Case Studies
Albania’s “Forgiveness & Settlement” Law: A Deep Dive for Small Businesses
Albania’s new law (Law 86/2025) offers sweeping relief for many overdue tax obligations. If you have unpaid liabilities, reading this article could unlock significant benefits.
By NomadicTax Research Team • 5-8 min read • August 22, 2026
## Overview of Law 86/2025: What It Offers
Passed in late 2025 and implemented in 2026, **Albania’s Law 86/2025** addresses the cancellation (“fshirjen”) and settlement (“shuarjen”) of tax debts owed to central and local tax authorities, including customs duties. ([tatime.gov.al](https://www.tatime.gov.al/d/8/45/0/1952/mbi-zbatimin-e-ligjit-nr-86-2025-per-fshirjen-shuarjen-dhe-pagesen-e-detyrimeve-tatimore?utm_source=openai))
### Who Benefits and How
| Period | What’s Cancelled / Frozen | Conditions to Qualify |
|---|---|---|
| **Until Dec 31, 2014** | Unpaid tax principal is **completely cancelled**, including penalties and interest. Social / health contributions? No. | Just apply between **10 June – 30 November 2026** through the regional tax directorate before paying principal. ([tatime.gov.al](https://www.tatime.gov.al/d/8/45/0/1952/mbi-zbatimin-e-ligjit-nr-86-2025-per-fshirjen-shuarjen-dhe-pagesen-e-detyrimeve-tatimore?utm_source=openai))
| **From Jan 1, 2015 – Dec 31, 2019** | **50% of principal cancelled** if you pay the remaining 50% by **30 June 2026**; or **25%** if paying 75% by **31 December 2026**. Penalties/interest fully wiped. | Must meet payment deadlines. ([tatime.gov.al](https://www.tatime.gov.al/d/8/45/0/1952/mbi-zbatimin-e-ligjit-nr-86-2025-per-fshirjen-shuarjen-dhe-pagesen-e-detyrimeve-tatimore?utm_source=openai))
| **From Jan 1, 2020 – Dec 31, 2024** | Penalties and interest cancelled, **only if** the tax principal is paid in full between **10 June and 31 December 2026**. | Principal-only condition. ([tatime.gov.al](https://www.tatime.gov.al/d/8/45/0/1952/mbi-zbatimin-e-ligjit-nr-86-2025-per-fshirjen-shuarjen-dhe-pagesen-e-detyrimeve-tatimore?utm_source=openai))
Additionally, administrative fines for non-filing or delayed reporting are wiped, subject to timely filing and payment, per Law 86 and subsequent guidance. Subjects disqualified include entities convicted of tax crimes or under ongoing investigation. ([tatime.gov.al](https://www.tatime.gov.al/d/8/45/0/1952/mbi-zbatimin-e-ligjit-nr-86-2025-per-fshirjen-shuarjen-dhe-pagesen-e-detyrimeve-tatimore?utm_source=openai))
## Action Steps for Small Businesses & Individuals
1. **Check eligibility**: Periods up to December 2024 are included, but only social health contributions and the tax principal have specific treatment.
2. **File missing declarations promptly**: Unfiled returns for periods through Dec 2024 must be submitted before **30 June 2026** (some cases) to qualify. ([tatime.gov.al](https://www.tatime.gov.al/d/8/45/0/1968/dorezoni-deklaratat-e-padorezuara-deri-me-30-qershor-qe-te-perfitoni-nga-ligji-i-fshirjes-se-detyrimeve-tatimore-te-papaguara?utm_source=openai))
3. **Verify debt positions**: Log into **e-Filing** to view debts, categorization, and overpayments (credit balances) that may be offset.
4. **Make payments in full where required**: For certain periods, partial forgiveness only applies with payment of remaining principal. Plan cash flow carefully.
5. **Avoid disqualification**: Meet deadlines. Do not have unresolved criminal proceedings in tax/duty fields. Waive rights to appeal if needed.
## Strategic Implications and Case Example
Suppose you run a retail business in Tirana with **unpaid VAT debts from 2016** of **€10,000 principal**, plus €5,000 in penalties & interest. If you pay **50% of the principal (€5,000)** by **30 June 2026**, then under Law 86 you get **50% cancellation of principal = €5,000**, and full cancellation of penalties / interest = **€5,000**. Your total payment = **€5,000**, debt forgiven = **€10,000**, for saving **€5,000**.
## Looking Ahead
- If you’ve organized your finances to take advantage of this scheme, get proof of compliance — filed returns, payment receipts, waiver documents.
- Watch for updates: guidance and lists of subjects who qualify or not are being published & updated via e-Filing automatically.
- Learn from Algeria’s Law 86/2025 = no “new taxes,” just smart relief when compliance is taken seriously.
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This article fits the **Entity Setup / Case Studies** category: legal relief for obligations and how entities can use new laws to reset their liabilities.