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
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
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
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

All returns are filed electronically through e-Filing (efiling.tatime.gov.al) (tatime.gov.al: Forma e deklaratës). 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.

Failure	Penalty	Source
Late filing of a return	ALL 10,000 per return for corporate income taxpayers	Law 9920/2008 art. 113(a)
Late payment of tax	0.06% of the unpaid amount per day, for at most 365 days	Law 9920/2008 art. 114(1)
Late payment of advance instalments	0.06% of the unpaid amount per day, for at most 365 days	Law 9920/2008 art. 114/1
Incorrect return	0.06% of the unpaid tax per day, for at most 365 days; 20% of any overstated credit balance cut on audit	Law 9920/2008 art. 115
Tax evasion (concealment, false documents)	100% of the tax understated	Law 9920/2008 art. 116(1)
Withholding agent withheld but did not transfer	0.06% per day, for at most 365 days	Law 9920/2008 art. 117(a)
Withholding agent did not withhold	50% of the tax	Law 9920/2008 art. 117(b)
Withholding agent withheld but did not declare or pay	100% of the tax	Law 9920/2008 art. 117(c)
Late controlled transactions notice	ALL 10,000 per month late	Law 9920/2008 art. 115/1(1)
Treaty documentation not filed by the end of the following year	ALL 10,000 per month, up to 24 months; then treaty benefit lost	Law 9920/2008 art. 115/3
Failure to register or update registration	ALL 15,000 for legal persons	Law 9920/2008 art. 112

Late payment interest (kamatëvonesë) runs from the due date to the payment date at 120% of the Bank of Albania interbank rate, set each quarter from the previous quarter's average. The General Directorate publishes the rate in use on its website (Law 9920/2008 art. 76(1), (3)). Interest cannot be waived (art. 76(4)). The current quarter's rate was not read for this skill.

Where a taxpayer that produced transfer pricing documentation is adjusted, it pays the extra tax and interest but not the penalty (art. 115/1(3)).

Cross-border points

Withholding on payments by Albanian residents and PEs (Law 29/2023 arts. 58, 59). Final withholding applies when paid to a non-resident without an Albanian PE:

• Dividends: 8%.
• Interest and royalties: 15%.
• Payments for services, except services received physically outside Albania: 15%.
• Insurance services, directors' fees, construction and installation work, and payments for performers and sportspeople: 15%.

Dividends, interest and royalties paid to Albanian residents and PEs are also subject to withholding as a final tax (art. 58(1)). No withholding applies to exempt persons, to dividends meeting the art. 29 participation exemption, to interest and capital gains on eurobonds issued by the Republic of Albania paid to non-resident entities without an Albanian PE, or to interest paid to banks and financial institutions (art. 58(3)). The eurobond rule covers entities only; for non-resident individuals, eurobond interest and gains are exempt investment income under art. 15(2)(c). Treaty rates can be lower; the payer must file treaty documentation by the end of the following year (Law 9920/2008 art. 115/3).

Low-tax jurisdictions. Law 29/2023 has no separate withholding rate for payments to low-tax jurisdictions. Instead, transactions with residents of the jurisdictions listed in Annex 1 to Instruction 29/2023 are "controlled transactions" under the transfer pricing rules even if the parties are unrelated (art. 32(2)(ç); Instruction 29/2023 point 3.6). The list is set out in al-transfer-pricing.

Not an EU member. The EU Parent-Subsidiary and Interest-Royalties Directives do not apply. Law 29/2023 is partly aligned with the Anti-Tax Avoidance Directive (2016/1164) and the Merger Directive (2009/133/EC) (footnote 1 to the law).

CFC rules. Law 29/2023 art. 19 sets controlled foreign company rules (more than 50% control, foreign tax under 50% of Albanian tax, passive income over 30% of profit), but places them in the personal income tax chapter and applies them to individuals. No corporate CFC rule appears in the corporate chapter.

Exit tax (art. 47). A resident that moves assets from its Albanian head office to a foreign PE, or moves its tax residence abroad, is taxed on the market value of the assets less their tax value, unless the assets stay connected with an Albanian PE. Assets moving into Albania take market value as their tax base.

Transfer pricing (arts. 32 to 39, 44). Arm's length principle, five OECD methods, an arm's length range with adjustment to its median, advance pricing agreements and corresponding adjustments. See al-transfer-pricing for the full rules, the ALL 50,000,000 notice and the Annex 1 list.

Worked examples

Example 1: trading company, standard rate

Drini SHPK is an Albanian resident wholesaler. In 2026 its revenue is ALL 60,000,000, so it is above the ALL 14 million threshold and pays 15%. Accounting profit before tax is ALL 9,000,000. The accounts include ALL 200,000 of fines paid to a public authority (not deductible) and ALL 400,000 of representation costs. The representation cap is 0.3% of annual revenue, ALL 180,000, so ALL 220,000 is added back. Taxable profit is ALL 9,420,000 and tax at 15% is ALL 1,413,000. Advance payments made during 2026 were ALL 1,200,000, so the balance due with the 31 March 2027 return is ALL 213,000.

name: Drini SHPK, 2026, 15% with fines and representation add-backs
inputs:
  revenue: 60000000
  accounting_profit: 9000000
  fines: 200000
  representation: 400000
  advances_paid: 1200000
steps:
  - representation_cap: revenue * 0.003
  - representation_addback: max(representation - representation_cap, 0)
  - taxable_profit: accounting_profit + fines + representation_addback
  - cit: taxable_profit * 0.15
  - balance_due: cit - advances_paid
expected:
  representation_cap: 180000
  representation_addback: 220000
  taxable_profit: 9420000
  cit: 1413000
  balance_due: 213000

Example 2: losses brought forward and a portfolio dividend

Vlora Tech SHA, revenue ALL 30,000,000, made tax losses of ALL 3,000,000 in 2024 and ALL 1,000,000 in 2025. Both arose from 2024 onwards, so art. 54 applies: each can be used for five years, oldest first. There was no change of ownership. In 2026 its taxable profit before losses is ALL 5,000,000. Both losses are used in full (ALL 4,000,000), leaving taxable profit of ALL 1,000,000 and tax at 15% of ALL 150,000.

It also received a dividend of ALL 2,000,000 from an Albanian company in which it holds 5%. That is below the 10% participation threshold, so the dividend is not exempt. The paying company withheld 8%, ALL 160,000, as a final tax (arts. 41, 58(1), 59). The dividend is kept out of the 15% computation. The total Albanian tax borne by Vlora Tech for 2026 is ALL 310,000.

name: Vlora Tech SHA, 2026, losses from 2024 and 2025 plus non-exempt dividend
inputs:
  profit_before_losses: 5000000
  loss_2024: 3000000
  loss_2025: 1000000
  dividend: 2000000
steps:
  - use_2024: min(loss_2024, profit_before_losses)
  - use_2025: min(loss_2025, profit_before_losses - use_2024)
  - taxable_profit: profit_before_losses - use_2024 - use_2025
  - cit: taxable_profit * 0.15
  - dividend_wht: dividend * 0.08
  - total_tax: cit + dividend_wht
expected:
  use_2024: 3000000
  use_2025: 1000000
  taxable_profit: 1000000
  cit: 150000
  dividend_wht: 160000
  total_tax: 310000

Ask the client first

1. Gross income for 2026. At or below ALL 14,000,000 the rate is 0% until 2029; above it, 15% on all taxable profit.
2. Sector and status. Agrotourism certification, agricultural cooperative, automotive industry, or a branded 4 or 5 star special-status hotel changes the rate. Software companies lost their 5% rate after 2025.
3. Where the board meets and who owns and runs the company. A foreign-incorporated company can be Albanian resident under art. 28(2).
4. Losses and ownership changes. The year each loss arose, and whether more than 50% of ownership changed together with the activity.
5. Related-party and foreign payments. Interest, royalties, services and management fees paid abroad drive withholding at 15% (8% for dividends), the 30% EBITDA cap, and the unpaid-fee add-back.
6. Dividends received. Holding percentage and holding period decide between the participation exemption and the 8% rate.

Sources

Source	URL	Read on
Law No. 29/2023 "Për tatimin mbi të ardhurat", consolidated to Law No. 81/2025 (General Directorate of Taxes copy)	https://tatime.gov.al/wp-content/uploads/2026/09/Ligj-Nr.-29-2023-Per-Tatimin-mbi-te-Ardhurat-i-ndryshuar.pdf	2026-10-22
Law No. 9920/2008 "Për procedurat tatimore", consolidated to Law No. 79/2025 (General Directorate of Taxes copy)	https://tatime.gov.al/wp-content/uploads/2026/10/Ligj-Nr-9920-Dt-2008.05.19-perditesuar-1.pdf	2026-10-22
General Instruction No. 26 of 8.9.2023 "Për tatimin mbi të ardhurat", consolidated to Instruction No. 9 of 12.3.2026, point 30	https://tatime.gov.al/wp-content/uploads/2026/09/Udhezimi-nr-26-date-8.9.2023-Per-tatimin-mbi-te-ardhuart.pdf	2026-10-23
Instruction No. 29 of 16.11.2023 on transfer pricing and advance pricing agreements, points 3.6, 14.1, 14.3 and Annex 1	https://tatime.gov.al/wp-content/uploads/2026/09/UDHEZIM-Nr.29-DT.-16.11.2023-PER-TRANSFERIMIN-E-CMIMIT-DHE-MARREVESHJET-E-CMIMIT-NE-AVANCE.pdf	2026-10-23
General Directorate of Taxes, legislation list	https://tatime.gov.al/legjislacioni/ligje/	2026-10-22
General Directorate of Taxes, commercial companies (15% rate, 8% dividends, 0% up to ALL 14 million until 2029)	https://tatime.gov.al/entitete/?artikull=shoqerite-tregtare	2026-10-22
General Directorate of Taxes, return form and e-Filing	https://tatime.gov.al/entitete/?artikull=forma-e-deklarates-2	2026-10-22
General Directorate of Taxes, completing and amending returns	https://tatime.gov.al/entitete/?artikull=plotesimi-i-deklaratave-2	2026-10-22
General Directorate of Taxes, tax returns and payment	https://tatime.gov.al/entitete/?artikull=deklaratat-tatimore-2	2026-10-22
Official Publications Centre, Law 29/2023 entry	https://qbz.gov.al/eli/ligj/2023/03/30/29	2026-10-22: page loads only a script shell and could not be read; not relied on for any figure

Not yet confirmed: the payment date for the final balance of corporate income tax for resident entities (Law 29/2023 art. 61 sets only the return date); the current quarter's late payment interest rate published under Law 9920/2008 art. 76(3); the Bank of Albania 12-month average lending rate that caps deductible interest under art. 50(1)(dh); treatment of tax losses from 2023 and earlier; Albania's position on Pillar Two beyond the absence of rules in Law 29/2023; the official name of the annual corporate return form on e-Filing.

Contributed by Ryan Duguid.