This information was prepared with the assistance of Albanian Investment Development Agency (AIDA) and IOM Albania through Connect Albania mechanism.
The tourism industry has increased its contribution to the country’s economy in both monetary and employment terms, thus becoming the main sector and a strategic sector for Albania. There is an increase interest on tourism from the government, donors, investors, and other stakeholders in the sector.
Tourism is expressly mentioned as a strategic sector in the relevant existing Strategic Sectors Law. As such, those investments/investors who are granted with the status of the strategic Investment/Investor, have the right to benefit from the special assistance provided by AIDA in the relevant procedures.
The core legislation regulating the activity in the tourism sector are the followings:
Law no.55/2015 “On Strategic Investments in the Republic of Albania”
Law no.93/2015 “On Tourism”, as amended
Decision of Council of Ministers no.413 dated 19.06.2019 “National Tourism Strategy 2019-2023”
Decision of Council of Ministers no.770, dated 20.10.2016 “On the approval of the Regulation on conditions, criteria, tariffs, terms and procedure for classification of accommodation structures”
DCM no.257, dated 9.5.2018 “On the approval of criteria, procedures and documents required for entities applying for investor for accommodation structures with ‘4 stars’ and ‘5 stars’”
Fiscal legislation: Income Tax Law, VAT Law, Local Taxes Law, National Taxes Law.
Law no.9374/2005 “On State Aid”, as amended.
Tax Incentives and State Aid
A. Companies that operate in the ‘4 stars’ and ‘5 stars’ brand name hotels, are exempted from corporate income tax for the first 10 (ten) years of their activity provided that they have gained special investor status by December 2024.
The VAT for tourism related services is 6%. The reduced VAT rate, which applies to the supply of accommodation service in accommodation structures, according to the categories defined in the legislation in tourism sector, is 6%. The reduced VAT rate of 6% applies to any supply of service provided within the accommodation structures “Hotel / Resort with five stars, special status”, as defined in the legislation in the tourism sector and which are holders of a trademark of internationally registered and recognized “brand name”. For the facilities that conduct accommodation activities certified as “agritourism”, pursuant to the applicable legislation, in the tourism sector, the reduced tax VAT rate of 6% shall apply for the provision of the accommodation and restaurant service, apart from drinks.
In case of newly constructed “five stars hotels, with special status”, the developer/holder of the international hotel brand is exempted from the infrastructure impact tax.
Law on Local Taxes provides for the tax applicable each night per bed:105-350ALL per night per bed for the ‘4stars’ and ’5 starts’ hotels. The other accommodating facilities should charge within the range of 35-140 ALL/per night per bed. Municipality taxes differ depending on the municipality where the business is having the legal seat. For example, hotels located in Tirana Municipality ought to charge the tax 350 ALL/per night per bed for the four and five starts hotels. The other accommodating facilities located in Tirana should charge 140 ALL/per night per bed.
- Law no.9374/2005 “On State Aid”, as amended, implies that state aid is provided to all sectors of economy, except for agriculture and fisheries, thus, State Aid is provided also in tourism sector. To date, State Aid Commission has approved State Aid through Financial Support of the Projects in tourism sector.
Further, pursuant to the provisions of the Decision of Council of Ministers no.281, dated 13.04.2016 “On determining the criteria and deadlines for requests for financial support of projects in the field of tourism”, the interested investors must submit their business proposal to the evaluating committee for tourism investments in the Ministry of Tourism and Environment.