15% tax restored for businesses in the IT sector - Until the end of December, they will be treated with a preferential 5% tax
The software production and development industry in Albania will enter a new tax regime from January 1, 2026.
Specifically, companies that carry out economic activity in Albania, in the field of software development and that were registered before May 17, 2023, will continue to benefit from the reduced 5 percent corporate tax rate until December 31, 2025.
After this deadline, all businesses in this field will automatically switch to the standard 15 percent profit tax rate. This change particularly affects information technology companies that have been part of a preferential fiscal scheme for years, which aimed to encourage investment in the IT sector and increase Albania's competitiveness in regional and global technology markets.
According to government estimates, the tax increase for this category of businesses is expected to bring additional revenue to the state budget during 2026 and 2027, which is estimated at around 0.036 percent of Gross Domestic Product each year. Although the figure seems modest at a macroeconomic level, the effect on the sector remains significant, considering that a significant part of the Albanian IT industry consists of small and medium-sized companies.
This change is expected to have an impact on the technology industry, which has so far benefited from fiscal support to stimulate growth, innovation and the creation of high-value jobs. In recent years, the IT sector has shown rapid growth, has become an important link for services exports and has attracted investment from foreign companies operating through outsourcing models and software development services for international markets.
According to market data and economic reports, there are approximately 2,500 to 3,200 entities operating in the country that provide IT services, with over 1,000 companies focusing directly on software production and development, cloud services, and technology consulting.
In terms of workforce, the sector accounts for more than 20 thousand employees, while around 7,000 - 8,500 of them are engaged in technical profiles such as programmers, software engineers, cybersecurity specialists, DevOps and data analysts. Furthermore, it is estimated that over 5,000 Albanian freelancers provide technological services to the international market through online platforms, contributing to the growth of services exports.
The contribution of the IT sector to the Albanian economy is estimated at around 2 percent of GDP and Tirana remains the epicenter of activity, concentrating around 80 percent of businesses and the workforce in this sector.
The sector includes a wide range of technological activities, the main ones being: Web and mobile application development; Software outsourcing services for the European market; Process management systems; IT consulting and systems implementation; IT infrastructure and technical support services; Innovative startups and SaaS platforms, etc.
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