Under the thin-capitalization rules, interest paid on outstanding loans from related and unrelated parties, is not deductible if the debt-to-equity ratio exceeds 4:1. However, the thin-capitalization rules do not apply to banks, insurance companies, and leasing companies, or in respect of loans with a term of less than one year.
From 1 January 2018, a new 30% of EBITDA interest deduction restriction is introduced in respect of related party loans, with the excess carried forward, unless there is a change of ownership exceeding 50%. As with the thin capitalization rule, the EBITDA-base restriction does not apply to banks, insurance companies, and leasing companies
Additionally, interest paid exceeding the average annual interest rate of loans published by the Bank of Albania is not tax deductible.