional activity differently. Practically, that decision excluded doctors, lawyers, accountants, architects, and other similar professions from the 0% scheme.<\/p>\n\n\n\n The Constitutional Court overturned that decision with decision no. 52, dated June 27, 2024. The direct consequence: even liberal professions, if they have a gross turnover of up to 14 million ALL, benefit from the 0% rate% until the end of 2029. The limits according to the activity set by the CM are invalid.<\/p>\n\n\n\n Read also: How to register a business in Albania and what you need to know from day one.<\/a><\/p>\n\n\n\n The law provides for reduced tax rates also for some specific sectors, regardless of turnover level.<\/p>\n\n\n\n Personat dhe entitetet q\u00eb zhvillojn\u00eb veprimtari prit\u00ebse t\u00eb certifikuar si \u201cagroturiz\u00ebm\u201d sipas legjislacionit t\u00eb turizmit paguajn\u00eb tatim mbi t\u00eb ardhurat me norm\u00ebn 5% deri m\u00eb 31 dhjetor 2029.<\/p>\n\n\n\n Entities acting under law no. 38\/2012 \u201cOn agricultural cooperation societies\"<\/a>\u201dThey are taxed at a rate of 51 TP 3 T until December 31, 2029.<\/p>\n\n\n\n Entities conducting economic activities in the automotive industry benefit from a tax rate of 5%% until December 31, 2029.<\/p>\n\n\n\n Accommodation structures classified as \u201cHotel\/Four- and five-star resort with special status,\u201d under the tourism legislation, and which are holders of an internationally recognized trademark, are fully exempt from corporate income tax for a ten-year period. The effects of the exemption begin when the facility's economic activity commences, but no later than five years after obtaining the status. This relief applies to facilities that receive the special status until December 2026.<\/p>\n\n\n\n Legal entities registered before the entry into force of law no. 29\/2023<\/a> and which practiced software development activities were taxed at a rate of 5%, based on CM no. 730\/2018<\/a>. This transitional convenience has expired on December 31, 2025, and does not apply to entities registered after that date. Software businesses with a turnover below 14 million ALL remain under the general scheme 0%.<\/p>\n\n\n\n The law also provides for other forms of tax relief, which are not always sufficiently recognized by businesses.<\/p>\n\n\n\n If you have income from employment or business, the law provides for deductions from the taxable base. If annual income is up to 600,000 lek, 600,000 lek is deducted from the taxable base. If it exceeds that level, the deduction is 420,000 or 360,000 lek, depending on the bracket. Each child under 18 in care entitles you to an additional deduction of 48,000 lek per year. Education expenses for the child are deductible up to 100,000 lek, provided the total annual income does not exceed 1,200,000 lek.<\/p>\n\n\n\n Voluntary contributions made to a private pension fund are deducted from the taxable base up to the amount of the national minimum monthly wage. The employer can also treat as a recognized expense the contribution they make for their employee, up to the same annual amount.<\/p>\n\n\n\n If a business results in a tax loss in a given year, the loss can be carried forward and offset against profits in future years, up to five years. This rule applies to losses generated from the 2024 tax year onwards.<\/p>\n\n\n\n If you have receivables that have not been collected, the law allows their progressive deduction from the tax base according to the age of the debt: 20% after 6 months, 40% after 12 months, 60% after 24 months, and 85% after 36 months. A full write-off is allowed when all legal collection steps have been taken and the debt has been removed from the accounting books.<\/p>\n\n\n\n Sponsorship expenses are recognized as a deductible expense up to certain limits. The limit is 5% of pre-tax profit for cultural, artistic, sporting, and research and development activities. For other activities, the limit is 3% of pre-tax profit. For the sponsorship of sports teams and athletes holding national titles, the law also provides for the possibility of deducting three times the sponsored amount if the entity has an annual taxable profit exceeding 100 million lek.<\/p>\n\n\n\n Read also: What expenses are considered deductible and how to document them correctly.<\/a><\/p>\n\n\n\n The logic behind not registering is usually based on the assumption that the tax will be high. The reality of the numbers shows the opposite: if turnover is under 14 million lek, the profit tax is zero.<\/p>\n\n\n\n Informality has a real and ongoing cost. The tax administration applies penalties and interest on undeclared liabilities. Any unregistered entity cannot issue invoices according to the fiscalization system, which limits cooperation with other businesses. When it comes time for growth, loan applications, or collaboration with public institutions, a formal tax history is missing.<\/p>\n\n\n\n Registration today does not bring additional tax costs. But it opens the door to opportunities that informality closes.<\/p>\n\n\n\n \u00c7do her\u00eb q\u00eb ka nj\u00eb ndryshim tatimor ose financiar q\u00eb prek biznesin tuaj, ju njoftojm\u00eb direkt n\u00eb email me shpjegim praktik.<\/p>\n \n D\u00ebrgom\u00eb njoftimet falas\n <\/a>\n<\/div>\n\n\n\n Albania has also started the development of free economic zones. TEDA<\/a> Tirana, the first of its kind, is located between Kashar, Vaqarr and the Tirana-Durres highway and is managed by the Municipality of Tirana.<\/p>\n\n\n\n Businesses operating within this zone benefit from several specific tax and fiscal advantages:<\/p>\n\n\n\n Targeted businesses are digital, data centers, automotive, and other high value-added industries. Contract certification goes through the Ministry of Economy and customs authorities.<\/p>\n\n\n\n If your activity falls within these categories, this is a concrete option worth considering carefully.<\/p>\n\n\n\nTatimi 0% mbi fitimin: kush p\u00ebrfiton dhe deri kur<\/h2>\n\n\n\n
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What does this mean specifically<\/h3>\n\n\n\n
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The Constitutional Court's decision and liberal professions<\/h3>\n\n\n\n
Sectoral tax relief<\/h2>\n\n\n\n
Agrotourism<\/h3>\n\n\n\n
Agricultural cooperation<\/h3>\n\n\n\n
Automotive Industry<\/h3>\n\n\n\n
4-5 star hotels and resorts with an international brand<\/h3>\n\n\n\n
Software Production and Development (Completed)<\/h3>\n\n\n\n
Other relief: deductions and tax treatment<\/h2>\n\n\n\n
Personal allowances for individuals<\/h3>\n\n\n\n
Private pensions<\/h3>\n\n\n\n
Carrying losses<\/h3>\n\n\n\n
Bad Debt Deduction<\/h3>\n\n\n\n
Sponsorships<\/h3>\n\n\n\n
When not registering costs more than the tax<\/h2>\n\n\n\n
TEDA and Economic Zones: Specific Incentives<\/h2>\n\n\n\n
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