Albania Fiscal Amnesty 2026: How Law 86/2025 Cancels Tax Penalties and Interest

In December 2025, the Albanian Parliament passed Law No. 86/2025 (approved 12 December 2025) on the erasure, extinguishment and payment of tax obligations. Rather than a flat percentage cut, it forgives accumulated penalties and interest on a tiered basis according to the period the debt relates to -- and in the oldest bracket it erases the debt entirely with no payment at all.

The three brackets work as follows:

• Tax periods before 31 December 2014 (pre-2015): the entire debt -- principal, penalties and interest -- is erased automatically, with no payment and no application required.
• Tax periods 2015-2019: pay 50% of the principal by 30 June 2026, or 75% of the principal by 31 December 2026; the remaining principal together with all penalties and interest is cancelled.
• Tax periods 2020-2024: pay 100% of the principal by 31 December 2026; all penalties and interest are cancelled. There is no partial-principal option in this bracket.

Where the principal has already been paid and only penalties and interest remain on the account, those penalties and interest are forgiven. Social and health insurance contribution principal is never forgiven -- only the penalties and interest on contributions.

For businesses carrying historical tax debts that have been accruing interest at 0.06% per day (21.9% annually), the accumulated penalties and interest can easily dwarf the original tax principal, so cancelling them makes resolution financially viable for many taxpayers who would otherwise face overwhelming debt.

Except for the automatic pre-2015 erasure, the amnesty is not automatic: you must actively apply, meet the conditions for your bracket, and complete payment within the deadline. This guide explains who qualifies, what the amnesty covers, what it excludes, and the practical steps to apply. The law extends its effects through 31 December 2026, when the window closes; the 30 June 2026 half-principal option for the 2015-2019 bracket has already passed, so the still-open track is the 31 December 2026 one.

If you have any outstanding tax debts, unpaid social insurance, or fiskalizimi penalties, this window represents an exceptional opportunity to resolve your position with the Albanian tax authority (DPT) and the Social Insurance Institute (ISSH) at reduced cost. We are actively assisting clients in identifying qualifying debts and preparing amnesty applications. For context on the broader Albanian tax compliance landscape, see our freelancer tax guide and business startup guide.

The amnesty applies broadly to all taxpayers with obligations to the Albanian tax authority (DPT) or the Customs Directorate (Dogana), including:

• Albanian companies (Sh.p.k., Sh.a., and other legal entities)
• Self-employed individuals (Person Fizik)
• Individuals with personal income tax debts
• Employers with outstanding payroll tax and social insurance obligations
• VAT-registered businesses with unpaid VAT

The amnesty is keyed to the tax period a debt relates to, covering periods through 31 December 2024 across the three brackets above. It does not apply to obligations for the 2025 tax year or later.

Key qualifying conditions:

1. The required share of the principal must be paid in full. The amnesty cancels penalties and interest, but the principal share owed for your bracket (nothing for pre-2015, 50% or 75% for 2015-2019, 100% for 2020-2024) must be paid completely. There is no reduction on the principal beyond the bracket rules -- only accumulated penalties and interest are forgiven.
2. Application must be submitted to DPT before the amnesty expires (the automatic pre-2015 erasure aside). DPT reviews your outstanding debt ledger and issues a settlement notice showing the amount due once penalties and interest are cancelled.
3. Payment must be completed by 31 December 2026. The half-principal option for the 2015-2019 bracket had a 30 June 2026 cut-off that has now passed; the remaining open track -- 75% of principal for 2015-2019, or 100% for 2020-2024 -- runs to 31 December 2026, when the amnesty period ends. If you miss the deadline, the amnesty benefit is forfeited and the full original debt plus accumulated interest stands.
4. Ongoing compliance must be maintained. Taxpayers who apply for the amnesty but subsequently miss current-period filing or payment obligations during the amnesty period may lose their eligibility.

There is no minimum debt size requirement -- even small debts (a few ALL 5,000 late filing penalties) can be resolved through the amnesty. The amnesty is equally available to small sole traders and large corporate groups.

The 2026 amnesty covers a broad range of outstanding tax and contribution obligations:

Covered under the amnesty:

• Corporate income tax (CIT) and personal income tax (PIT) arrears, including unpaid annual income tax, quarterly prepayments, and withholding tax obligations
• VAT arrears, including outstanding VAT from monthly returns and assessments from tax audits
• Social insurance (ISSH) contributions, both employer and employee shares that were not timely remitted
• Health insurance (FSDKSH) contributions
• Fiskalizimi and invoicing penalties -- the ALL 50,000-100,000 fines for failure to issue compliant invoices
• Late filing penalties (ALL 5,000-10,000 per missed return)
• Tax audit assessments from prior audits that remain unpaid, including any penalty components
• Withholding tax obligations (tatimi i mbajtur ne burim) on dividends, interest, royalties, and service fees
• Customs duties, import VAT, and excise tax arrears administered by the Customs Directorate (Dogana) -- these are covered by the amnesty on the same tiered basis (nothing for pre-2015, 50% or 75% of principal for 2015-2019, 100% for 2020-2024) as debts administered by DPT, with the accumulated penalties and interest cancelled

The forgiveness applies specifically to: Accumulated interest (0.06%/day), administrative penalties (the fixed ALL 5,000, ALL 10,000, ALL 50,000, ALL 100,000 amounts), and additional tax (an understatement carries the 0.06%/day fine of Article 115; the flat 100% of Article 116 applies only where evasion is established). The principal tax itself is not forgiven (beyond the partial-principal option in the 2015-2019 bracket) -- for 2020-2024 periods you still pay the full original tax amount, and only the penalties and interest fall away.

Example: A company has ALL 2,000,000 in unpaid VAT from 2023-2024, with ALL 800,000 in accumulated interest and ALL 300,000 in late-filing penalties, for a total outstanding balance of ALL 3,100,000. Because these are 2020-2024 periods, the company pays the full ALL 2,000,000 principal by 31 December 2026 and the entire ALL 1,100,000 in penalties and interest is cancelled. Total payment to settle the debt: ALL 2,000,000 instead of ALL 3,100,000 -- a saving of ALL 1,100,000.

Not all debts and not all situations qualify. Understanding the exclusions is as important as understanding what is covered.

Key exclusions from the 2026 amnesty:

• Tax debts under active criminal prosecution. If your tax matter has been referred to the prosecutor's office for criminal investigation (tax evasion, fraud), the fiscal amnesty does not apply to those debts. The criminal proceedings and the tax liability are handled separately.
• Debts arising from fraudulent tax declarations. Where DPT has made an assessment based on a finding of intentional false declarations or deliberate concealment of income, the amnesty may not apply to the fraud-related portion of the assessment.
• Debts for tax periods under active audit. If a tax audit (inspection) is currently ongoing for a specific tax period, that period's potential debts may not qualify until the audit is concluded. The amnesty applies to finalized debts -- assessed and confirmed amounts -- not to potential debts still being determined.
• Obligations for tax periods after 31 December 2024. The brackets cover periods through end-2024; 2025 and 2026 obligations are outside the amnesty and must be paid in full with any penalties and interest.

If you have debts in both covered and excluded categories, you can apply the amnesty to the covered portion. We conduct a full debt review for each client to identify qualifying amounts and exclude ineligible debts from the amnesty calculation.

The amnesty is not automatic and requires active steps. Here is the practical process:

Step 1: Obtain your debt ledger from DPT. Request a full statement of outstanding obligations from your local Regional Tax Directorate (Drejtoria Rajonale Tatimore) or access your tax account through the e-Albania online tax portal. This ledger shows all outstanding principal, interest, and penalties by tax type and period. It is essential to start here -- many businesses are unaware of the full scope of their outstanding obligations, particularly for older periods.

Step 2: Conduct a debt analysis. With your accountant, review the ledger to identify: which tax periods each debt relates to and therefore which bracket applies, which debts are excluded, the split between principal (payable per bracket) and penalties/interest (cancelled), and the total amount due after the amnesty is applied.

Step 3: Submit the amnesty application to DPT. File the formal application requesting amnesty treatment of your identified debts. DPT will review and issue an official settlement notice showing the reduced amounts due. This step requires your accountant to interact directly with the tax office and resolve any discrepancies between your records and DPT's records -- a common and time-consuming part of the process.

Step 4: Pay the agreed amount by 31 December 2026. Once DPT confirms the settlement amount, arrange payment of the required principal share for your bracket (the penalties and interest are cancelled, not paid). Bank transfers to DPT accounts are the standard payment method. Obtain payment confirmation receipts for your records.

Step 5: Obtain written confirmation of debt clearance. After payment, request a written clearance letter (Vertetim i Shlyerjes se Detyrimeve) from DPT confirming the debt is settled. This document is essential for future tenders, bank loans, and business transactions requiring a clean tax record.

Timeline: The process from application to settlement typically takes 4-8 weeks, depending on the complexity of the debt and DPT's processing load. With the window closing on 31 December 2026, we recommend beginning the process well before the autumn of 2026 so DPT reconciliation and payment can complete in time. Get in touch if you want to evaluate whether the amnesty applies to your debts.

The amnesty is valuable, but it is not right for every situation. Here is how to think through the decision:

Scenarios where the amnesty is clearly beneficial:

• You have accumulated interest that now exceeds the original tax principal. At 0.06%/day (21.9%/year), a debt that is 3+ years old may have doubled in size from interest alone. Cancelling that interest entirely (once you pay the required principal share for the period) is substantial.
• You have multiple late filing penalties (ALL 5,000-10,000 each) from missed returns over several years. These can accumulate quickly -- 24 missed monthly returns equals ALL 120,000-240,000 in penalties alone. The amnesty cancels these once the principal is settled.
• You are applying for a bank loan, government tender, or business contract that requires a clean tax certificate (Vertetim i Shlyerjes se Detyrimeve). Clearing debts through the amnesty is faster than standard settlement negotiations.
• You are planning to sell your business or bring in an investor. Outstanding tax debts are a deal-breaker for most buyers and investors in due diligence.

Scenarios where caution is warranted:

• If the debt is under dispute and you believe DPT's assessment is incorrect, using the amnesty effectively admits the debt. Consider whether the appeal route is worth pursuing first.
• If cash flow is severely constrained, paying the required principal by 31 December 2026 may not be feasible, and a failed amnesty application (where you apply but cannot pay) leaves you worse off than a standard installment agreement.
• If the debt involves criminal prosecution, the amnesty does not help -- you need a lawyer, not just an accountant.

We provide a full amnesty viability assessment for any client with outstanding tax debts: we calculate the exact savings, identify any exclusion risks, and advise on whether the amnesty or an alternative resolution path (installment agreement, dispute, or voluntary disclosure) is more appropriate for your situation.

Disclaimer: The information in this article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Cross-border tax structuring requires professional analysis of your specific circumstances. We recommend consulting with a qualified tax advisor before making decisions based on this content.