Corporate - Corporate residence

Last reviewed - 31 May 2024

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 CIT. This Article provides that CIT is due in Algeria on a resident or non-resident person if it:

  • Habitually conducts a trade, industry, or agricultural business in the country in the absence of a PE within the meaning of conventional tax provisions.
  • Derives profits through an agent in Algeria.
  • Conducts operations in Algeria representing a complete commercial cycle.
  • Derives profit generated by operations relating to the property they own in Algeria.
  • Derives profits for which the right to tax is attributed to Algeria by virtue of a tax treaty.

When a company carries on its activity both in Algeria and abroad, its profit is, unless the contrary is proven by separate accounts, presumed to be made in Algeria in proportion to the production operations, or failing that, to the sales made in that territory.