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flag Albania Albania: Business Environment

In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
The fiscal year in Albania is the calendar year.
Accounting Standards
Since 1 January 2006, a new law on accounting and financial statements has been adopted. Albania now uses the international financial standards (IAS and IFRS).
Accounting Regulation Bodies
Ministry of Finance
Accounting Reports
Accounting reports must be in Albanian and figures must be in Leks (ALL). The report must include the balance of payments, the assets and liabilities of the company, and an annex describing general accounting recommendations. For more information see Investment in Albania 2009.
Publication Requirements
National Accounting Standards (NAS) and International Financial Reporting Standards (IFRS) apply for certain companies, effective January 1st, 2008. Financial Statements must be submitted annually. For more information see the National Center for Business Registration.
Professional Accountancy Bodies
IEKA , Instituti i Ekspertëve Kontabël të Autorizuar të Shqipërisë (Albanian Institute of chartered accountants and auditors).
IKM , Instituti i Kontabilisteve te Miratuar
Certification and Auditing
The audit of the annual financial statements by chartered individual auditors or auditing companies is mandatory for:
- Companies that apply the IFRS, irrespective of their legal form;
- Joint stock companies that apply the National Accounting Standards for financial reporting;
- Limited liability companies that apply the NAS at certain conditions.

For more information see Investment in Albania. You can also contact chartered individual auditors: Tonnuci and Partners, Wolftheiss, KPMG, Deloitte, Ernst & Young, Boga & Associates.
Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
Tatimi mbi Vleren e Shtuar (TVSH) - Value-Added Tax (VAT)
Tax Rate
20%
Reduced Tax Rate
Exports and international services are not subject to VAT.
Providing goods and services linked to financial activities and financial transactions are exempt from VAT. Medicines and medical equipment are also exempt.
Companies are subject to VAT when their annual turnover is more than 5 million ALL (EUR 40,000).
Goods imported and intended for re-export benefit from a temporary import regime and are exempt from VAT. A company subject to VAT can request a refund of its VAT credit in the following conditions:
- The Company must have accumulated VAT credit over at least six consecutive months;
- The total amount to be refunded must be over 400,000 ALL (EUR 3,200).
Other Consumption Taxes
Excise duties are also levied on tobacco (60%), alcoholic drinks (50%), mineral waters (5%) and fuels (50%).

Learn more about Service Providers in Albania on Globaltrade.net, the Directory for International Trade Service Providers.

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Corporate Taxes

Company Tax
15% for companies with an annual turnover higher than ALL 8 million.
Tax Rate For Foreign Companies
The Albanian tax regime differentiates between residents and non-residents. Residents are taxed on all their income. Non-residents are only taxed on their Albanian income.
Capital Gains Taxation
The tax rate on company profits is 10%.
Main Allowable Deductions and Tax Credits
Small companies are not subject to VAT. Double taxation is avoided through tax treaties. Occasional tax relief is granted for selected projects (investments channeled to public services, infrastructure projects, tourism, oil industries); depreciation and depletion. For more information see the IFC page on taxes in Albania. 
Other Corporate Taxes
There is a 15% tax on dividends, shares, interest, payment of copyright and royalties, insurance, financial, management and technical services and the payment of contract workers; real property tax, 10% transfer tax.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Albania Eastern Europe & Central Asia United States Germany
Number of Payments of Taxes per Year 44.0 28.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 357.0 260.0 175.0 207.0
Total Share of Taxes (% of Profit) 38.7 40.5 46.7 46.8

Source: Doing Business - Last Available Data.

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Individual Taxes

Tax Rate

Income tax Progressive rate
From ALL 0 to 30,000 0%
From 30,001 to 130,000 13%
Over ALL 130,001 ALL 13,000 plus 23% of the amount above ALL 130,000
Allowable Deductions and Tax Credits
The minimum monthly taxable income is ALL 10,000. Deductions are granted for medical expenses, insurance and pension annuities and student scholarship.
Special Expatriate Tax Regime
Law # 8313 of 26 March 1998 on taxation of natural persons applies to Albanian and foreign natural persons, whether they are resident or not. Resident natural persons are subject to tax on all income earned both in Albania and abroad. Non-resident persons are subject to income tax, only on income earned on Albanian soil, unless a bilateral fiscal convention with the foreign national's country provides otherwise.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the conventions signed
Withholding Taxes
Dividends: 15%; interests: 15%; royalties: 15%.

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Sources of Fiscal Information

Tax Authorities
General taxation directorate
Other Domestic Resources
National registration center
Albanian customs
Albanian tax system (World Bank website)
Federation of International Trade Associations

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Learn more about Taxes and Accounting in Albania on Globaltrade.net, the Directory for International Trade Service Providers.

Intellectual Property

National Organizations
The Albanian Copyright Office (ACO).
Regional Organizations
Albania has an agreement with the European Union on patents.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Law N°7819 of 27 April 1994
20 years Patent Cooperation Treaty (PCT)
Trademark
 
Law n°7819
10 years, renewable once. Trademark Law Treaty
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design
 
Law n°7819
5 years, renewable every 5 years for a total duration of 15 years.  
Copyright
 
Law n°7564
70 years after the death of the author. Berne convention For the Protection of Literary and Artistic Works
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
Law n°7819
10 years  

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Legal Framework

Independence of Justice
The constitution provides for an independent judiciary. However, the judiciary, along with law enforcement agencies, remains inefficient and prone to political influence.
Equal Treatment of Nationals and Foreigners
The judiciary cannot guarantee an impartial trial for foreign nationals.
The Language of Justice
The judicial language is Albanian.
Recourse to an Interpreter
An interpreter can be arranged.
Sources of the Law and Legal Similarities
The main source of the law is the constitution adopted by popular referendum in November 1998. Albania's legal system is similar to that of other European countries. The Supreme Court is the highest appeal authority in the country. Albania has not accepted the obligatory jurisdiction of the ICJ.
Checking National Laws Online
Library of Congress
World News Report

Learn more about Lawyers and Legal in Albania on Globaltrade.net, the Directory for International Trade Service Providers.

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Standards

National Standards Organizations
DPS, General Directorate of Standardization
Integration in the International Standards Network
The General Directorate of Standardization (DPS) is a member of:
ISO: the International Organization for Standardization
IEC: the International Electrotechnical Commission

The DPS is affiliated to:
CEN: the European Committee for Standardization
CENELEC: the European Committee for Electrotechnical Standardization
Classification of Standards
The DPS: the General Directorate for Standardization is an institution associated with the Ministry of the Economy, Trade and Energy. Except in the telecommunications sector, the DPS is the official organization for standardization. The standards listed by this institution are: EN, ISO, IEC, ECE, CODEX and JET.
Online Consultation of Standards
Consult the list of the standards.
Certification Organizations
DPS General Directorate for Standardization

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Business Practices

General Information
Best country reports
2009 Guide to doing business in Albania
Opening Hours and Days
Most Albanian stores are open from Monday to Friday, from 8 am to 5 pm and occasionally open on Saturday morning.
Administrations are usually open from Monday to Thursday, from 8 am to 5 pm, and on Friday from 8 am to 2 pm. There is no law defining the opening times of stores, and many will therefore stay open all weekend.
 

Public Holidays

New Year 1 January
New Year 2 January
Nevruz festival (Spring festival) 22 March
Catholic Easter 12 April
Orthodox Easter 19 April
Labor Day 1 May
Lesser Bajram (end of Ramadan) 21 September
Beatification of Mother Teresa 19 October
Greater Bajram 27 November
Independence Day 28 November
National Liberation Day 30 November
Christmas Day 25 December
 
Holiday Compensation
Generally, when a public holiday falls on a week end, either the Friday or the Monday is taken in compensation.
 

Periods When Companies Usually Close

Christmas period Between 24 December and 3 January
 

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Last Updates: January 2015