In the ongoing drive against fraud, tax evasion, and intricate tax planning, tax authorities now harness the expertise of external specialists during tax audit missions, to navigate nuanced challenges in sectors such as hydrocarbon, mining, pharmaceuticals, and financial services.
This progressive step comes with a pivotal requirement: designated experts must uphold professional secrecy, mirroring the confidentiality obligations incumbent upon the tax administration's internal agents, as stipulated in article 65 of the Tax Procedures Code.
Judicial Litigation
Article 47 of FL 2024 eliminates ambiguity in the appeal time-line to the Administrative Court. Amendments to Article 81-2 of the TPC clarify that taxpayers can appeal within four months after the designated commissions conclude their decision-making period
Repressive Litigation
Limitation of public prosecution in case of fraudulent maneuvers
Article 52 of FL 2024 supplements the provisions of article 104 of the TPC by creating a new paragraph 3, specifying that the limitation period for filing a complaint in the frame of public persecution runs from the date on which the tax liability arising from the fraudulent maneuvers is generated.
However, this time limit is suspended for the period between the date of request to the regional tax offences commission of the Wilaya Tax Department that initiated the proceedings, and the date of issuing of its opinion on the proposal to file a complaint.
It should be remembered that as the of Large Taxpayers Directorate (DGE) has national jurisdiction, prosecutions of taxpayers under its jurisdiction are not subject to the assent of the Commission for Fiscal Offences.
Collection
Payment schedule: reduction in the initial instalment
In order to reduce the impact on the cash flow of taxpayers wishing to sign up to a payment schedule, FL2024 provides for a reduction in the minimum initial payment of the tax liability from 10% to 5% when the commitment is signed with the head of tax collection department.
Registration duties
Reorganization of transfer duties applicable to certain lease contracts
Article 28 of FL2024 supplements the provisions of article 222 of the Registration Code "RC", making the following deeds subject to a fixed duty of DZD 4 000:
- Rental of premises for professional or commercial use under an "Ijara Mountahia Bitamlik" or leasing contract.
- Rental of equipment
In addition, the previous wording of article 222 of RC had provided for the payment of a 2% duty on lease contracts.
The purpose of fixing this fee at DZD 4 000 is to encourage operators to use this type of financing.
Financial markets
Exemption for income and capital gains from the financial and bond markets
As part of the development of financial and bond market activities, Article 67 of FL2024 extends the exemptions provided for by Article 44 of FL 2019, in terms of PIT, CIT and registration duties, for a period of five years, until December 31, 2029.
PIT and CIT exemptions apply to the following operations:
- Income from shares and similar securities listed on a stock exchange or bonds and similar securities with a maturity of five (5) years or more listed on a stock exchange or traded on an organized market, as well as income from shares or units in undertakings for collective investment in transferable securities.
- Income and capital gains from the sale of bonds, similar securities and similar treasury bonds listed on a stock exchange or traded on an organized market with a minimum maturity of five (5) years issued within a period of five (5) years.
- Bank term deposits for a period of five (5) years or more.
Furthermore, transactions involving securities listed on a stock exchange or traded on an organized market are exempt from registration duties.
Reduction in CIT rate when share capital is listed on the stock market
To encourage companies listing their capital on the stock exchange, Article 68 of FL2024 provides for the renewal for a period of three years, from January 1, 2024, of the reduction in CIT proportionally to the rate of opening of share capital on the stock exchange.
Islamic finance
Exclusion of certain incomes from CIT taxable base
To encourage the growth of TAKAFUL insurance operations, FL2024 introduced adjustments to the tax legislation, notably by amending article 147 Ter of the DTC, aimed at establishing tax neutrality and equitable tax treatment similar to that applied to conventional insurance operations.
More specifically, the proposal is to exclude from the CIT taxable base, income from the mandatory investment of pooled funds in Sharia-compliant financial instruments under TAKAFUL insurance, when dedicated to charitable acts, under the supervision of the National Sharia Authority for the Islamic Finance Industry.
Exemption for "RETAKAFUL" transactions
Article 34 of FL2024 extends the VAT exemption provided for in article 9-19 of the TTC for reinsurance operations to those relating to "RETAKAFUL" contracts.
Tobacco industry
Complementary Tax on tobacco company’s profits revised upwards
Article 10 of FL2024 law amended article 150 bis of the DTC, relating to the Complementary Tax applied to profits made by tobacco manufacturers.
The changes include an increase in the tax rate applied, through the introduction of the concept of integration rate and the definition of integration.
Indeed, integration is defined as the industrial process of manufacturing a final product by incorporating locally produced raw materials and components.
For this purpose, depending on the integration rate of each company, the Complementary Tax is set at:
- 16%, when the integration rate is equal to or more than 40%.
- 20%, when the integration rate is less than 40%.
However, for newly licensed tobacco manufacturers, the tax rate to be applied is set at 16% for a period of 3 years from the date of starting the business, irrespective of their integration rate.
It is also specified that the methods for calculating the integration rate will be set by a decree from the Ministry of Finance.
Increase in the Additional Tax on Tobacco Products "ATTP"
Article 72 of FL2024 provides for an increase in the rate applied to tobacco products from DZD 37 to DZD 50, which represents a 35% increase in the additional tax on tobacco products per pack or box. This measure is justified by the low tax pressure applied to tobacco products in Algeria compared with other countries.
Solidarity contribution
To encourage tobacco manufacturers to source their products from the domestic market, and thus limit their reliance on imports, article 86 of FL2024 provides for an increase in the rate of the solidarity contribution from 2% to 5%, applicable to raw materials and inputs used in the manufacture of tobacco products.
Transport of tobacco leaves
The amendment to Article 271 of the Indirect Taxes Code (ITC) provided for in Article 42 of FL 2024 entails that companies processing tobacco leaves will now have to obtain an acquired security deposit for the transportation of these products, except for direct movements from the plantation to the dryer and then to the warehouse.
This measure aims to strengthen the traceability of tobacco leaves, giving tax authorities a better overview of these movements for more effective tax control.
Measures related to State’s private domain
Introduction of a rental royalty for land concessions intended for commercial housing promotion projects
As a reminder, AFL for 2023 had introduced a rental royalty payable over a 33-year period for real estate concessions granted as part of investment projects.
Article 82 of the FL2024 also provides for the introduction of a similar scheme applicable to commercial housing promotion projects. The latter involves the payment of an annual rental fee, set by the relevant local real estate authority, corresponding to 1/20 of the market value of the conceded land.
It should be emphasized that the concession in question can be converted into a transfer under the conditions specified in this article as soon as the project has been completed and the certificate of conformity obtained in accordance with the regulations in force, and with the agreement of the granting body.
In addition, the concession guarantees that the promoter will obtain a building permit. It also enables the promoter to take out a hypothec with credit institutions on the real estate rights resulting from the concession.
In addition, article 83 of the FL2024 provides that performing concession deeds for land intended for the construction of these projects gives rise to the payment of a state remuneration according to the following rates:
- 1%, calculated on the cumulative amount of annual rental royalties corresponding to the time allotted to the property promoter to complete the project, when this amount is less than or equal to DZD 500,000.
- 75%, when the amount of these royalties exceeds DZD 500,000.
Lastly, article 78 of the FL2024 also stipulates that performing concession deeds is subject to registration duties and land registration tax at the following rates:
- 2% registration fee calculated on the cumulative amount of annual royalty fees corresponding to the time allotted to the property promoter to complete the project.
- 5% for land registration tax calculated on the same basis as above.
Introduction of electronic payment at the State private domain and land registry offices
As part of the strategy to modernize the administration of the national domain, FL2024 (Article 85) introduced the possibility of paying state, land and cadastral fees and taxes electronically.
Benefit from the payment schedule for state royalties
It should be recalled that the provisions of Article 87 of the FL 2018 had provided for the possibility for domain collectors, to grant a payment schedule for the collection of various domanial debts or any other due amounts for the settlement of the price of transfer of land or real estate.
This schedule is granted for a maximum period of 36 months, after the initial minimum payment of 10% of the amount of the state-owned claim.
The new wording introduced by Article 86 of the FL2024 provides that the initial payment requirement of 10% of the amount of the claim does not apply in case of royalties payable in respect of the use of agricultural land.
Customs measures
Completing customs formalities electronically
As part of the Government's ongoing modernization and development of public administration, article 80 of the FL2024 amending and supplementing article 91 Ter of the Customs Code provides that customs declarations will henceforth be made electronically, except in special circumstances.
The same article states that customs procedures will be carried out based on digital documents, and that the declarant is required to keep the original documents making up the file for the period stipulated by law (i.e., 15 years), and that these must be presented at the request of any customs department.
Finally, it is important to note that electronic declarations have the same legal effects as manual declarations.
Declaration the amounts of money held on entering or leaving the country.
Article 81 of the FL2024 amends the provisions of article 198 bis of the Customs Code, to oblige travelers entering or leaving the country to declare in writing to the customs authorities sums denominated in national or foreign currencies, when they exceed the threshold set by laws and regulations. The model for this declaration will be published by order of the Minister of Finance.
It should be noted that prior to FL2024, the obligation to declare was limited solely to the holding of an amount denominated in foreign currency exceeding the regulated threshold. The finance law therefore extends the scope of this obligation to include amounts denominated in domestic currency.
Authorization for customs clearance of engines for the propulsion of boats less than five years old
With the aim of relaunching fishing and aquaculture activities, through the rehabilitation of the national fleet, article 92 of FL2024 authorizes customs clearance for the release for consumption, in used condition, of engines used to propel boats less than (05) years old, under certain tariff subheadings, for the benefit of owners and/or operators of fishing and aquaculture vessels.
Lower customs duties on inputs used in the manufacture of spectacle frames
Article 93 of FL2024 also provides for a reduction in customs duties on inputs used to manufacture spectacle frames. This provision applies to:
- Cellulose acetate sheets for the design of spectacle frames, classified under tariff subheading 3920.73.30.00, for which the customs duty is reduced from 15% to 5%.
- Parts and accessories for spectacles, under tariff heading 9003.90, for which the customs duty is reduced from 30% to 15%.
This measure is designed to encourage the development of the spectacle frame manufacturing industry.
Import of inputs for aquaculture farming activities
As a reminder, FL2022 provided for imports of inputs required for livestock farming to be subject to the reduced 5% customs duty rate, and the reduced 9% VAT rate.
In this same context, article 90 of the current FL2024 provides that the benefit of this provision will henceforth be conditional on the presentation, at customs clearance, of a certificate issued by the services of the Ministry responsible for fisheries.
Imports of crude soya oil
Article 91 of FL2024 extends the deadline for importing crude soya oil free of customs duties and VAT to December 31, 2024. As a reminder, this deadline was set by Article 18 of the Amending Finance law for 2023 (which supplemented and amended Article 148 of FL2022 on December 31, 2023, i.e., a further year extension.
The new wording of Article 148 of FL2022 requires crude oil importers/processors to begin the production process for this raw material by December 31, 2024, at the latest, or to acquire it on the domestic market. Should they fail to begin the production process, the operators in question will lose the benefit of the compensation and customs and tax exemptions provided for in the article 148 above.
Other measures
Clarification of advertising tax rules
Article 69 of the FL2024 stipulates that the advertising tax introduced by article 63 of the 2010 Complementary Finance law is subject to the same rules governing assessment, control, collection, and litigation as those applicable to direct taxes and similar duties.
Financing structuring investment projects
As part of the drive to improve the attractiveness of the investment climate, articles 94 and 95 of FL2024 provide for the possibility of financing structuring investment projects, as defined by law, with a loan from the Treasury at a supported interest rate.
Exemption from energy efficiency tax
As part of encouraging export activities, Article 73 of FL2024 amending and supplementing Article 70 of the 2016 Finance law as amended and supplemented, exempts from the energy efficiency tax products manufactured in Algeria running on electricity, gas and petroleum products, whose consumption exceeds energy efficiency standards, when these products are intended for export.
Levy on sums collected by foreign companies on imports of goods and services intended for the establishment and operation of fixed, mobile and satellite telecommunications networks
As a reminder, sums received by foreign companies with no permanent business establishment in Algeria were subject to a 2% levy on imports of goods and services intended for the establishment and operation of fixed, mobile and satellite telecommunications networks.
In this context, article 77 of FL2024 provides for the exclusion from the payment of this levy of goods and services linked to interconnection, Voice, SMS and Data (Internet, exchanges of telephone calls/SMS and international leased lines), Roaming, signaling, as well as sums exempted under international treaties ratified by Algeria.
Attribution of the Tax Identification Number "NIF"
The new wording of article 177 of the TPC introduced by article 62 of FL2024, provides that:
- Requests for tax identification are submitted via the tax registration platform, or by means of requests made by the concerned taxpayer to the relevant tax authorities.
- Requests for tax identification must be supported by the National Identification Numbers (NIN) of the individuals concerned, and those of the partners and managers of legal entities.
Obligation to mention NIF on business documents
Article 63 of FL2024 has just created articles 178 bis and 178 Ter within the TPC, specifying that "Natural and legal persons carrying on an industrial, commercial, liberal or artisanal activity must mention the Tax Identification Number on all documents relating to their activities".
Failure to produce the Tax Identification Number (NIF) or the provision of inaccurate information will result in the suspension of:
- Issuing various VAT exemption certificates.
- Issuance of the tax clearance certificate.
- Local solidarity tax reliefs.
- Legal suspension of payment of taxes and duties.
- Subscription of payment schedules.
"FINAIF" national file of fraudulent offenders
Article 76 of FL2022 has been introduced to give authorized institutions and authorities that have registered legal entities or individuals with FINAIF the possibility of granting them exceptional authorization to complete foreign trade formalities for operations undertaken prior to their registration with FINAIF.
