The American Chamber of Commerce in Albania (AmCham) in its role as a constructive partner in public dialogue, has consistently reflected sensitivity and a high level of responsibility toward reforms that affect the business climate, economic development, and market integrity. As an organization that represents the interests of both American and Albanian investors, AmCham places essential importance on transparency, fair competition standards, and sustainable medium and long-term policies.
In this context, AmCham expresses its concern regarding the draft law “On the Fiscal Peace Agreement,” which is currently under review in Parliament and is expected to be approved in the session of 11 December 2025. Our professional assessment highlights a number of issues with broad legal, economic, and fiscal governance implications.
1. High risk of undermining fair competition
The draft law creates a scheme in which businesses that have duly reported their profits over the years are placed in a disadvantageous position, while those that have avoided tax obligations stand to benefit.
The mandatory application of an 18% increase in taxable profit from the previous year, regardless of the sector or the taxpayer’s actual performance, replaces the self-declaration process with an arbitrary formula that does not reflect the actual financial performance of the entity and creates an unfair burden on compliant taxpayers.
Meanwhile, businesses with historically low declared profits benefit from a low calculation base, creating inequality and market distortion. This practice harms compliant and serious enterprises and undermines the constitutional principle of equality before the law.
2. Real risk of legalizing capital of dubious origin
The draft law enables the re-declaration of financial statements for the past five years, including the restatement of cash, the elimination of liabilities, or the declaration of previously unregistered assets, without the need to justify them as accounting/tax errors or deliberate non-declarations. In any case, the differences are taxed at a reduced rate of only 5%. These changes to historical financial statements are allowed without the need for supporting documentation or clear justifications, thus endangering the fundamental principles of National and International Accounting Standards that require consistency and reliability of financial information.
This mechanism, which is not accompanied by any requirement to verify the origin of funds, creates a clear pathway for legalizing capital of unclear or potentially criminal origin.
The absence of a robust control mechanism in line with anti–money laundering legislation, combined with the exemption of auditors from responsibility for resulting discrepancies, further increases the risk that the initiative will be perceived as a disguised form of fiscal amnesty.
This development undermines confidence in the fiscal system and jeopardizes the country’s international reputation, particularly in the context of assessments by the European Union and MoneyVal.
Additionally, the draft law may jeopardize the country’s efforts to fulfill the recommendations of the OECD’s BEPS (Base Erosion and Profit Shifting) task force, which aim to combat international tax evasion.
3. Reduction of tax administration quality
The draft law significantly restricts tax inspections on income tax during the agreement period, limiting oversight solely to “desk review.” This weakens the tax administration’s ability to detect evasion and creates an environment conducive to abuse.
The draft law does not offer clear and objective criteria for selecting taxpayers who can benefit from the fiscal peace agreement (such as tax risk assessment, historical declaration performance, etc., to avoid including taxpayers who have repeatedly avoided taxes). Furthermore, the draft law does not contain mandatory deadlines within which the tax administration must review the taxpayer’s request and prepare and send the agreement proposal.
Furthermore, the possibility of renewing the agreement for up to two additional years creates a problematic dependency between businesses and the administration, turning the agreement into a potential tool for pressure or favoritism, with a high risk of administrative corruption.
4. Serious economic and fiscal consequences
A tax rate of only 5% will be applied in cases where the realized profit increases by more than 18%, as well as in cases of re-declaration of other financial items. This creates a considerable gap between the regular tax rates (15% for corporate income and 23% for certain business categories) and the preferential rate of the scheme.
This large difference has no economic justification and creates a strong incentive for all businesses to move towards the “fiscal peace” scheme, substantially reducing potential state budget revenues. At a time when public finances require stability and predictability, this model encourages tax avoidance practices and shrinks the tax base.
Moreover, considering that more than 90% of taxpayers currently benefit from tax exemptions, the taxpayer base is further narrowed.
5. Significant legal concerns and violation of fundamental taxation principles
The draft law undermines several core principles of tax law and constitutional standards, including:
- the principle of equality before the law;
- legal certainty;
- proportionality of tax obligations;
- the obligation of the administration to treat all taxpayers equally.
The draft law is not accompanied by the necessary secondary legislation that would enable its implementation. Moreover, it foresees that such implementing acts will be approved only three months after the law enters into force.
The draft law sends a wrong message to the business community, creating the perception that voluntary compliance with tax laws is not rewarded, while tax evasions may benefit from temporary amnesty mechanisms. International studies have clearly shown that such schemes seriously damage the culture of tax compliance in the long run and create a negative cycle of poor tax behavior.
6. Concerns about the lack of public consultation and insufficient time for feedback
AmCham is also concerned about the limited transparency and insufficient public consultation surrounding this draft law (as well as the other laws of the 2026 fiscal package). The timeframe provided for stakeholders to review and comment on a measure of such significant fiscal, economic, and legal impact has been unreasonably short and inconsistent with good legislative practice.
The accelerated process not only restricts the ability of businesses and experts to provide substantive feedback but also undermines trust in the policymaking process and raises questions about the robustness and legitimacy of the proposed reform.
RECOMMENDATIONS
In the spirit of constructive dialogue and support for sustainable reforms, AmCham calls for a full review of the draft law. Albania needs fiscal policies that:
- encourage formalization and honest tax compliance;
- ensure fair competition;
- strengthen the integrity of the tax administration;
- preserve business trust and the country’s international reputation.
Fiscal reforms must be based on clear principles of transparency, equality, and the rule of law—standards that this draft law, in its current form, does not fully meet.