TIRANA, Dec. 20 – The Albanian government has specified eight categories that will benefit a reduced 5 percent corporate income tax on software manufacturing and development starting next January, compared to a current standard 15 percent.
The decision made this month follows a mid-year fiscal package that offered several tax incentives, including lower taxes to promote investment and employment in the key IT sector.
The government says the reduced tax will apply to software design, software development and maintenance, testing, design and development of communication systems and security systems, development of system migration, upgrade of IT systems as well as operation, management, IT technical support and audit of software systems.
The tax administration says that legal entities operating in the IT sector must make necessary specifications with regional tax directorates to benefit from tax cuts and that a 15 percent corporate tax will be applied on extra operations not included on the reduced tax list that may require businesses to open new tax ID numbers.
Software development and maintenance employs hundreds of Albanian young men and women in a sector that has become one of the top favorites for Albanian students considering rising demand for IT experts both locally and internationally.
New projects focused on digital literacy are also under way. Tirana’s iconic pyramid building, one of the communism era’s landmarks in the capital city, is soon set to become a youth multifunctional center focused on digital literacy.
The joint Tirana municipality and Albanian American Development Foundation project targets enhancing teens’ digital skills and preparing them for next generation jobs by offering training courses such as designing and programming.
