Algeria

New tax measures introduced by Finance Law (FL) 2025

Personal Taxation

Restructuring of Flat-rate tax regime starting from 2026

FL2025 significantly changed the FRT regime by introducing the evaluation system by modifying Articles 1 and 282 ter of the Tax Procedures Code (TPC). It also introduced several new articles, notably 2, 12, 14-17, 17 bis, and 72-5 of the TPC; and 282 ter and 365 bis of the Direct Tax Code (DTC), and abolishing Article 3 bis of the TPC.

The amendments include:

• A flat-rate evaluation is determined through a biennial contractual agreement between the tax administration and the taxpayer. The tax administration is required to notify the taxpayer of an evaluation notice for the two years in question (Art. 2 of the TPC). This evaluation is established during the first year and may be adjusted in response to changes in activity or new legislation (Art. 16 of the new TPC).
• A response period of 30 days is granted to the taxpayer to provide their observations, indicating the figures they would be willing to accept. The failure to respond will be considered as acceptance (Art. 2 of the TPC).
• The taxpayer can file a claim to request the reduction of the final flat-rate amount determined by the administration (Art. 2 of the TPC). This claim must be filed within 6 months following the date of the final notification of the evaluation notice (Art. 72-5 of the TPC).
• The administration or the taxpayer can terminate the flat-rate evaluation before April 1st of the second year of the biennial period (Art. 12 of the TPC).
• FRT becomes null and void when the information used for its determination proves to be inaccurate. This is also the case when an inaccuracy is found in the documents required by law (Art. 15 of the TPC).
• Taxpayers under the FRT regime must declare by February 1st each year: turnover, investment value and type, employee count, year-end stock value, detailed expenses, and income earned in the past year (Art. 1 of the modified TPC).
• Taxpayers involved in the commercialization of mass consumption products with regulated prices or margins are required to distinctly report, in their annual declaration, the turnover associated with these products separately from the turnover related to other products (Art. 1 of the amended TPC).
• If the achieved turnover exceeds the retained turnover by more than 20% but does not surpass the threshold for the FRT regime (currently specified in article 282 ter of the DTC at 8 million dinars), an adjustment will be made based on the achieved turnover, as per Article 14 of the TPC.
• New taxpayers can be admitted to the FRT regime starting January 1^st of the year following the commencement of their activity, provided they have been operating for at least three months. If not, the FRT regime will only be applicable from the second subsequent year (Art. 17 of the TPC).
• New taxpayers are required to complete the annual declaration in accordance with Article 1 of the TPC (as newly amended) and to pay the FRT based on the actual turnover achieved. They also have the option to choose the real profit regime or the simplified regime for non-commercial professions when submitting the declaration of existence (Art. 17 bis of the TPC).
• The amendments to Article 282 ter of the DTC expand the list of activities excluded from the FRT. These now include alcohol beverage outlets, companies involved in the collection, processing, and distribution of tobacco leaves, catering services, hall rentals for celebrations or events, retail businesses in large stores, vehicle rentals, equipment rentals, travel and tourism agencies, advertising and communication agencies, various training and educational services, as well as general insurance agents and brokers (Art. 282 ter of the DTC).
• Article 29 of FL2025 sets the minimum tax for the FRT at DZD 30,000, instead of DZD 10,000. However, activities carried out under the status of self-employed remain subject to a minimum of DZD 10,000, in accordance with Article 365 bis ter of the DTC.

In conclusion, taking into account the required provisions for the the legislator has scheduled its application to commence on January 1, 2026.

Capital Gain

Articles 5 and 6 of FL2025 introduce modifications to the reporting requirements for taxpayers engaged in the transfer of shares, equity interests, or similar securities. Effective from the implementation date of FL2025, capital gains derived from these transactions must be reported and taxed at the level of the affiliated entity of the company whose shares or equity interests are being transferred. This amendment supersedes the previous requirement to report such gains to the tax office corresponding to the transferor's place of residence.

FL2025 provides, through the introduction of Article 80 quarter of the DTC, that transfers of real estate, whether built or unbuilt, as well as transactions involving shares and equity interests, which do not generate taxable capital gains, must also be declared.

The declaration pertaining to the transaction must be submitted to the appropriate tax authority within 30 days of the sale's completion.

Please be reminded that, in accordance with Article 80 of the DTC, capital gains from the sale of both built and unbuilt properties must be declared to the tax authority in the jurisdiction where the property is located.

Additionally, Article 8 of the same law amends the provisions of Article 104-5. b of the DTC to stipulate that the application of the reduced rate of 5% on capital gains from the sale of shares or equity interests is now conditioned by the taxpayer's commitment to reinvest the said amount during the year following the sale.

The amendment to Article 104-5 b of the DTC stipulates a 25% surcharge for failing to comply with the reinvestment commitment.

Wealth Tax

As a reminder, Article 281 undecies of the DTC stipulates that the wealth tax return must be submitted every four years, no later than March 31^st. This submission must be made at the tax inspection office or the local tax center corresponding to the taxpayer's domicile subject to this obligation.

The amendments made to Article 21 of FL2025 allow taxpayers to submit their wealth tax return for FY2025 by June 30, 2025. This extension encourages taxpayers to regularize their status with the tax administration.

The deadline for submitting the annual income tax return "Gnº1"

Pursuant to Article 7 of FL2025, which amends Article 99 of the DTC, the deadline for submitting the Gnº1 has been extended from April 30 to June 30. This amendment allows taxpayers to account for the tax credits arising from the submission of the Gn°11 (Industrial and Commercial Profits) and Gn°13 (Non-Commercial Professions Profits) returns, whose deadline remains set for April 30.

Provisional installments of Personal Income Tax (PIT) for new taxpayers

Article 26 of FL2025 amends Article 355-3 of the DTC to exempt new taxpayers from provisional installments during their first year of activity.