Entrepreneurs > Acting as a Business > Simplified Profit Tax for small businesses

The simplified profit tax for small businesses

Every taxpayer, who conducts a business that, during the fiscal year, generates a turnover of less than or equal to 8.000.000 (eight million) ALL, is liable to simplified income tax payment for the small businesses.

Taxable income
The total of incomes generated by the small businesses implies every kind of income produced during the taxable period and includes, not only but also:

  • Income produced by the supply of goods or services;
  • Income gained from the participations;
  • Income on interests;
  • Income from the utilization of movable and immovable assets;

Taxable income or taxable profit is obtained from the difference between:

  • The total income generated during the taxable period and
  • Recognized expenses


  • The recognized expenses are expenses made for the purposes of profit, insurance and storage of profit to the extent that these expenses must necessarily be proven and documented by the taxpayer, as well as when they are subject to restrictions stated in this law.
  • Unrecognized expenses are those determined in article 13, by the Law no.9632, dated 30.10.2006 “On the system of local tax”, as amended.

Tax Rate
For taxpayers subject to the simple income tax for small businesses, with a turnover from 5 (five) to 8 (eight) million ALL, the tax rate on taxable profit shall be of 5%.

For taxpayers with a turnover from 0 (zero) to 5 (five) million ALL, the simple income tax per year is 0 (zero).

The keeping of documentation
They are obliged for every sale made to:

  • Issue a simple tax invoice for every taxable buyer who receives the supply;
  • Issue a tax voucher from the fiscal cash register for every buyer, individual final consumer.
  • Other documents that have been approved by other law and bylaws (ex. Passenger transportation tickets, tax receipt).

They are obliged that for every purchase to justify:

  • The VAT tax invoice, when the purchase is carried out by persons registered as VAT payers.
  • The simplified tax bill, when the purchase is carried out by persons registered as taxpayers of the simplified income tax and are not VAT taxpayers.

The taxpayers are obliged to keep:

  • The book of sales, where is registered in a chronological order the record of every sale with simplified tax bill and the daily total amount of the sales carried out with a tax bill;
  • The book of purchases, where is registered in a chronological order the record of every purchase made with the tax bill, including VAT, with the simplified tax bill;
  • The Book of expenditures and revenues;
  • The book of business assets.

For taxpayers subject to the simplified tax on profit for small businesses that are registered with VAT, the book of sales and the book of purchases held for the purpose of VAT, shall serve as such for the effects of the simplified tax on profit for the small business

The down payment of tax
The installments of the down payment of the simplified tax on profit, for the following year, for the taxpayer with an annual turnover from 5 (five) to 8(eight) million ALL, are calculated based on the data provided in the tax declaration of the previous year.

For taxpayers that are registered for the first time during the year, the simplified income tax is calculated on the basis of turnover and taxable profit, provided by the taxpayer, for the period from the date of registration until the end of the first calendar year.

Form and content of the annual tax declaration are determined by the Guidance of the Minister of Finance.

During the current taxable period, the taxpayer pays, at the second level banks and the Albanian Post, in the account of the tax administration, every year, on the terms:

  • By April 20th the installment payment I;
  • By July 20th, the installment payments II;
  • By October 20th, the installment payments III;
  • By December 20th, the installment payments IV.

With the payment and receiving of the bank confirmation of the payment, the taxpayer shall go to the regional offices for the service of taxpayers and, upon submission of the bank’s receipt, is provided with "the Tax stamp" for the installment, which is placed on top of the certificate of registration (NUIS/NIPT).

Attention ! In case the business activity is opened, closed or suspended during the fiscal year, the simplified income tax for the small business, is proportional to the time of the activity and is calculated on the basis of the self-declaration of the taxpayer.


  • Each taxpayer, subject to the simplified tax on the profits of the small business, with a turnover of five (5) to eight (8) million, has the obligation that, by February 10th of the year following the tax period to submit an annual tax declaration, indicating in details the total income, deductible expenses, taxable profit, the tax payable, and any other particulars provided in the Guidance of the Minister of Finance for the completion and submission of the annual tax declaration.
  • In addition, all taxpayers of the simplified income tax with a turnover of 0 (zero) to 5 (five) million have the obligation to submit the annual declaration within the above terms. These taxpayers fill in this declaration in the manner specified in the Guidance of the Minister of Finance.

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