Albania’s VAT Registration Threshold Drops to ALL 5 Million in 2027

From 1 January 2027, Albania’s VAT registration threshold falls from ALL 10 million to ALL 5 million of annual turnover. Thousands of small businesses that have so far been outside VAT will need to register. This guide explains who is affected, how turnover is measured and what changes day to day.

What was decided?

With Council of Ministers Decision (VKM) No. 822 of 28 October 2026, the government amended Article 11 of VKM No. 953/2014 implementing the VAT law. The registration threshold is now turnover of ALL 5,000,000 in a calendar year, effective from 1 January 2027. Since 2020 the threshold had been ALL 10,000,000.

For notaries and bailiffs, the threshold stays at zero: they register for VAT regardless of turnover.

When do you have to register?

Article 122 of VAT Law No. 92/2014 sets the rules:

• If your turnover over 12 consecutive months exceeds the threshold, you must apply to register within 15 days of the date it was exceeded.
• If you exceed it in less than 12 months, apply immediately, within 15 days.
• The date of exceeding is the last day of the month in which turnover went over the threshold.

Example: a business with sales of about ALL 450,000 a month reaches ALL 5.4 million over 12 months, so it is above the new threshold. Rather than waiting until March or April, talk to your accountant now about how and when to register under the new rules.

What changes once you’re VAT-registered?

• You charge VAT on sales. The standard rate today is 20% (Article 48 of the law). The 2027 fiscal package proposes 21%, but this has not been adopted yet.
• You deduct VAT on purchases of goods and services used for the business, when you hold a proper invoice.
• You file a VAT return every month and keep sales and purchase ledgers.
• You update your invoicing: invoices must show VAT separately.

For the basics, read VAT in Albania: the basics every business owner should know.

Decisions to make before January

1. Prices: will you keep them and absorb the VAT, or raise them? Customers who are VAT-registered themselves usually don’t mind an increase, because they can deduct it.
2. Contracts: check whether contract prices are stated “including VAT” or “excluding VAT”.
3. Cash: the VAT you collect isn’t yours. Set it aside for the monthly payment.
4. Bookkeeping: VAT registration requires monthly discipline with invoices and documents.

What if turnover falls back below the threshold?

Under Article 122, a registered business can apply to return to the small-business regime when turnover over the last 12 months drops below the threshold. Deregistration takes effect 12 months after the application.

FAQ

Does income tax change for businesses with ALL 5–10 million?
No. Under current law, businesses with gross income up to ALL 14 million pay 0% income tax until 31 December 2029. VAT is a separate tax.

What happens if I don’t register on time?
You risk owing VAT on sales made after the date you should have registered, plus penalties and late-payment interest. Registering on time is much cheaper.

We’ll help you move to VAT

Abacus helps you measure turnover, register on time and organise invoicing and monthly returns. Contact us or explore our tax services.

This article is for general information and is not a substitute for professional advice. Sources: VKM No. 822 of 28.10.2026; VKM No. 953 of 29.12.2014 (Article 11); VAT Law No. 92/2014 (Articles 48, 117, 122); Income Tax Law No. 29/2023 (Article 69).