Albanian law applies the principle of worldwide taxation. Resident entities are taxed on all sources of income in and outside the territory of Albania, while non-resident entities are taxed on income generated only in the territory of Albania.
The corporate income tax (CIT) rate in Albania is 15%. CIT is assessed on the taxable profits calculated as taxable income less deductible expenses.
Taxpayers with annual turnover up to 14 million Albanian lek (ALL) are exempt from CIT, whereas taxpayers with annual turnover greater than ALL 14 million are subject to a 15% CIT rate.
However, taxpayers whose activity is software production and development are subject to a 5% CIT. Similarly, taxpayers whose activity is based on agricultural co-operation and those whose activity is certified as 'agro tourism', in accordance with the respective laws, are subject to a 5% CIT.
Local income taxes
Local taxes on income depend on a number of factors, such as type of activity, municipality where the business is located, and the annual turnover. Consequently, these taxes may vary from ALL 20,000 to ALL 550,000.