Corporate income tax
The standard corporate income tax rate is 15%. Smaller businesses benefit from an exemption below an annual turnover threshold. That threshold is a cliff edge, not a band: crossing it brings ordinary taxation on the whole profit, not only on the excess. It is the point where loose planning produces the most expensive mistakes.
VAT
The standard VAT rate is 20%. Reduced rates apply to certain sectors — accommodation and agritourism, book publishing, specific agricultural inputs. VAT registration becomes compulsory above a turnover threshold measured over a rolling twelve months, and is available voluntarily below it: for a business with significant input costs, voluntary registration can pay for itself through recovery.
Withholding taxes
Distributed dividends carry an 8% withholding. Interest, royalties and certain service fees paid to non-residents are ordinarily subject to a 15% withholding, unless a double tax treaty reduces it. Checking which treaty applies, and completing the formalities to rely on it, has to happen before payment, not after.
Personal income tax
Personal income tax operates on two rates: the ordinary rate applies up to an annual income threshold, above which the higher rate takes over. Tax residence rules matter too: spending more than the statutory period in Albania can make an individual tax resident there, with consequences for the taxation of foreign-source income.
Filings and deadlines
The ordinary calendar covers periodic VAT returns and payments for registered businesses, corporate tax instalments, monthly payroll filings, and the annual income tax return with the accounts. Deadlines are firm, and late-filing penalties apply even to nil returns.
Double tax treaties
Albania has concluded a substantial network of double tax treaties, including with the main European countries. A treaty can reduce withholding on dividends, interest and royalties, and sets out how taxing rights are allocated. It does not apply automatically: it requires tax residence documentation for the recipient and must be handled in advance.
The regulatory, tax and macroeconomic figures on this page come from secondary sources and are being verified against the official sources cited. They are general information, not tax or legal advice.