Albania: Changes to corporate income tax
New income tax law includes changes to the corporate income tax
New income tax law includes changes to the corporate income tax
The new income tax law—Law no. 29/2023 (dated 30 March 2023 and effective 1 January 2024)—includes changes to the corporate income tax, and in particular to how the corporate income tax applies to specific long-term contracts.
Currently, taxpayers with annual turnover in excess of ALL 8 million are subject to corporate income tax, applied at a 0% rate for taxpayers having an annual turnover from ALL 8 million to ALL14 million, and at a 15% rate on taxable profit for taxpayers with an annual turnover exceeding ALL 14 million. Under the new law, any type of legal entity established in Albania is subject to corporate income tax at a 15% rate, without regard to their annual turnover.
In addition, the new law provides that income related to long-term contracts must be recognized based on the part of the contract completed during the fiscal year concerned. The percentage of completion may be determined by referring to the proportion of the costs incurred in that year against the overall expenses estimated for the contract, or otherwise by referring to the national and international accounting standards.
Read a September 2023 report prepared by the KPMG member firm in Albania
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