Depreciation and amortisation
The depreciation rates are determined according to tax administration instructions and common usage, for example:
- The depreciation rate for office items is 10% or 20%.
- The depreciation rate for industrial buildings is 5%.
- The depreciation rate for cars is 20% or 25%. The depreciation base for cars is limited to DZD 1 million.
Accelerated depreciation rates, when justified, can be used, depending on the activity sector and the economic use of the assets.
Under the SCF, goodwill is registered in the local books as a non-current/intangible asset of the balance sheet and cannot be amortised. Consequently, the accounting of goodwill has no fiscal impact for companies.
Start-up expenses are deductible when paid and cannot be capitalised and depreciated.
Interest expenses are deductible when paid.
A bad debt provision becomes deductible when legal action has been taken to recover the debt or when evidence is provided that the receivable has become irrecoverable.
Charitable contributions are deductible, up to a limit of DZD 1 million.
Pension expenses are deductible when paid.
Payments to directors
Payments to directors are deductible.
Research and development (R&D) expenses
R&D expenses are fully deductible when paid by the entity bearing the expenses and when justified. Revenues derived from R&D activities are exempted from IBS, up to a limit of 10% of the taxable benefit or DZD 100 million. The exempted amount has to be reinvested in R&D activities.
Bribes, kickbacks, and illegal payments
Bribes, kickbacks, and illegal payments are non-deductible from the IBS basis.
Fines and penalties
Fines and penalties are non-deductible from the IBS basis.
Taxes duly paid are deductible, except for the IBS itself, which is not deductible. Also non-deductible for IBS purposes are the tax on apprenticeship and training and tax on passenger cars.
Net operating losses
Carryforward losses are permitted until the fourth fiscal year following the year of loss. Carryback losses are not permitted.
Payments to foreign affiliates
Payments to foreign affiliates are deductible.