January 14, 2024
Algeria enacts finance laws with key measures applicable to corporations
The enactment of two new laws will affect companies doing business in Algeria this year and beyond.
The Amending Finance Law for 2023 (AFL 2023) introduces new measures related to transfer pricing with the objective of the enhancing transfer pricing control. Notably, the AFL 2023 provides for increased fines applicable to noncompliance with the transfer pricing documentation obligation.
The Finance Law for 2024 (FL 2024) has introduced a set of measures aimed at reducing the tax burden of taxpayers, including by removing the Tax on Professional Activity, which should help make the Algerian tax system more attractive.
Descriptions of key measures applicable to companies follow.
Enhancement of transfer pricing rules (AFL 2023)
Article 6 of the AFL for 2023 introduces a measure that provides for transfer pricing documentation to be submitted online via the tax authorities' platform "Jibayatic." The measure also requires the tax authorities to make a model available for that effect. The model has not yet been published.
As per the measures introduced by AFL 2023, noncompliance with this obligation can lead to a significantly increased fine of 15 million Algerian Dinar (DA 15m), instead of DA 2m (Art. 8 AFL 2023).
Previously, the fine only applied when the taxpayer had not submitted the transfer pricing documentation by 30 April of the following year and had not responded to the tax authorities' formal notice to submit a transfer pricing documentation within a 30-day period.
Abolishment of the Tax on Professional activity (FL 2024)
The FL 2024 abrogates all of the articles relating to the terms and conditions applicable to taxpayers with a turnover subject to the Tax on Professional activity (TAP). This tax is abolished for all taxpayers. TAP had applied on the turnover of companies liable to Corporate Income Tax and was levied at 1.5%.
Nonetheless, a similar tax called Local Tax on Solidarity is introduced for the transport in pipelines of hydrocarbons and mining activities. (Art. 14 FL 2024)
Regarding tax reporting (FL 2024)
Customers' details statements must be submitted online by the taxpayers registered with the Directorate of Large Companies (DGE — Direction des Grandes Entreprises) (Art 12 FL 2024).
Fines have been increased for late filings, omissions, inaccuracies or any infringement relating to tax return submissions (Art 13 FL 2024).
The amount of the turnover exempted from VAT should be reported on a monthly statement in the same manner as for the taxable turnover (Art 40 FL 2024).
Regarding tax controversy (FL 2024)
The new law abrogates the opportunity for taxpayers to introduce an appeal with the administrative court by considering that a non-answer from the committee of appeal within a four-month timeline amounts to an implied rejection of their appeals (Art 48 FL24).
The minimum percentage payable for the benefit from the payment schedule in a recovery procedure has been reduced from 10% to 5%. (Art 57 FL 2024).
Taxpayers having tax debts dated for more than four fiscal years could benefit from the canceling of the late payment interest in case they pay the principal amount of the tax debt before 31 December 2024 (Art 15 AFL 2023).
Investments encouragement via new tax incentives (FL 2024)
Buildings linked to job-creating investment projects eligible for the employment aid schemes of the relevant national agencies will be exempt from property tax on built property (Art. 16 FL 2024).
Locally manufactured products intended for export are exempt from the Energy Efficiency Tax (EET) (Art. 73 FL 2024).
Customs declarations (FL 2024)
Customs declarations are now essentially made and lodged electronically, with the same legal effects as manual declarations. The declaration must be accompanied by electronic copies of the documents making up the customs clearance file, and the declarant is responsible for keeping the original documents (Art. 80 FL 2024).