Algeria

Corporate - Corporate residence

Last reviewed - 01 June 2020

According to the provisions of Article 137 of the Algerian Tax Code, a company is considered as an Algerian tax resident entity in cases where it is incorporated under the Algerian law and is realising (i) commercial, industrial, or agricultural activities (physical presence obligation) or (ii) taxable profits through dependent agents. However, please note the existence of the PE concept, which can also refer to permanent place of business.

Permanent establishment (PE)

The Algerian legislation introduces the PE concept in Article 137 of the Algerian Tax Code, relating to territoriality rules of IBS. This Article provides that IBS is due in Algeria on:

  • Profits made by companies, which, without owning in Algeria an establishment or designated representatives, directly or indirectly perform an activity in Algeria resulting in a complete cycle of commercial operations.
  • Profits made by companies using the assistance of representatives in Algeria that don’t have a separate professional personality from these companies.

Based on the above, a PE is created under Algerian law if a professional activity is performed in Algeria by a foreign entity and this activity is generating a complete business cycle, or in the case whereby a foreign company is making profits in Algeria through a dependent agent.