Tirana, January 2025 — Albania has officially introduced a new income tax framework, marking one of the most significant tax reforms in recent years. The legislation, effective January 1, 2025, replaces the country’s previous income tax law with updated rules designed to modernize the system and encourage business growth.
Under the new law, companies with annual revenues up to ALL 14 million (approximately €135,000) will continue to benefit from a 0% corporate income tax rate until December 31, 2029, provided they operate outside designated professional service categories. For larger businesses, a flat 15% corporate tax applies on taxable profits.
The reform also brings changes to personal income taxation. Employment income will now be taxed progressively, with rates adjusted according to income brackets. Meanwhile, non-residents remain subject to tax only on income earned within Albania.
Authorities state that the reform aligns Albanian tax policy more closely with European standards, aiming to attract foreign investors while supporting local entrepreneurs.
The updated law introduces new compliance obligations and reporting requirements for businesses operating in Albania, underscoring the importance of professional tax planning.
The government expects the reform to boost economic activity by providing clearer incentives for small businesses and aligning corporate taxation with regional practices.