Corporate - Significant developments

Last reviewed - 01 January 2024

New tax measures introduced by Finance Law (FL 2024)

Abolishment of the Tax on Professional Activity

In order to reduce the tax burden for economic operators, the Tax on Professional Activity (TPA) has been definitively removed from the Algerian tax system.

    Introduction of Local Solidarity Tax

    Creation of a new tax to replace TPA. The new tax is deemed on monthly turnover for specific activities, notably: 

    • pipeline transport of hydrocarbons (set at the rate of 3%)
    • mining activities (set at the rate of 1,5%)

    The taxation rules are set forth by articles 231 bis to 231 decies, and are similar to those of TPA.

    Exemption from CIT and Flat rate tax for activities involving the collection and sale of raw milk

    FL2024 removed the condition that the product must be intended for consumption in its current state in order to be qualified for the exemption from PIT and CIT.

    Extension of exemption to taxpayers under Single Flat Tax regime (IFU) on the turnover issued from the collection and sales of raw milk.

    Tax measures to improve purchasing power

    VAT exemptions until 31 December 2024, to the following operations:

    • The import and sale of certain widely consumed products intended for human consumption, including peas, chickpeas, beans, lentil, broad beans, rice, and others. The detailed list of products covered by this temporary exemption is set forth in article 65 of FL2024.
    • Sales of locally produced fruit, fresh vegetables, eggs, broiler chicken and turkey.

    Clarification of VAT exemption for wheat-based products, notably on operations involving: 

    • Cereals used to manufacture the flours listed below and semolina.
    • Standard and superior flour.

    New Technologies- Extension of VAT exemption period

    Extension of VAT exemption until 31 December 2026, for Internet-related services and fees, notably: 

    • Fees and royalties relating to fixed Internet access services, as well as expenses relating to the leasing of bandwidth intended exclusively for the provision of fixed Internet service.
    • Fees associated with hosting web servers in data centers located in Algeria and in .DZ (dot dz).
    • Website design and development fees.
    • Fees related to maintenance and support relating to website access and hosting activities in Algeria.

    This measure aims at reducing communication costs and promoting ICT development.

    Environment- taxation of recoverable waste at reduced VAT rate

    Encouragement of waste recovery for recycling, by extending the application of the reduced rate of VAT, set at 9% on the sale of the recoverable waste to the following materials : wastepaper, rubber, end-of-life tires, used motor, gearbox and lubrication oils, edible oils and fats and lead-acid batteries, when the latter are intended for recovery

    Taxpayers Reporting Obligations

    Introduction of a penalty for failure to file the annual return of salaries and other paid emoluments (Gn°29)

    Failure to file or late submission of the annual statement of salaries and other emoluments paid (Gn°29) now entails the application of a penalty set at the rate of 5% of the annual wage. 

    It should be noted that extending of the deadline for filing the annual CIT return (Gn°4) does not automatically extend the deadline for filing the Gn°29 return. In this respect, therefore the deadline is set on April 30 of each year, with no possibility to postpone under the current tax regulation.

    Clarification on the reporting and payment obligations relating to the withholding tax on profits distributed to legal entities

    Article 11 of FL2024 introduces article 154 into DTC, specifying that debtors distributing income from transferable securities must pay the 5% withholding tax at the time of payment, following reporting obligations and penalties outlined in articles 121 and 122.

    Introduction of the obligation to declare exempt turnover

    Article 40 of FL2024 mandates reporting VAT-exempt turnover on the monthly/quarterly tax return (Gn°50) to improve tracking of VAT exemptions.

    The current tax regulation does not specify the penalties applicable in the event of failure to declare the exempt turnover. 

    In practice, failure to declare may be treated in the event of a tax audit as insufficiency of declaration giving rise to a VAT adjustment.

    Modification of the modalities of submission of the client statement

    FL2024 introduces article 183 in the DTC, following the suppression of article 224 of the same code, covering all the rules and reporting obligations relating to the production and submission of the client statement. The new article does not amend the definition of wholesale sales, nor the information that must be included on this statement. 

    However, we note that this article gives the Tax Administration the right to apply penalties , .

    Article 194-6 of DTC has been amended to set the penalties in the event of late filing, omissions and errors made when completing the above-mentioned statement, in addition to those already applied in the event of failure to declare, as follows:

    • Failure to declare: Penalty set at 2% of the annual turnover for the related year.

    (New) Late filing Fine: 

    • DZD 30 000, when the delay is less than or equal to one month.
    • DZD 50 000, when the delay is more than one month and less than two months.
    • DZD 80 000 if the delay exceeds two months.

    Errors, omissions, or inaccuracies:

    • Tax fine of DZD 1 000 to DZD 10 000 per error, omission, or inaccuracy

    Inaccuracy through the use of maneuvers tending to evade the assessment or liquidation of tax:

    • Penalties under article 303 of the DTC for the use of fraudulent maneuvers.
    • Tax fine varying from DZD 5 000 to DZD 50 000

    Inaccuracy prejudicial to the control of tax returns filed by its customers:

    • Tax fine may vary from DZD 5 000 to 50 000 DZD.

    Limitation period for actions for restitution of income from movable assets

    Article 55 of FL2024 amends Article 109 of the Tax Procedures Code, extending the limitation period for action for restitution of PIT/movable capital income to 4 years for all direct taxes and similar duties.

    Tax audits

    Amendment of the rules governing tax audits

    Articles 44 and 45 of FL2024 bring forth enhanced provisions, ensuring increased guarantees for taxpayers undergoing accounting audits, selective audits, or in-depth audits of the overall tax situation (VASFE), as follow: 

    Extended Preparation Time:
    • Accounting audits and selective audits: Minimum preparation time increased from 10 to 20 days.
    • VASFE: Minimum preparation time extended from 15 to 30 days.
    Access to Taxpayer's Charter:
    • The audited taxpayer for each type of audit now has the ability to consult their charter on the DGI website.
    VASFE Audit Notice Requirements:
    • Full disclosure on the audit notice, including names and ranks of auditors, the audit period, and relevant taxes.
    • Mandatory written notification to the audited taxpayer regarding any changes in auditors during the VASFE audit.

    Possibility of seeking expert assistance for tax audits

    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.


    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.