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# Albania corporate income tax, tax year 2026

> **Source-cited draft.** Drafted from the consolidated texts of Law No. 29/2023 and Law No. 9920/2008, General Instruction No. 26/2023 (as amended to Instruction No. 9/2026) and Instruction No. 29/2023 on transfer pricing, published by the General Directorate of Taxes, read on 2026-10-22 and 2026-10-23. No accountant has reviewed it. Do not file from it without review by a qualified Albanian professional.

Tax year: the calendar year, 1 January to 31 December (Law 29/2023, art. 6). Currency: Albanian lek (ALL). Authority: Drejtoria e Përgjithshme e Tatimeve (General Directorate of Taxes), tatime.gov.al.

See also: `albania-income-tax` (individuals, self-employed, sole traders), `al-transfer-pricing`, `albania-vat`, `albania-payroll`, `albania-social-contributions`, `albania-tax-optimization`.

## Who this applies to

**Entities in scope.** Every entity is subject to corporate income tax, in particular general partnerships (shoqëri kolektive), limited partnerships (shoqëri komandite), limited liability companies (SHPK), joint stock companies (SHA), and any other entity, including non-resident entities and entities under a special tax regime (art. 27(1)). "Entity" is defined widely: companies, profit and non-profit organisations, foreign trusts, joint ventures and partnerships with legal form (art. 3(3)).

**Residence.** An entity is resident in a tax year if it was established in Albania, or if at any time in the year its management and control is exercised in Albania (art. 28(1)). Management and control is in Albania if board meetings are held there, or if at least two of these are true: day-to-day management decisions are taken in Albania; at least 50% of board members or managers are Albanian residents; at least 50% of capital or voting rights are held, directly or indirectly, by Albanian residents (art. 28(2)). Note the third test: an Albanian-owned foreign company can become resident.

**Resident entities** are taxed on worldwide income (art. 2(1)).

**Non-residents** are taxed on income attributable to an Albanian permanent establishment and on other Albanian-source income (art. 2(2)). A permanent establishment (selia e përhershme) is a fixed place of business: a place of management, branch, office, factory, workshop, mine or quarry (art. 5(2)). A building or construction site counts only if it lasts more than six months in any 12-month period; services, including consulting, furnished through employees count only if they continue more than six months in any 12-month period; natural-resource exploration with substantial equipment counts after three months (art. 5(2)(e), (ë), (f)). A dependent agent who habitually concludes contracts creates a PE (art. 5(5)). Preparatory or auxiliary activities do not (art. 5(3)).

**Exempt entities** (art. 27(2)): central government bodies; the Bank of Albania, the Financial Supervisory Authority and the Deposit Insurance Agency; certain state development funds; entities carrying on only religious, humanitarian, charitable, scientific or educational activity whose assets or profit do not benefit organisers or members; trade unions and chambers of commerce on the same condition; entities exempt under ratified international agreements; and licensed film production houses subsidised by the National Cinematography Centre. All of these except government bodies and the central bank group must still file the return and financial statements on the normal dates (art. 27(3)).

**Individuals** (self-employed, sole traders, employees) pay personal income tax under the same law and are covered by `albania-income-tax`.

## Rates, bands and thresholds

| Item | Rate or amount | Tax year | Source |
|---|---|---|---|
| Corporate income tax, standard rate | 15% | 2026 | Law 29/2023 art. 41, [tatime.gov.al consolidated text](https://tatime.gov.al/wp-content/uploads/2026/09/Ligj-Nr.-29-2023-Per-Tatimin-mbi-te-Ardhurat-i-ndryshuar.pdf) |
| Dividends received (taxed gross, no costs deducted) | 8% | 2026 | Law 29/2023 art. 41 |
| Entities with gross income up to ALL 14,000,000 a year | 0% until 31 Dec 2029 | 2026 | Law 29/2023 art. 69(1)(dh); [tatime.gov.al: Shoqëritë tregtare](https://tatime.gov.al/entitete/?artikull=shoqerite-tregtare) |
| Certified agrotourism | 5% until 31 Dec 2029 | 2026 | Law 29/2023 art. 69(1)(a) |
| Agricultural cooperation companies (Law 38/2012) | 5% until 31 Dec 2029 | 2026 | Law 29/2023 art. 69(1)(c) |
| Automotive industry | 5% until 31 Dec 2029 | 2026 | Law 29/2023 art. 69(1)(d) |
| Software production or development, entities registered before the law | 5% ended 31 Dec 2025; standard rules from 2026 | 2025 only | Law 29/2023 art. 69(1)(ç) |
| 4 and 5 star "special status" hotels and resorts with an international brand | Exempt for 10 years, for structures obtaining special status by December 2026 | 2026 | Law 29/2023 art. 69(1)(b) |
| Interest deduction cap | 30% of EBITDA (profit + taxes + interest + depreciation and amortisation); excess carried forward 5 years | 2026 | Law 29/2023 art. 30; [Instruction 26/2023 points 30.2, 30.4](https://tatime.gov.al/wp-content/uploads/2026/09/Udhezimi-nr-26-date-8.9.2023-Per-tatimin-mbi-te-ardhuart.pdf) |
| Representation and entertainment costs | Deductible up to 0.3% of annual revenue | 2026 | Law 29/2023 art. 50(1)(g) |
| Employee life and health insurance | Deductible up to 5% of gross wages | 2026 | Law 29/2023 art. 50(1)(ll) |
| Loss carry-forward | 5 years, first in first out; no carry-back | 2026 | Law 29/2023 art. 54 |
| Withholding on dividends | 8% | 2026 | Law 29/2023 art. 59 |
| Withholding on interest, royalties, services, and other art. 58 payments | 15% | 2026 | Law 29/2023 art. 59 |
| Surcharges or local taxes on profit | None in Law 29/2023. Art. 71(2) repealed the simplified profit tax in Chapter III of Law 9632/2006 on local taxes | 2026 | Law 29/2023 art. 71(2) |
| Minimum tax | None in Law 29/2023 | 2026 | Law 29/2023 |
| Pillar Two (15% global minimum tax) | No provision in the consolidated Law 29/2023 read today; Albania is not an EU member, so the EU directive does not apply directly | 2026 | Law 29/2023 |

**The ALL 14 million rule is a threshold, not a band.** Art. 69(1)(dh) applies the 0% rate to entities "with gross income up to ALL 14 million a year". It does not say the first ALL 14 million of a larger entity is taxed at 0%. Read literally, an entity with gross income of ALL 14,000,001 pays 15% on all its taxable profit. Confirm with the client's adviser how gross income is measured (the law does not define "gross income" in this article) before relying on the threshold near the line.

## The taxable base

**Starting point.** Taxable profit is all income in the tax year less deductible expenses, determined from the financial statements prepared under the accounting law and adjusted by Law 29/2023 (art. 43). All activities of an entity are business activities and all its income is business income (art. 40(1)). From the Law 81/2025 amendment, sponsorship received is not taxable income of the recipient up to the limits in art. 50(1)(p) (art. 40(1/1)). Expenses are deductible if they are actually incurred to earn profit, are in the business interest, are documented and are not restricted (art. 48). The supporting document is the invoice under the invoice and fiscalisation law (art. 62(2)).

**Main add-backs** (art. 50(1)):
- Purchase and improvement of land; cost of depreciable assets (relieved through tax depreciation instead).
- Accounting depreciation (replaced by art. 51 tax depreciation).
- Dividends paid.
- Interest above the Bank of Albania's published 12-month average lending rate of commercial banks (microcredit loans excepted).
- Fines and penalties paid to public authorities.
- Provisions and reserves, unless the law allows them.
- Corporate income tax itself, creditable VAT, and excise paid by excise-goods operators.
- Representation and entertainment above 0.3% of annual revenue (exporters with over 70% export revenue in the last three years may deduct trade-fair costs up to 3% of revenue).
- Personal consumption by shareholders, partners, administrators and their families.
- Gifts and donations.
- Technical, consulting and management fees invoiced by non-residents and not paid by the return filing date. They become deductible in the year paid.
- Salaries and other employment payments not paid through a bank or licensed e-money institution.
- Cash payments above the limits in the tax procedures law.
- Employee life and health insurance above 5% of their gross wages.
- Bribes; costs linked to income excluded from taxable profit; undocumented or unreal costs.
- Sponsorship above 5% of pre-tax profit (press, literary, cultural, sport, research) or 3% (other). Qualifying sport sponsorship by entities with taxable profit over ALL 100 million can be deducted at three times its value with a General Directorate authorisation.

**Interest limitation** (art. 30). Net interest expense (interest expense in excess of taxable interest income) is deductible up to 30% of EBITDA. Under General Instruction 26/2023 as amended to Instruction 9/2026, EBITDA starts from profit before tax and adds back the tax-adjusted excess interest and the tax-adjusted depreciation and amortisation (point 30.2); the worked formula is EBITDA = profit + taxes + interest expense + depreciation and amortisation (point 30.4). Exempt income is left out of EBITDA (art. 30(2)). Law 29/2023 art. 30(2) still words the starting point as taxable income; where the two give different numbers, ask before relying on the instruction's figure. Deductible interest is measured after the art. 50(1)(dh) rate cap (point 30.4). Disallowed interest carries forward five years. Worked numbers are in `al-transfer-pricing`. The rule does not apply to banks, non-bank lenders, insurers and leasing companies, or to loans for long-term public infrastructure projects where the operator, assets and income are all in Albania. Law 29/2023 contains no debt-to-equity ratio test; the limits are art. 30 and the interest rate cap in art. 50(1)(dh).

**Depreciation** (art. 51), each asset individually, straight line:
- Buildings, installations and constructions with life over 15 years: 5%.
- Intangible assets: 15%.
- Computers, information systems, software and data storage: 25%.
- All other business assets: 20%.
- Land, art, antiques, jewellery and precious metals: not depreciated.
- Passenger cars (1+4 seats): base capped at 50% of cost including VAT, with cost capped at ALL 10,000,000.
- Assets with a base of ALL 10,000 or less are expensed. Revalued amounts are not depreciated. Depreciation is pro-rated in the year of acquisition and disposal. Small inventory is written off 50% in the year of purchase and 50% the next year (art. 52(3)).

**Bad debts** (art. 53), for unrelated debtors after collection steps: up to 20% if overdue more than 6 months at year end, 40% after 12 months, 60% after 24 months, 85% after 36 months; 100% when written off and all legal steps taken. Banks and insurers have their own rules (art. 31).

**Participation exemption** (art. 29). Dividends received by a resident entity are exempt if it holds at least 10% of capital or voting rights and has held it for an uninterrupted 24 months. The exemption can be claimed before 24 months are reached if the taxpayer gives the tax administration a guarantee for the tax. Dividends that do not qualify are taxed at 8% gross (art. 41). The law has no separate exemption for gains on shares; gains form part of business income at 15%.

**Losses** (art. 54). A tax loss is set against taxable profit of the next five years, oldest first. There is no carry-back. Losses of the current and earlier years are forfeited if more than 50% of shares, quotas or voting rights change hands and the activity also changes. Art. 54 applies to losses arising from 2024 onwards (art. 69(3)); how losses from 2023 and earlier are treated is not stated in the consolidated text read today.

**Ownership change in special sectors** (art. 55). Entities holding mineral or hydrocarbon rights, telecom operators and financial institutions with average turnover of ALL 500 million over the three prior years are treated as selling and reacquiring a proportionate share of their assets at market value when ownership changes by more than 20%. They must notify within 45 days.

**Group relief or fiscal unity.** Law 29/2023 has no group relief or fiscal unity. Each entity files and pays on its own.

**Reorganisations** (art. 46). Mergers, divisions, share exchanges and transfers of a branch of activity do not trigger tax on gains on the assets transferred, except for any cash payment beyond the "qualifying cash payment" (cash of up to 10% in total of the nominal value of the shares or quotas issued or transferred) (art. 46(2), (3)(dh)). The receiving company takes over the transferor's book values, depreciation and reserves (art. 46(4)). A branch transfer qualifies only if the branch is in Albania and both companies are Albanian residents (art. 46(7)).

**Foreign tax credit** (art. 42). Foreign tax on foreign-source income is credited, limited to the Albanian tax on that income, country by country.

## Deadlines and filing

| Obligation | When | Source |
|---|---|---|
| Annual corporate income tax return, filed with the financial statements | By 31 March of the following year (31 March 2027 for tax year 2026) | Law 29/2023 art. 61(2), (5) |
| Advance payments (parapagime) | Quarterly by 31 March, 30 June, 30 September and 31 December; or monthly by the 15th of each month | Law 29/2023 art. 63(2) |
| Advance amount, January to March | Tax for the year before last ÷ 12, per month | Law 29/2023 art. 63(2)(a) |
| Advance amount, April to December | Tax for the previous year ÷ 12, per month | Law 29/2023 art. 63(2)(b) |
| Non-resident entities (art. 68) | Return by 31 March; tax paid when the return is filed; no advance payments | Law 29/2023 art. 68 |
| Withholding tax returns and payment | By the 20th of the month after payment or withholding | Law 29/2023 art. 56(4) |
| Dividend declared but unpaid | Withholding due at the end of the third month after the month of the profit distribution decision; profit allocation decision filed by 31 July each year | Law 29/2023 art. 56(2) |
| Amended return | Within 24 months of the original filing date, if not yet audited | [tatime.gov.al: Plotësimi i deklaratave](https://tatime.gov.al/entitete/?artikull=plotesimi-i-deklaratave-2) |

All returns are filed electronically through e-Filing ([efiling.tatime.gov.al](https://efiling.tatime.gov.al/)) ([tatime.gov.al: Forma e deklaratës](https://tatime.gov.al/entitete/?artikull=forma-e-deklarates-2)). Taxes are paid at second-tier banks or Albanian Post (tatime.gov.al: Deklaratat tatimore).

**Reducing or raising advances.** A taxpayer who shows that the year's tax will be significantly lower can have advances reduced (art. 63(4)). If the first nine months show monthly income more than 10% above last year's average, the authority may raise the last quarter's advances (art. 63(5)). New businesses follow a ministerial instruction (art. 63(3)).

**Refunds.** If advances, withholding and foreign tax credit exceed the tax due, the excess is refunded within 60 days of a claim; if not claimed, it counts as an advance for the next year (art. 40(3)).

**Final payment.** Art. 61 sets the return date. It does not state a separate payment date for the balance of tax for resident entities; in practice the balance is settled with the return. See "Not yet confirmed" below.

**Transfer pricing.** Taxpayers whose controlled transactions, including loan balances, exceed ALL 50,000,000 in total in the period file an annual controlled transactions notice by the corporate return date, 31 March 2027 for tax year 2026 (art. 37(2); Instruction 29/2023 points 14.1, 14.3). Documentation must be produced within 45 days of a request (art. 37(1)). See `al-transfer-pricing`.

## Penalties and interest

All under Law No. 9920/2008 "On tax procedures", consolidated to Law No. 79/2025.

From openaccountants/openaccountants, AGPL-3.0.

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