Individual - Significant developments

Last reviewed - 08 June 2021
  • Article 8 of the Finance Law for 2020 (FL 2020) introduced an important measure, which consists of a reduction in the turnover limit for taxpayers subject to the unique flat-rate tax regime (IFU). It also excludes legal persons and non-commercial professions from this regime, which only entitles individuals/natural persons to be liable under such regime.
  • The Complementary Finance Law 2020 (CFL 2020) has excluded wages less than 30,000 Algerian dinars (DZD) per month (i.e. payroll category) from the taxable base for personal income tax (PIT), with the application of an additional tax cut in addition to the existing reduction in Article 104 of the Direct Tax Code (CIDTA).

  • Permanent PIT exemption for export operations carried out by natural persons: Export transactions of goods and services performed by natural person that generate foreign currency will now avail of permanent exemptions under PIT.

  • Introduction of property income taxation on undeveloped property rentals: Article 12 of the Finance Law 2021 (FL 2021) establishes a 15% tax rate in full discharge of tax to levy on undeveloped property rentals in the same manner levied on rental income for trading or professional purposes. As for undeveloped property rental for agricultural use, a rate of 10% applies in full discharge of tax.
  • Exemption of allowances related to special conditions of residence and isolation: FL 2021 introduces an exemption for PIT purposes concerning allowances of special residence and isolation conditions. However, the exemption will be granted to taxpayers within the limit of 70% of the basic salary.

  • Rearrangement of the exemption mechanism for capital gains on the transfer of stocks and equity shares upon re-investment: The exemption from PIT in case of reinvestment of the capital gain is now repealed by FL 2021 and provides, alternatively, a reduced rate of 5% in case of capital gain re-investment.