Algeria

In Algeria, employers face various tax obligations related to payroll, corporate income, and other levies.

Payroll Taxes

• Social Security: Employers contribute 26% of an employee's gross salary towards social security. This covers areas such as retirement, illness, unemployment, and workplace accidents.
• Employee Social Security Contribution: Employees contribute 9% of their pre-tax salary to social security.
• Stamp Duty: Applies at varying rates to transactions, including document execution and deeds.
• Transfer Tax: Levied on the transfer of land and buildings at 5% of the value, plus a 1% land publicity fee.
• Pollution Tax: Applies to assets potentially harmful to the environment, with rates varying based on the specific asset and its potential environmental impact. The exact rates require consultation with current Algerian tax regulations.

Corporate Income Tax (CIT)

• CIT Rates: Vary by industry:
  • 19% for manufacturing activities
  • 23% for construction, public works, hydraulic activities, and tourism (excluding travel agencies)
  • 26% for other activities. Specific rules apply to hydrocarbon and mining sectors.
• CIT Surtax: A 5% surtax is levied on medical importers.
• Minimum CIT: DZD 10,000 annually.
• Tax Losses: Can be carried forward for four years but cannot be carried back.
• Filing and Payment: Annual CIT returns are due by May 31st of the following year. Provisional tax payments are due quarterly on March 20th, June 20th, and November 20th, each equaling 30% of the previous year's tax liability. Any remaining CIT balance is payable with the April tax declaration (G No. 50) submitted by May 20th.

Other Business Taxes

• Tax on Professional Activities (TPA): A 2% tax on turnover.
• Value Added Tax (VAT): Generally 19%, with reduced rates of 9% and 0% for specific goods and services.
• Local Solidarity Tax (LST): Levied on monthly turnover (excluding VAT) for specific sectors, such as 3% for hydrocarbon pipeline transport and 1.5% for certain mining activities.
• Apprenticeship Tax: 1% of payroll.
• Training Tax: 1% of payroll, declared and paid annually.
• Property Tax: Annual tax on real estate, with rates varying based on location.
• Wealth Tax: Applies to property exceeding DZD 100 million on January 1st of the tax year, with rates from 0% to 1% based on the value of holdings.

Income Tax (IRG)

• Progressive Rates: Ranges from 0% to 35%, withheld and remitted by the employer.

Important Considerations

This information is current as of February 5, 2025, and might be subject to changes in regulations. Consulting official Algerian government resources or tax advisors is crucial for complete and up-to-date information.

In Algeria, employee tax deductions encompass several areas, including income tax, social security contributions, and other levies.

Income Tax (IRG - Impôt sur le Revenu Global)

• Progressive Rates: Income tax is levied at progressive rates up to 35%. Specific rates and income brackets are adjusted annually, so it's important to refer to the latest figures for 2025. Monthly salaries below a certain threshold are exempt.
• Taxable Income: Generally includes income from all sources, but certain deductions are allowed, such as travel expenses and mandatory social security contributions. Capital gains from the sale of a primary residence and personal belongings are usually exempt.
• Filing and Payment: Annual income tax returns are typically due by April 30th of the following year.

Social Security Contributions

• Employee Contribution: Employees contribute 9% of their pre-tax salary towards social security. This covers benefits such as healthcare, retirement, and disability.
• Employer Contribution: Employers are responsible for a significantly larger contribution, currently set at 26% of the employee's gross salary. This adds to the overall cost of employment but ensures comprehensive social security coverage for employees.

Other Taxes and Deductions

• Training Tax: A 1% training tax is levied on the payroll and is usually declared and paid annually.
• Wealth Tax: Applies to residents on a worldwide basis for property exceeding a specified value. Non-residents are subject to this tax on property located in Algeria.
• Transfer Tax: Applies to the transfer of land, buildings, and businesses, with varying rates depending on the asset.
• Import Tax: A tax applies on the import of services and goods. Rates and exemptions are subject to change, it's crucial to consult the current regulations.
• Pollution Tax (Environmental Levy): Levied on certain business assets that have an environmental impact, encouraging companies to take measures to reduce negative impact on environment.
• Stamp Duties: Various stamp duties may apply to specific transactions.

Recent Changes and Considerations for 2025

Algeria's tax laws are subject to revisions. The Finance Act often introduces adjustments to rates, exemptions, and deductions. For example, recent changes include VAT exemptions on certain food items and reduced rates for tourism-related services. It is essential to remain informed about these updates to ensure accurate payroll calculations and compliance.

Please note that this information is current as of February 5, 2025, and might be subject to change. It is always recommended to consult with a tax advisor or legal professional for the most up-to-date information and personalized guidance.

In Algeria, Value Added Tax (VAT) applies to most goods and services, with specific regulations governing rates, exemptions, and filing requirements.

VAT Rates

• Standard Rate: 19% applies to most goods and services.
• Reduced Rate: 9% applies to specific goods and services deemed to have economic, social, or cultural importance. Examples include certain basic foodstuffs, some energy products (natural gas and electricity below specific consumption thresholds), tourism-related services (until December 31, 2027), electronic services, and specific goods listed in Article 23 of the Turnover Tax Code.
• Exempt Supplies: Some goods and services are entirely exempt from VAT. These include specific exports, raw oil, and press cakes generated from domestic trituration and oilseed cakes (for a five-year period), transactions within the same corporate group (as defined by the Algerian Tax Code), goods and services directly related to hydrocarbon exploration and exploitation, certain cultural and social activities, and basic necessities like bread and milk. Additionally, equipment for aircraft construction and repair is exempt, as are Algerian ships and aircraft renovated or repaired abroad.

VAT Registration

No specific VAT registration threshold exists in Algeria. Companies must register with the relevant tax authorities and obtain a tax identification number. This applies even if only one sale is made within the country.

VAT Filing and Payment

• Filing Frequency: VAT returns (G50) are filed monthly.
• Deadline: Returns and payments are due by the 20th of the month following the reporting period.

Import and Export Regulations

• Imports: Generally subject to VAT at either 19% or 9%. The taxable base includes the customs value plus all duties and taxes, excluding the VAT itself. Some exemptions mirror those for domestic sales, including goods under customs suspension regimes and goods admitted duty-free under exceptional circumstances.
• Exports: Typically exempt from VAT, though exceptions exist for items like antiques, artwork, gemstones, and precious metals.

Other Indirect Taxes

Algeria also levies other indirect taxes, including:

• Customs Duties: Ranging from 0% to 60%, with potential additional provisional safeguard duties (DAPS) up to 200% on certain imports.
• Excise Taxes: Levied on products like tobacco, electronic cigarettes, matches, and lighters.
• Property Tax: An annual tax based on the real estate's location and value.
• Stamp Duty: Applies to various transactions and document executions, though electronic payments are now exempt. VAT and customs duties are also waived for electronic payment terminal assembly kits until December 31, 2027.
• Advertising Tax: 2%.

Record Keeping

Businesses must maintain detailed records for 10 years. These records should include sales invoices, purchase invoices, VAT return copies, tax authority correspondence, general accounting records, and supporting documents like contracts, shipping documents, and proof of payment.

Electronic Invoicing

Although still under development as of today (February 5, 2025), the eventual implementation of e-invoicing is expected to streamline compliance management.

It's important to note that this information is current as of today, February 5, 2025, and might be subject to change due to regulatory updates or future legislation. For the most current information, consulting with a tax professional or the Algerian tax authorities directly is highly recommended.

Algeria's 2025 Finance Act introduces several tax incentives impacting various sectors. As of February 5, 2025, the following incentives are in effect:

Value-Added Tax (VAT) Reliefs

• VAT Exemption on Food and Agricultural Products: An extension of the VAT exemption for imports and sales of dried vegetables, rice, fresh fruit and vegetables, eggs, broiler chicken, and locally produced turkey until December 31, 2025.
• Reduced Customs Duty on Frozen White Meat: Implementation of a temporary 5% customs duty rate on imports of frozen white meat, effective until December 31, 2025.
• VAT Reliefs for Coffee Exports: VAT exemption, exemption from domestic consumption tax, and a reduced customs duty rate on exported coffee are in effect until December 31, 2025.
• Reduced VAT Rate for Tourism Services: The reduced 9% VAT rate has been extended until December 31, 2027 for services related to tourism, hotels, spas, tourist restaurants, and travel and tourist transport vehicle rentals.
• VAT and Customs Duty Exemptions for Electronic Payment Terminal Assembly Kits: Exemptions on imports of kits for assembling electronic payment terminals from January 1, 2025, to December 31, 2027.

Income Tax Reliefs

• Deductions for Research and Development and Open Innovation: Deductions are available for expenses related to in-house research and development, and for expenditures incurred as part of open innovation programs with startups and business incubators.
• Tax Benefits for Start-ups and Innovative Projects: Several tax benefits are available for start-ups, innovative projects, and business indicators, including exemptions from transfer duties on real estate acquisitions for new industrial activities. This includes exemption from registration duty for companies classified as "innovative projects." Companies in incubator programs receive a two-year extension on their exemption from personal income tax (IRG) and corporate income tax (IBS).
• Tax Relief for Southern Provinces: Extended and halved rates of personal and corporate income tax are available for income generated by individuals and businesses permanently established in Algeria's southernmost provinces.
• Reduced Corporate Income Tax Rate for Reinvestments in Manufacturing: Manufacturing companies benefit from a reduced 10% CIT rate on reinvestments made during the same fiscal year. Eligible reinvestments include acquisition of production equipment, and acquisition of shares or similar securities.
• Reduced CIT Tax Base for Electronic Transactions: Commercial banks and Algérie Poste benefit from a reduced CIT taxable base for 2025, equivalent to commissions earned on electronic transactions. An exemption from stamp duty applies to payments made electronically.

Other Tax Provisions

• Tax Relief for Audiovisual and Print Media: The Finance Act introduces three tax relief measures to support these sectors.
• Incentives to Promote Sovereign Sukuk: The law includes new tax incentives for sovereign sukuk.
• Extended Deadline for Wealth Tax Returns: An exceptional extension for filing 2025 wealth tax returns has been granted until June 30, 2025.

General Investment Incentives

Algeria offers various incentives to encourage investment, including certain corporate tax and property tax exemptions for up to 10 years for investments meeting specific criteria, such as job creation (500+ jobs) and location in designated zones. Specific incentives are available for investments promoting environmental protection and the oil industry.

Tax Treaties

Algeria has double taxation treaties with several countries. These treaties may modify the standard withholding tax rates on dividends (generally 15%), interest (generally 10%), and royalties (generally 30%).

It's important to consult with tax professionals or the Algerian Agency for Investment Promotion (AAPI) for detailed information specific to your circumstances. This summary is current as of February 5, 2025, and might change with future legislative updates.