Albania has Lowest Corporate Income Tax for ICT Companies among WB6

TIRANA, November 13

A comparative matrix of incentives for investments in the countries of the Westerns Balkans (WB6) drafted and published on Tuesday by Albania Investment Council in cooperation with Aida confirms that Albania has the lowest corporate income tax rate for all companies whose activity is software production and development.

More specifically, the corporate income tax exempt for software development companies was adopted in December 2018. According to the decision, all the juridical persons that operate a tech company that falls under one of the eight categories listed below will be subject to a 5 percent income tax from 15 percent. Albanian authorities decided to adopt tax exemption benefits for software development and IT-enabled services to attract investment from foreign investors and companies looking to outsource in new advantageous areas.

In the meantime the corporate income tax rates in the other Balkan countries are:

Bosnia and Herzegovina: 10 percent
Kosovo: 10 percent
Montenegro: 9 percent
North Macedonia: 10 percent
Serbia: 15 percent

Referring to Article No. 100 of the Albanian Constitution and to point No 2 of Article 28 of the Law on Income Tax the Council of Ministers decides that the following activities related to software development/production benefit a five percent income tax rate.

1. Software design. This is the process of envisioning and defining software solutions, analysis, and architectural patterns.
2. Software architecture system design development and maintenance. This consists of system programming, coding, installation, component integration, documentation, finding and fixing software bugs, modification, components maintenance, and system support
3. Software testing. This includes testing of functionality, workload, performance, acceptance, availability, and security of the software system.
4. Communication system design and development. This includes analysis, planning, design, implementation, deployment, and maintenance of computer networking systems (LAN / WAN / WLAN / MAN / SAN / CAN).
5. CISO related responsibilities. This includes analysis of customer security requirements, the design of the architecture, installations and component configurations, security testing and related maintenance.
6. System migration development. This includes transferring relevant data and infrastructure from old technology to new technology.
7. Improvement/upgrade of information systems
8. Operating, managing, support for use, training and technical / IT audit for software systems.

If you have any questions don’t hesitate to fill a request for information via the form at the end of this page

Read more on Tax Incentives in Albania HERE

Source: IC