Albania's 2027 fiscal package: what changes for salaries, dividends, VAT and cars, and what did the government drop on 28 October?

The 2027 fiscal package is five draft laws that the Council of Ministers deposited in Parliament on 28 October 2026, together with the budget. None of them is law yet. As deposited, they cut the tax on gross salaries above 200,000 and up to about 842,857 lek a month, add a 30% rate above 700,000 lek, raise the tax on dividends from 8% to 15% and the standard VAT rate from 20% to 21%, while cutting VAT on basic foods to 6%. The fuel tax is abolished and the annual car tax rises. The VAT threshold drops to 5 million lek through a separate government decision.

We read the draft laws in the text deposited in Parliament, together with their explanatory reports and the explanatory report on the 2027 budget. The latest changes are from 28 October: the government dropped the increase in corporate income tax to 17% and lowered the new top salary rate from 32% to 30%, both of which were in the drafts that had appeared in the media the day before. In our view, the surest piece of work before 1 January is the January 2027 payroll list (the monthly payroll declaration); the change that affects the most small businesses is the VAT threshold, which does not need a vote in Parliament.

The 2027 fiscal package: five draft laws and one government decision

The package amends five laws. The VAT threshold is changed by a Council of Ministers decision (VKM), so it does not go through Parliament.

The latest changes: what the government dropped on 28 October

On 27 October the media published the drafts and the first explanatory reports. The text deposited in Parliament on 28 October differs from them on these points:

There is still some uncertainty about agritourism. The first drafts included it in the 10% rate, while the deposited draft law amends only points 3 and 4 of Article 49 of the VAT law: accommodation in accommodation establishments and five-star hotels with special status. Agritourism is not mentioned in the deposited text, so it appears to stay at today’s rate; this needs to be confirmed with the final text.

Salary tax 2027: 13%, 23% and 30%

Article 3 of the draft law replaces the scale in Article 24 of law 29/2023 with three rates on annual taxable income:

• 13% up to 3,240,000 lek;
• 23% from 3,240,001 to 8,040,000 lek;
• 30% above 8,040,000 lek.

Today the 13% bracket ends at 2,040,000 lek. The deduction of 30,000 lek a month does not change, so in monthly gross salary the new thresholds are 300,000 and 700,000 lek. According to the budget explanatory report, 25,704 employees pay less and 1,293 move into the 30% bracket.

The table below gives the personal income tax (TAP) on a monthly salary. We did the calculation ourselves, with the brackets in the draft law and today’s rules for the deduction; contributions do not change.

The maximum saving is 10,000 lek a month, or 120,000 lek a year. Above 700,000 lek, every extra lek is taxed 7 percentage points more than today, so the saving disappears at about 842,857 lek gross.

The draft law also adds a new exemption (Article 11, letter “gj”): the personal income of individuals and of self-employed people working alone who have the status of a blind person, a paraplegic or tetraplegic invalid, a deaf-mute person or a work invalid is not taxed.

Compare your salary under the law in force and under the draft law in the salary calculator: “Compare 2026 with 2027” gives you the TAP, the net salary and the difference per month and per year, with a PNG image to share, while “2027 draft law” also calculates from net to gross. For the full cost of an employee, with contributions that do not change, see how much an employee costs in 2026.

Dividends at 15%, corporate income tax stays at 15%

The tax on dividends rises from 8% to 15% (Article 41 of the law, as amended by Article 5 of the draft law), and the withholding tax rate in Article 59 becomes 15%. For every 1,000,000 lek of dividends, the tax rises from 80,000 to 150,000 lek. For a profit that is distributed in full, the overall tax goes from about 21.8% to 27.75% (15% on the profit and 15% on the 85% that remains; the calculation is ours).

The new rule in Article 3, point 19, letter “e”, closes the loan route. Advances, loans or other financing that the company gives to its partners or shareholders are treated as dividends when they are not genuine financial transactions but in substance an indirect distribution of profit. Before closing the year, check the balances of the accounts with shareholders.

Corporate income tax stays at 15%, because the draft law does not touch the rate. The 0% rate for businesses with annual turnover up to 14 million lek is law in force and stays until 31 December 2029; the package does not change it. The form and the deadlines of the annual return are in the corporate income tax return.

The filing of financial statements also changes. Anyone required to file them with the National Business Centre (QKB) files them only there, and the QKB forwards them electronically to the tax administration. The statements for tax year 2026 are still filed in both places (Article 61, point 5, as amended by Article 7). The deadlines are in financial statements 2026 (in Albanian).

VAT 2027: 21%, 6% for basic foods and 10% for accommodation

The VAT draft law changes three rates:

• 21% instead of 20%, as the standard rate (Article 48).
• 6% for basic foods (new point 11 of Article 49): bread and flour, milk and natural yoghurt, eggs, rice, pasta, cooking oil, chicken, beef and pork, basic fish, fresh fruit and vegetables, pulses, sugar and basic baby food. The rate also applies to imports. The detailed list, with the goods codes, is to be issued by Council of Ministers decision by 15 January 2027.
• 10% instead of 6% for accommodation in accommodation establishments and for five-star hotels and resorts with special status (points 3 and 4 of Article 49).

The VAT explanatory report estimates the net effect of the rates at about -1.6 billion lek: 21% brings in 10.6 billion, 6% for food costs 12.8 billion and 10% for accommodation brings in 593 million.

For small businesses the main change is the threshold. The draft decision amends VKM no. 953/2014 and lowers the VAT registration threshold from 10 to 5 million lek of turnover in a calendar year, with effect from 1 January 2027. According to the Ministry of Finance’s explanatory report, about 17,516 businesses with turnover between 5 and 10 million lek enter VAT, with 4.5 billion lek in additional revenue. As of 29 October the decision had not been approved, and the registration deadline for the first year had not been published either.

The list of foods at 6% comes out after 1 January, when the rate is supposed to have started. Until then, items in your software cannot be linked to the new rate with certainty. How an invoice with VAT works in the fiscalization system is explained in the fiscalization guide.

Fuel without the circulation tax, cars with a higher annual tax

The draft law on national taxes abolishes the circulation tax of 27 lek per litre of petrol and diesel (32.4 lek with today’s VAT). The fuel excise and the carbon tax do not change. The burden moves to the annual tax on vehicles in use, which is calculated as engine capacity in cm3 x age coefficient x fixed tax by fuel type:

With the coefficients in the new annex, a 2,000 cm3 diesel car that is 10 years old pays 2,000 x 0.24 x 25 = 12,000 lek a year, compared with 6,000 today. Cars up to 3 years old, which according to the news outlet Monitor are exempt today, start paying: a new 2,000 cm3 diesel car pays 7,500 lek in its first year. The tax is paid before the annual roadworthiness test. For businesses with a fleet, the extra cost of the tax is partly offset by cheaper fuel.

Tobacco excise and tax procedures

The excise on cigarettes rises from 7,750 to 8,100 lek per 1,000 sticks in 2027 and keeps rising every year; from 2030 a component based on the retail price is added. Biodiesel moves from excise per kilogram to excise per litre.

The tax procedures draft law changes four things:

• Cash payments. The fine of 10% of the value of each transaction now also applies to cash sales or purchases with consumers above the limit, not only between taxpayers. According to the explanatory report, the cash limit in business-to-consumer transactions is 500,000 lek.
• Prepayments. Unpaid income tax prepayments are added to the liabilities that are collected by enforcement (Article 88).
• Transfer pricing. Transfer pricing documentation that is not submitted on time is fined 100,000 lek.
• Deregistration. The inspection for deregistration takes place without the notice period in Article 81.

This law enters into force 15 days after publication, without waiting for 1 January. If it is published in December, the fine for cash payments above 500,000 lek with consumers could apply from the end of the year.

What does not change

The package does not change:

• the social and health insurance contribution rates, so the contributions calculator remains valid;
• the minimum wage, which has been 50,000 lek since 1 January 2026;
• corporate income tax and the 0% rate up to 14 million lek;
• the deadlines for monthly and annual returns, including the annual personal income declaration (DIVA) for 2026 income;
• local taxes and the fiscalization law.

When it could enter into force

The four laws enter into force 15 days after publication in the Official Gazette and apply from 1 January 2027. On our reading, if they are published after mid-December, they enter into force after 1 January but apply from 1 January. The procedures law has no 1 January date and applies 15 days after publication. The list of foods at 6% has a deadline of 15 January 2027. The other year-end deadlines are in the tax calendar.

What to prepare before 1 January 2027

Everything below depends on approval, and the figures may change in committee. In our view, these are the steps worth starting now:

1. The January payroll list. Prepare the new 13%, 23% and 30% brackets with the thresholds of 300,000 and 700,000 lek gross a month. Identify the employees with disability status who are exempt from TAP.
2. Dividends and shareholder accounts. Do not decide on a profit distribution in December at the 8% rate without knowing whether the decision date or the payment date applies. Check loans and advances to shareholders.
3. VAT rates in invoicing. Prepare 21%, 10% and 6%. Link items to 6% only once the list comes out. Check contracts with fixed prices for 2027, especially in tourism.
4. The VAT threshold. Calculate the 2026 turnover of clients between 5 and 10 million lek and prepare them for registration, invoices with VAT and the monthly return.
5. Cash payments. Move sales to consumers above 500,000 lek to the bank.
6. Prepayments and transfer pricing. Pay the instalments on time and have the transfer pricing documentation ready.
7. The fleet. Budget for an annual car tax that roughly doubles.

For the year-end close, the full checklist is in year-end closing for accounting firms (in Albanian).

Recommended solution: the 2027 changes in devBooks

In the devBooks human resources module, the payroll list calculates the TAP and the contributions for each employee. You can already check the January 2027 payroll list with the “2027 draft law” option in the salary calculator; when the law is published, we will update it with the final text. In accounting and finance, the VAT accounts are split into deductible, payable, receivable and to be adjusted, and the sales and purchase ledgers are filled in from the invoices you record. devBooks does not make tax decisions for you: you or your accountant decide which rate applies to an item or a dividend.

Sources

• Parliament: draft law on some additions and amendments to law no. 29/2023 “Për tatimin mbi të ardhurat” (On income tax) (PDF)
• Parliament: draft law on some amendments and additions to law no. 92/2014 “Për tatimin mbi vlerën e shtuar” (On value added tax) (PDF)
• Parliament: explanatory report on the VAT draft law (PDF)
• Parliament: draft law on some additions and amendments to law no. 9920/2008 “Për procedurat tatimore” (On tax procedures) (PDF)
• Parliament: explanatory report on the tax procedures draft law (PDF)
• Parliament: draft law on some amendments to law no. 9975/2008 “Për taksat kombëtare” (On national taxes) (PDF)
• Parliament: draft law on law no. 61/2012 “Për akcizat” (On excise duties) (PDF)
• Parliament: explanatory report on the draft law “Për buxhetin e vitit 2027” (On the 2027 budget) (PDF)
• Ministry of Finance: explanatory report on the draft decision on the VAT threshold, published by Shqiptarja (PDF)
• Parliament: library of acts
• Ekofin: corporate income tax stays at 15%, salaries over 700,000 lek at 30%, 28.10.2026
• Monitor: the annual car tax under the deposited draft law, 29.10.2026
• devBooks tax calendar

If you want the January payroll list and the invoices with the new rates to come out reconciled in your books, see devBooks pricing or write to us for a demo with your own data.