Albania’s tax system 2026

The 0% rate until 2029 — the core of the regime

The main relief in the Albanian system is the 0% profit tax rate, set out in Article 69, paragraph 1, letter “dh” of Law no. 29/2023. It applies until 31 December 2029 to any sole trader, self-employed person or legal entity (LLC), on a single condition: annual gross turnover must not exceed ALL 14,000,000 (roughly €135,000–140,000). Legal form and type of activity are irrelevant for this threshold.

Why does this measure exist?

• To attract foreign capital and compete with Eastern European markets;
• To encourage the formalisation of micro-businesses, pushing them to register;
• To ease the tax burden on small enterprises after the COVID-19 pandemic.

Liberal professions also benefit from 0%

Initially, Decision of the Council of Ministers no. 753/2023 attempted to exclude the liberal professions (doctors, lawyers, accountants, architects) from the 0% scheme. That restriction was struck down by the Constitutional Court in Decision no. 52, dated 27 June 2024. As a result, liberal professions with gross turnover up to ALL 14 million also enjoy the 0% rate until the end of 2029.

Tax overview 2026 — rates by category

Strategic sectors at 5%

The law provides a reduced 5% rate for certain specific sectors, regardless of turnover level. These reliefs apply until 31 December 2029 and cover:

• Entities certified as “agritourism” under tourism legislation;
• Entities operating in the automotive industry;
• Agricultural cooperation companies under Law no. 38/2012.

What happens above the ALL 14 million threshold

This is the most misunderstood part of the law. When turnover exceeds the threshold, the regime changes depending on the legal form of the taxpayer.

Entities (LLCs and other legal persons)

Entities pay the standard corporate profit tax of 15% on taxable profit (Article 15). There is no progressive rate: the whole profit is taxed at 15%. When the company distributes profit to partners, the 8% dividend tax applies.

Individuals (sole traders and self-employed)

The legal basis is Article 24, paragraph 2, which sets progressive rates on net taxable income (profit = income minus deductible expenses):

• 15% on net profit from 0 to ALL 14,000,000;
• 23% on the portion of net profit exceeding ALL 14,000,000.

Who falls where: professional services vs other activities

• Professional service activities (lawyers, consultants, doctors, architects, accountants): the Article 24 rates have been in force since 1 January 2024. However, thanks to Article 69 and Decision no. 52/2024, those with turnover up to ALL 14m enjoy 0% until 31.12.2029;
• Other activities (production, trade, transport, crafts): the new rates take effect only from 2030. Until then they remain in the 0% scheme up to the ALL 14m turnover threshold.

So, the 0% rate until 2029 is a transitional regime layered on top of the Article 24 rates: although Article 24 provides for 15% from the first lek, Article 69 effectively reduces it to 0% for gross turnover up to ALL 14m, until 31.12.2029.

Why does the 23% progressive rate exist?

The 23% rate was introduced as an anti-avoidance measure. Some entrepreneurs with very high profits deliberately kept sole-trader status (instead of an LLC) precisely to avoid the 8% dividend tax.

Obligations that remain even at 0%

The 0% rate does not exempt a business from declaration and administrative duties. Every business must:

• File the annual profit tax return by 31 March of the following year;
• Keep accounting books and the purchase-sales register;
• Issue tax invoices through fiscal devices (fiscalisation);
• Pay social and health insurance contributions;
• Register for VAT once turnover exceeds ALL 10 million (within 15 days).

Failure to file triggers administrative penalties, even when no tax is due.

New 2026 developments to watch

• The “fiscal peace” — a voluntary agreement with the tax administration for businesses with turnover above ALL 14m (Law no. 84/2025, in force from 1 January 2026, effective until end of 2028);
• The minimum wage rose from ALL 40,000 to 50,000, affecting contributions;
• The cash-payment ceiling between businesses fell from ALL 150,000 to 100,000;
• Reclassification of the self-employed (Art. 12/”ç”): if 80%+ of income comes from a single client (or 90%+ from fewer than three), the administration may treat it as employment income.

Key legal references

• Law no. 29/2023 “On Income Tax”, as amended — the base act (in force from 1 January 2024);
• Article 69 — transitional rates and reliefs until 31.12.2029;
• Article 15 — standard corporate profit tax rate (15%);
• Article 24, paragraph 2 — progressive 15%/23% rates on net profit for individuals;
• Article 14 — the special “a priori” expenses regime (turnover up to 10m);
• Constitutional Court Decision no. 52, dated 27.06.2024 — striking down the restriction on liberal professions;
• Decision no. 730/2018 — the 5% software rate (expired 31.12.2025);
• Law no. 84/2025 — the Fiscal Peace Agreement;
• Law no. 38/2012 “On Agricultural Cooperation Companies”.

Methodological note. This material is for information only and reflects the legal framework in force in 2026. Tax legislation changes frequently; for concrete decisions, consulting an expert is recommended. Vision Consulting offers tailored analysis for your situation.