Albania extends tax breaks for luxury resorts until 2026

The Albanian Parliament has approved a new legal initiative to extend tax exemptions for 4 and 5 star resorts affiliated with international brands until the end of 2026. Proposed by Socialist Party MP and former Minister of Tourism Blendi Klosi, the measure gives high-end resorts a two-year extension on income tax relief as part of efforts to attract global investors and foster elite tourism in the country.

Why is this important: Tourism has seen unprecedented growth in Albania in recent years, with 12 million visitors in 2024—a staggering figure for a country of just 2.8 million people. While this influx of tourists boosts the economy, the government aims to ensure the sector evolves sustainably. A key priority is positioning Albania as a destination for elite tourism, moving beyond daily visitors and low-cost travelers.

The tax exemption policy, first introduced in 2019, aligns with this vision. By incentivizing investments from international hotel brands, the government seeks to establish high-quality resorts with global standards.

Context: Proposing the extension, MP Blendi Klosi emphasized that the measure supports the development of high-end tourism and brings significant benefits to Albania’s economy. According to Klosi, 11 global hotel brands have already benefited from the policy, and 11 additional international brands are now in the process of investing in the country.

“These are major investments,” Klosi explained. “A brand-connected investor must follow strict global standards, ensuring quality in every detail. We’re talking about hotels with a minimum of 150-200 rooms. This initiative benefits only a specific segment of the sector—those aiming to raise the industry to higher standards.”

Under this policy, luxury resorts with international affiliations are exempt from income tax, property tax, and the infrastructure impact tax. They also enjoy a reduced 6% VAT rate.

Diverging opinions: Despite being approved by the majority in Parliament, the initiative faced criticism from both opposition members and some Socialist Party representatives.

Jorida Tabaku, Deputy Chair of the Parliamentary Economic Commission and a member of the Democratic Party, dismissed the measure as a pre-election favor to oligarchs. “This is a tailored law serving only a few businesses. It’s an electoral ploy benefiting a small elite, while 95% of other tourism structures continue paying all legitimate taxes,” Tabaku argued.

Meanwhile, Socialist MP Erion Braçe expressed concerns about the broader tourism policy. He criticized the growing trend of apartment-style tourism developments, which he claimed prioritize property sales over tourism services.

“I oppose tourism built on villa sales, operating for only 15 days a year. Apartment tourism should be controlled—Spain taxes foreign buyers 100% to protect local homebuyers. Albania needs similar measures,” Braçe stated.

A policy for growth: Introduced in 2019, the tax exemption for 4- and 5-star international resorts aimed to position Albania as a competitive player in the global tourism market. The measure has already attracted 11 major investments since its inception. With the newly extended deadline, Albania hopes to capitalize on its growing reputation as an emerging luxury destination, continuing to draw interest from prestigious hotel brands worldwide.

The extended policy reflects the government’s commitment to fostering sustainable tourism while balancing its impact on the environment and local communities. However, as debates in Parliament reveal, the measure’s implementation and broader strategy remain a contentious topic in Albania’s political landscape.