Financial Statements And Corporate Sustainability Reporting (CSRD)

Overview

On 7 August 2026, Law No. 87/2026 “On Some Amendments and Additions to Law No. 25/2018 ‘On Accounting and Financial Statements’” (the “New Law”) was published in the Official Gazette, introducing a comprehensive sustainability reporting regime into Albanian accounting legislation. The amendments transpose the framework of the EU Corporate Sustainability Reporting Directive (CSRD)¹, replacing the previous, more limited “Non-Financial Reporting” obligation under Article 18 of the former law with a comprehensive sustainability reporting system.

Scope of the New Reporting Requirements

The New Law introduces more detailed requirements for reporting on the business model and strategy, sustainability-related objectives (including greenhouse gas reduction targets aligned with the Paris Agreement and the 2050 climate neutrality objective), governance and due diligence processes, principal risks, and value-chain information, including its products, services, business relationships and supply chain, as well as measures taken to identify them. All such information must be prepared in accordance with sustainability reporting standards to be adopted by order of the minister responsible for finance.

The Law significantly expands the scope of entities subject to this obligation, establishing reporting requirements both at the individual and consolidated levels, applicable to undertakings and groups exceeding specified operating revenue thresholds².

Applicability Thresholds

Under the New Law, the thresholds for the sustainability reporting obligation are as follows:

1. At the individual level

Undertakings that, as of the reporting date, exceed both of the following thresholds:

• An annual average of 1,000 employees, and
• Operating revenue of ALL 45,000,000,000 (approx. EUR 492 million) during the financial year.

2. At the group/consolidated level

Parent undertakings of a group that, as of the reporting date, exceed both of the following thresholds on a consolidated basis:

• An annual average of 1,000 employees, and
• Net revenue of ALL 45,000,000,000 (approx. EUR 492 million) during the financial year.

Special Thresholds for Subsidiaries and Branches of Foreign Undertakings

Special thresholds apply to domestic subsidiaries of foreign parent undertakings:

• Albanian-controlled undertaking: revenue exceeding ALL 20 billion (approx. EUR 220 million) during the preceding period.
• Branch of a foreign undertaking (not part of a group or without a controlled undertaking in Albania): revenue exceeding ALL 20 billion (approx. EUR 220 million).

These obligations apply only where the parent undertaking in the other jurisdiction (at group or individual level) has revenue exceeding ALL 45 billion in each of the two most recent reporting periods.

Reporting on Income Tax Information

For the report on income tax information, the threshold is higher: consolidated or individual revenue of ALL 75,000,000,000 (approx. EUR 820 million) in each of the two consecutive most recent reporting periods. The Law also establishes detailed rules concerning the content, exemptions, publication and joint and several liability of management bodies.

Timeline and Entry into Force

The obligations relating to sustainability reporting, consolidated sustainability reporting and the report on income tax information will become mandatory only for reporting periods beginning in 2028 and thereafter. Entities currently subject to the former “Non-Financial Report” obligation must continue preparing such reports for the 2027 reporting period under the previous rules, while voluntary sustainability reporting will be permitted from 2028. The requirement to use an electronic reporting format will not apply until the relevant implementing legislation, aligned with EU law, is adopted by the Council of Ministers.

The Law entered into force 15 days after its publication in the Official Gazette.

FAQ

1. Which companies are subject to the new sustainability reporting requirements in Albania?

The rules apply to undertakings exceeding 1,000 employees and ALL 45 billion (approx. EUR 492 million) in revenue at the individual level, or groups exceeding the equivalent consolidated thresholds, with separate thresholds for certain Albanian subsidiaries and branches of foreign undertakings.

2. What information must be included in the sustainability report?

The report must cover, among other things, the company’s business model and strategy, sustainability targets, governance, due diligence, principal risks and value-chain information.

3. When will sustainability reporting become mandatory?

The new sustainability reporting requirements will apply to reporting periods beginning in 2028. Entities currently subject to the former non-financial reporting regime must continue reporting under the previous rules for 2027.

4. Do the new rules also apply to subsidiaries and branches of foreign companies?

Yes. Specific reporting thresholds apply to certain Albanian subsidiaries and branches of foreign undertakings, depending on their revenue and the size of the foreign parent undertaking.

5. What are the revenue thresholds for income tax reporting?

Separate income tax reporting obligations apply to undertakings or groups with consolidated or individual revenue exceeding ALL 75 billion (approx. EUR 820 million) in each of the two most recent consecutive reporting periods.

Footnotes

1. Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No. 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU as regards corporate sustainability reporting (Corporate Sustainability Reporting Directive – CSRD). CELEX No. 32022L2464, Official Journal of the European Union, OJ L 322, 16 December 2022, pp. 15–80.

2. The term “operating revenue” replaces the term “revenue from economic activity (turnover)”.