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2015 /16
Algeria
FOREWORD
A country's tax regime is always a key factor for any business considering moving into new markets.
What is the corporate tax rate? Are there any incentives for overseas businesses? Are there double
tax treaties in place? How will foreign source income be taxed?
Since 1994, the PKF network of independent member firms, administered by PKF International
Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide international businesses
with the answers to these key tax questions.
As you will appreciate, the production of the WWTG is a huge team effort and we would like to
thank all tax experts within PKF member firms who gave up their time to contribute the vital
information on their country's taxes that forms the heart of this publication.
The PKF Worldwide Tax Guide 2015/16 (WWTG) is an annual publication that provides an overview
of the taxation and business regulation regimes of the world's most significant trading countries. In
compiling this publication, member firms of the PKF network have based their summaries on
information current on 1 January 2015, while also noting imminent changes where necessary.
On a country-by-country basis, each summary such as this one, addresses the major taxes applicable
to business; how taxable income is determined; sundry other related taxation and business issues;
and the country's personal tax regime. The final section of each country summary sets out the
Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends,
interest, royalties and other related payments.
Whilst the WWTG should not to be regarded as offering a complete explanation of the taxation
issues in each country, we hope readers will use the publication as their first point of reference and
then use the services of their local PKF member firm to provide specific information and advice.
Services provided by member firms include:

Assurance & Advisory;

Financial Planning / Wealth Management;

Corporate Finance;

Management Consultancy;

IT Consultancy;

Insolvency - Corporate and Personal;

Taxation;

Forensic Accounting; and,

Hotel Consultancy.
In addition to the printed version of the WWTG, individual country taxation guides such as this are
available in PDF format which can be downloaded from the PKF website at www.pkf.com
PKF Worldwide Tax Guide 2015/16
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Algeria
IMPORTANT DISCLAIMER
This publication should not be regarded as offering a complete explanation of the taxation matters
that are contained within this publication. This publication has been sold or distributed on the
express terms and understanding that the publishers and the authors are not responsible for the
results of any actions which are undertaken on the basis of the information which is contained
within this publication, nor for any error in, or omission from, this publication.
The publishers and the authors expressly disclaim all and any liability and responsibility to any
person, entity or corporation who acts or fails to act as a consequence of any reliance upon the
whole or any part of the contents of this publication.
Accordingly no person, entity or corporation should act or rely upon any matter or information as
contained or implied within this publication without first obtaining advice from an appropriately
qualified professional person or firm of advisors, and ensuring that such advice specifically relates to
their particular circumstances.
PKF International is a family of legally independent member firms administered by PKF International
Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility
or liability for the actions or inactions on the part of any individual member firm or firms.
PKF INTERNATIONAL LIMITED
JUNE 2015
© PKF INTERNATIONAL LIMITED
All RIGHTS RESERVED
USE APPROVED WITH ATTRIBUTION
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Algeria
STRUCTURE OF COUNTRY DESCRIPTIONS
A. TAXES PAYABLE
FEDERAL TAXES AND LEVIES
COMPANY TAX
TAX ON TOTAL INCOME
TAX ON PROFESSIONAL ACTIVITY
VALUE ADDED TAX (VAT)
SINGLE FLAT TAX
STAMP DUTY
PROPERTY TAX
FRINGE BENEFITS TAX
OTHER TAXES AND LEVIES
VOCATIONAL TRAINING TAX
BRANCH TAX
LUXURY VEHICLE TAX
B. DETERMINATION OF TAXABLE INCOME
DEPRECIATION
STOCK/INVENTORY
DIVIDENDS
LOSSES
FOREIGN SOURCED INCOME
INCENTIVES
C. FOREIGN TAX RELIEF
D. CORPORATE GROUPS
E. WITHHOLDING TAX
F. PERSONAL TAX
G. TREATY AND NON - TREATY WITHHOLDING TAX RATES
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Algeria
MEMBER FIRM
For further advice or information please contact Oliver Grosse-Brauckmann, PKFI EMEI Regional
Director on +44 203 691 2523 or email [email protected]
BASIC FACTS
Full name:
Capital:
Main language:
Other languages:
Population:
Major religion:
Monetary unit:
Internet domain:
Int. dialling code:
People's Democratic Republic of Algeria
Algiers
Arabic
French (business and education); Berber (constitutionally national)
38.7 million (2014 estimate)
Islam
Algerian Dinar (DZD)
.dz
+213
KEY TAX POINTS
•
All companies who realize a turnover exceeding 30 million dinars are liable for corporate
income tax on their profits arising from any business they carry on in Algeria, except of certain
categories restricted quoted by the tax code.
•
All economic activities conducted in Algeria, including industrial and handicraft activities and
liberal or commercial professions, are subject to VAT.
•
Dividends paid to shareholders or partners Algerians are subject to a withholding tax of 10%;
however, if the shareholder or the shareholder is a corporation, the profit from such
distribution is not subject to income tax.
•
Relief from foreign Taxes in Algeria depends on whether the country in question has agreed a
double tax treaty with Algeria.
•
Withholding tax applies to wages, dividends, royalties and technical service fees.
A. TAXES PAYABLE
FEDERAL TAXES AND LEVIES
COMPANY TAX
All companies, except partnerships and joint ventures under the Commercial Code, are liable for
corporate income tax on their profits arising from any business carried on in Algeria.
Companies are liable for corporate income tax at the rate of 23% for all kinds of activities
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Foreign companies not established in Algeria and foreign companies with no permanent
establishment in Algeria are subject to withholding tax of 24% on their turnover realized in Algeria or
they can be taxed according to the general scheme following a request.
TAX ON TOTAL INCOME
It is a tax that applies on the income of individuals (natural person) and those of partnerships. The
overall net income is the total net income of the following categories:
 The industrial, commercial and craft;
 Benefits for non-commercial professions;
 Income from agriculture;
 Income from the rental of developed and undeveloped properties.
 Income from movable capital;
 Wages, salaries, pensions and annuities
The rate of this tax is illustrated below:
Income
(DZD)
Rate
(%)
0 to 120,000
0
120,001 to 360,000
20
360,001 to 1,440,000
30
Over 1,440,000 DZD
35
TAX ON PROFESSIONAL ACTIVITY
This tax is applied to the turnover excluding VAT of natural or legal person. The rate of tax is set at
2%. The tax base consists of the total revenues raw professional or excluding VAT turnover when it
comes of taxpayers subject to this tax, made in Algeria during the year.
VALUE ADDED TAX (VAT)
VAT is an indirect tax, in that the tax is collected from someone who does not bear the entire cost of
the tax. All economic activities conducted in Algeria, including industrial and handicraft activities and
liberal or commercial professions, are subject to VAT.
Exports by definition are consumed abroad and usually are not subject to VAT. Any VAT charged
under such circumstances is usually refundable. This avoids downward pressure on exports.
(1) Rates. Two different VAT rates apply in Algeria:
•
A special reduced rate of 7% applies to products, commodities, wares, merchandise and
operations related to printing, materials for agriculture, products of traditional crafts,
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plants and domestic animals (aquaculture products), excluding fish and other edible
products of sea and various other items; and,
•
17% for operations related to services and goods not subject to another rate.
(2) Registration
Registration generally is required for entities that have an annual turnover of DZD 100,000 for
sales of goods and DZD 130,000 for the service. A business must register within 30 days of
becoming liable.
(3) Filing and payment
Monthly returns and any tax payable are due by the 20th day of the following month.
SINGLE FLAT TAX
It is a tax that replaces taxes (TOTAL INCOME TAX or INCOME TAX , VAT and TAX ON PROFESSIONAL
ACTIVITY) that is applied to taxpayers whose turnover does not exceed 30 million dinars.
The rate of this tax are:

12%: applicable to the service delivery activity;

6%: applicable to sales activity.
STAMP DUTY
It is a tax that applies to the documents listed by the law, among them there are: - Contracts subject
to the registration fee, court documents, negotiable instruments (bills of exchange, promissory
notes, bills and non-marketable bonds) trade register.
PROPERTY TAX
It is a tax that applies to developed and undeveloped properties. The rate of PT vary between 3 and
10%.
FRINGE BENEFITS TAX
As fringe benefits are considered to be a part of the salary paid to an employee, they are subject to
social security and income taxes. Taxable fringe benefits are evaluated on the basis of their market
value.
OTHER TAXES AND LEVIES
VOCATIONAL TRAINING TAX
Companies that employ more than six (6) permanent employees are subject to a tax of 1% of the
annual payroll for vocational training. An additional tax of 1% of the annual payroll is also payable
(for learning) for all companies that employ more than 20 permanent employees, taxpayers may be
exempt from paying this tax on condition to initiate training and learning.
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BRANCH TAX
Introduced by the Finance Act 2009 (Section 6), branch tax is applicable to profits transferred to a
non-resident by the branch or permanent establishment of a foreign company.
The tax is payable on the profit after company tax at 15%.
LUXURY VEHICLE TAX
Vehicles registered in the category of passenger cars (PC) which are less than five (5) years old and
disclosed in the Balance Sheet of a company established in Algeria, or rented by the company tor a
cumulative period equal to or greater than three (3) months during a tax period, are subject to an
annual tax determined as follows:
Between DZD 2,500,000 and DZD 5,000,000:
DZD 300,000
Over DZD 5,000,000:
DZD 500,000.
However, the tax does not apply to vehicles intended exclusively for sale, either to rent or to execute
a transport service available to the public, when these operations correspond to the normal activity
of the owning company.
B. DETERMINATION OF TAXABLE INCOME
Taxable income is determined on the basis of regular accounting results. When there are
discrepancies between fiscal rules and accounting principles, adjustments are made to the
accounting results. Profits are habitually considered to be gross revenue less production, salary and
wages and rental expenses.
Generally, all expenses generated in the conduct of business are deductible if they are incurred in
gaining or producing assessable income.
DEPRECIATION
Fixed assets owned by a company are normally written off over their normal useful life. For tax
purposes, the straight-line method is normally adopted but other methods may be used in certain
circumstances and with the authorisation of the tax authorities following a request.
STOCK / INVENTORY
For the determination of net income, inventories must be evaluated at their cost price. If, at the end
of the year, the market or realisable value is lower, the company must set up reserves for
depreciation of the inventories. The tax authority is very strict regarding the deductibility of
provisions, it requires that provisions be documented.
DIVIDENDS
Dividends received from Algerian subsidiaries are not taxable.
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LOSSES
Losses may be carried forward for four years. The carry back of losses is not permitted.
FOREIGN SOURCED INCOME
Revenues from a foreign source that are subject to tax at source on the payment in the country of
origin are not subject to tax in Algeria in case of existence of bilateral agreement
Non-resident legal entities are taxable on their Algerian source income and on gains from the
disposal of buildings and the disposal of shares in real estate companies. The taxable capital gain is
the difference between the sale price and the purchase cost.
Relief from foreign taxes in Algeria depends on whether a double tax treaty has been concluded by
Algeria.
INCENTIVES
The Algerian tax legislation has established a number of incentives to facilitate investment and the
creation of projects in certain sectors. Incentives are aimed at accelerating the growth rate and job
creation within activities related to fields determined by the specific legislation. Major incentives are
available for investments made by enterprises located in areas that require development.
Investment project can be tax advantages in the launch phase, and three years during the
operational phase.
C. FOREIGN TAX RELIEF
Relief from foreign Taxes in Algeria depends on whether the country in question has agreed a double
tax treaty with Algeria.
Algeria has concluded more than 20 non-double imposition treaties. The treaty must be ratified to
be applicable.
D. CORPORATE GROUPS
When an Algerian company holds 90% or more of the shares of one or more Algerian companies, the
group may choose to be taxed as a single entity. Hence, the subsidiaries are treated as branches of
the parent company and corporate tax is payable only by the parent company.
To benefit from the results integrating scheme, the parent company must make the commitment to
list its shares on the stock market before the end of the year. Under this system, the profits and
losses of all controlled branches, subsidiaries and partnerships in Algeria and abroad are
consolidated.
E. WITHHOLDING TAXES
For certain categories of income, the payer of income has to withhold tax at source, file tax returns
and submit the amount of tax withheld to the financial authorities.
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•
Dividends: Dividends paid to non-resident shareholders are subjected to a 15% withholding tax
which may be reduced under a tax treaty.
•
Royalties: The withholding tax on royalties is 24% which may be reduced under a tax treaty.
•
Technical service fees: The withholding tax on technical service fees is 24% and applies to the
gross income derived from any service fee paid abroad by a local company to a foreign
company.
F. PERSONAL TAX
With respect to the international taxation agreements, personal income tax is a direct tax levied on
the income of an individual. Taxpayers are classified into residents and non-residents. Income
subject to tax is called assessable income and is divided into seven categories:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Industrial profits, commerce and craft;
Professional non-profit business;
Income from agriculture;
Income from rental properties (built and unbuilt);
Income from movable capital;
Wages, salaries, pensions and life annuities; and,
Gains from transfer for value of buildings or undeveloped and related rights.
For each category of income, certain deductions and allowances are allowed in the calculation of the
taxable income. Taxpayers should keep their books of account in compliance with the accounting
legislation in order to benefit from these deductions. In general, a person liable to personal income
tax has to compute his tax liability, file a tax return and pay tax, if any, on a calendar year basis.
Married couples file tax returns as separate individuals. Income of children is reported on the tax
return of the head of the family. A spouse can report the income of their children on his/her tax
return in certain circumstances.
G. TREATY AND NON-TREATY WITHHOLDING TAX RATES
Algeria has tax treaties with the following countries:
Germany, South Africa, Austria, Belgium, Bahrain, Bulgaria, Canada, China, South Korea, Spain,
Egypt, UAE, France, Italy, Indonesia, Jordan, Kuwait, Lebanon, Portugal, Romania, Russia, Sultanate
Oman, Syria, Switzerland, Turkey, UMA, Ukraine, Yemen.
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