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Tax rates in Algeria

Tax Rates

Consumption Taxes

Nature of the Tax
Value added tax (VAT) (Taxe sur la valeur ajoutée - TVA)
Tax Rate
19%
Reduced Tax Rate
A special reduced rate of 9% applies to sales operations carried out on the internet, the supply of natural gas for a consumption of less than 2,500 thermal units per quarter, specific kits dedicated to the automobile industry, the supply of electrical energy, for low-voltage electricity consumption of less than 250 KWH per quarter, the supply of drinking water by the distribution agencies to domestic households, the sale of tickets to cinematographic theaters.
As a transitional measure and until 31 December 2024, the services related to tourist activities, hotel, spa, classified tourist catering, travel and rental of tourist transport vehicles are subject to the 9% VAT reduced rate.

The acquisition of products, goods and services already benefiting from a VAT exemption or VAT franchise regime is zero-rated.

Other Consumption Taxes
Imports are subject to custom duties with the following rates: duty-free, 5%, 15%, 30%, or 60%.

Tobacco products are subject to excise tax set at the rate of 5% starting from 2022. An annual property tax is levied on real estates, with rates varying according to the location of the property.
Various stamp duties apply.

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Corporate Taxes

Company Tax
19% (10% reduced rate for reinvested profits in the frame of manufacturing activities)
Tax Rate For Foreign Companies
IBS (Impôt sur le Bénéfice des Sociétés) is levied on all Algerian-sourced profits, including income of representative agents of foreign companies and income of companies that do not have an establishment or representative agent but realize a complete cycle of commercial activities in the country. Non-resident entities are taxable in Algeria on their Algerian-source income whatever the way and wherever the location the work is carried out.
Capital Gains Taxation
Capital gains are generally taxed as ordinary income at the corporate income tax rate (Impôt sur le Bénéfice des Sociétés, or IBS). In some cases, a 30% relief is granted if the assets have been held for up to three years, or 65% if the assets have been held for longer periods.
An exemption can be granted on capital gains deriving from the disposal of assets, provided that the company commits to re-invest them within a three-year period.
Main Allowable Deductions and Tax Credits
In general, expenses are deductible if they are: registered in the accounts and supported by an invoice; not specifically listed as non-deductible items; incurred in the company's interest, and certain, liquid, and due during the financial year.
Expenses are deductible for amortisation, reserves, interest expenses, rents for premises and equipment, wages, pension expenses, etc. Some non-deductible expenses include fines, gifts, subsidies and restaurant, hotel and entertainment expenses not directly linked to the business.

The depreciation rates usually follow this scheme: office items depreciation rate is 10% or 20%; industrial buildings 5%; cars 20% or 25% (limited to DZD 1 million). The annual deductibility limit for expenses relating to the renting of passenger vehicles is set at DZD200,000 and their maintenance cost's deductibility is limited to DZD20,000 per vehicle.
Starting from 2022, the deductibility threshold of low-value expenses is raised from DZD 30,000 to DZD 60,000.
Start-up expenses are deductible when paid and cannot be capitalised and depreciated. Bad debts are deductible if legal action has been taken to recover the debt or when evidence is provided that the receivable has become irrecoverable. Charitable contributions are deductible (capped at DZD 4 million).
Advertising gifts are deductible up to DZD 1,000/unit (capped at DZD 500,000).
Some specific provisions apply to R&D expenses: they are fully deductible when paid by the entity bearing the expenses and when justified. Revenues derived from R&D activities are exempted from corporate income tax (capped at 10% of the taxable benefit or DZD 100 million), provided that the exempted amount is reinvested in R&D activities.
Taxes are generally deductible (except the IBS itself, the tax on apprenticeship and training and that on passenger cars).

Incentives are further available for qualifying investments that are declared to the National Agency for Investment Development (ANDI), such as investments to acquire assets included in the creation of new activities, to participate in the share capital of an Algerian company and to take over privatisation activity. Exemptions could apply to VAT, IBS or the Tax on Professional Activity (TAP). Specific rates depend on whether the investment qualifies in the general regime or the derogatory regime (which requires contribution from the Algerian state). A temporary exemption from IBS is granted to investing companies creating at least 100 jobs.

Other Corporate Taxes
An annual property tax is levied on real estate, with rates varying according to the location. A wealth tax applies with rates varying from 0% (up to DZD 100 million) to 1% (for a value of holdings above DZD 450 million).

Other significant taxes include Tax on Professional Activity (TAP) of 1.5% of turnover (or 3% for companies engaged in the transport of hydrocarbons, with several rebates according to the sector of activity), Apprenticeship Tax of 1% of payroll, and Training Tax of 1% of payroll (should be declared and paid on an annual basis). Social contributions paid by the employer amount to 26% of gross salary.
A Transfer Tax applies to land, buildings, and ongoing business at a rate of 5% for registration fees, plus 1% for publication formalities for the transfer of ownership of land and buildings.

A 4% tax applies on the import of services (Bank Domiciliation Tax, reduced to 0.5% for the importation of goods or merchandise with a minimum amount of DZD 20,000). A pollution tax is levied on assets that may be harmful to the environment.
Various stamp duties apply.

Other Domestic Resources
Directorate-General of Taxes
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Algeria Middle East & North Africa United States Germany
Number of Payments of Taxes per Year 27.0 20.8 10.6 9.0
Time Taken For Administrative Formalities (Hours) 265.0 204.0 175.0 218.0
Total Share of Taxes (% of Profit) 66.1 32.1 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Global income tax (IRG) Progressive rate up to 35%
Up to DZD 240,000 0%
From DZD 240,001 to 480,000 23%
From DZD 480,001 to 960,000 27%
From DZD 960,001 to 1,920,000 30%
From DZD 1,920,001 to 3,840,000 33%
Over DZD 3,840,000 35%
A reduction of 40% of the payable tax applies (between DZD 1,000 and 1,500 per month)
Allowable Deductions and Tax Credits
Deductions include personal allowances (such as social insurance contribution, mortgage interest expenses, alimony and qualifying insurance premiums), business expenses and other expenses such as maintenance allowance and interest paid on loans for a business purpose (the same rules for business deductions are applicable for individuals as for corporations). Certain income from rented properties is exempted from taxes (for instance, rental for students). Paid taxes are also deductible, as well as mortgage expenses.
The following expenses are not deductible: charitable contributions, education expenses, childcare expenses, life insurance and healthcare expenses.
For further details, consult the guide of the Directorate-General of Tax.
Special Expatriate Tax Regime
There is no special expatriate tax regime in Algeria.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Directorate-General of Taxes
Withholding Taxes
Dividends: 15% for both residents and non-residents.

Interest: 10%, unless the rate is reduced under a tax treaty.

Royalties: 0 when paid to residents, 30% when paid to non-residents (unless specified otherwise by a treaty).

Technical service fee (withholding tax applied on service fees paid abroad by a local company to a foreign company): 30% (unless specified otherwise by a treaty).

Branch remittance tax (applied to remittances by a permanent establishment to its foreign head office): 15% (unless specified otherwise by a treaty).

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Latest Update: September 2022

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