Algeria Tax Regime

Algeria operates a standard corporate tax regime with activity-differentiated rates — 19% for manufacturing, 23% for building, public works, hydraulics and tourism/thermal activities, and 26% for all other activities — alongside a separate withholding-tax regime for non-resident service providers without a taxable presence. The system reflects Algeria's hydrocarbon-dependent economy and its policy emphasis on incentivising manufacturing and reinvestment, with a preferential 10% rate for profits reinvested in manufacturing. Since the abolition of the former tax on professional activity (TPA), a Local Solidarity Tax (LST) has been introduced on specified turnover streams to preserve local-authority revenue. Algeria's treaty network and territoriality rules for permanent establishments have been progressively clarified, most notably by the 2022 Finance Law amendments to the Tax Code's territoriality provisions.

1.1 Sources

Primary legislation includes the Algerian Tax Code (Code des Impôts Directs et Taxes Assimilées), the VAT Code, the Tax Procedures Code and the annual Finance Laws.

1.2 Recent developments

Article 34 of the 2022 Finance Law amended Article 137 of the Algerian Tax Code to clarify the territoriality of corporate income tax, bringing within scope profits of foreign companies attributable to Algeria under an applicable double tax treaty — including profits through a treaty-defined permanent establishment, income from Algerian-situated property, and any other profit for which Algeria holds taxing rights under a treaty. The tax on professional activity (TPA) has been definitively abolished, with the Local Solidarity Tax (LST) introduced to compensate local authorities for the resulting revenue loss, levied on hydrocarbon pipeline transport (3% of monthly turnover) and mining activities (1.5%). Since 2017, service contracts taxed under the 30% non-resident withholding regime have also become subject to Algerian VAT where the withholding calculation base benefited from a rate reduction or rebate under domestic law or a treaty.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

Resident companies are taxed in Algeria on worldwide income under the standard tax regime. Corporate income tax (CIT) rates are activity-differentiated: 19% for manufacturing activities, 23% for building activities, public works, hydraulics, and tourist and thermal activities (excluding travel agencies), and 26% for all other activities. Where a company carries on mixed activities taxable at different rates, taxable profit is apportioned between rates according to the turnover attributable to each activity. A reduced 10% rate applies to profits reinvested within manufacturing activities, subject to conditions on the nature and timing of the reinvestment. Companies filing nil annual returns must nonetheless pay a minimum CIT of DZD 10,000. Non-resident companies are taxed on Algerian-source income; absent a treaty, this covers income from work rendered or used in Algeria regardless of where physically performed, generally collected through the withholding tax regime described in section 2.11 unless a taxable permanent establishment is constituted.

2.2 Dividends and participation exemption

Dividends distributed between Algerian resident companies are generally exempt from further corporate taxation at the recipient level where the distributing company is itself subject to Algerian CIT, avoiding double taxation within a domestic corporate chain. Dividends paid to non-resident shareholders are subject to withholding tax at the domestic statutory rate, reduced under applicable double tax treaties. Capital gains realised by resident companies on the disposal of shareholdings are generally included in ordinary taxable income, though preferential treatment can apply to gains reinvested within prescribed reinvestment rules.

2.3 Income determination and deductions

Taxable income is determined from the statutory accounts prepared under the Algerian financial accounting system (Système Comptable Financier), adjusted for tax-specific rules. Ordinary and necessary business expenses supported by proper documentation are deductible; certain expenses are subject to caps or exclusion, including a portion of executive remuneration considered excessive, specified entertainment and gift expenses above regulatory thresholds, and payments made in cash above prescribed limits. Depreciation generally follows a straight-line method over the useful life of the asset, with accelerated depreciation available for certain categories of industrial equipment subject to approval. Provisions for doubtful debts are deductible where specific and adequately evidenced.

2.4 Interest limitation

Interest paid to shareholders on current accounts and related-party loans is deductible only within limits referencing the paid-up share capital of the borrowing company and a capped interest rate benchmarked to the central bank's reference rate; interest in excess of these limits is treated as a non-deductible distribution. Thin-capitalisation-style scrutiny and the arm's-length principle apply more broadly to related-party financing arrangements under transfer pricing rules, and deduction of interest paid to entities in jurisdictions considered non-cooperative can be restricted or denied.

2.5 Losses

Tax losses may generally be carried forward for four years following the loss-making year; a longer carryforward period of up to seven years is available for the portion of losses attributable to depreciation. There is no loss carryback mechanism. Loss carryforwards are attached to the legal entity that incurred them, and continuity-of-business scrutiny may apply where the tax administration considers a change in activity or ownership to represent an abuse of the loss-relief rules.

2.6 Group taxation

Algeria operates a fiscal integration (consolidation) regime allowing a parent company holding at least 90% of the capital of resident subsidiaries to elect group taxation, under which the results of group members are consolidated for CIT purposes, with intra-group dividends and certain intra-group transactions neutralised. The election is subject to a minimum multi-year commitment period, and eligibility is generally restricted to Algerian resident companies subject to the standard CIT regime, excluding companies benefiting from specific exemption regimes.

2.7 Controlled foreign companies

Algeria does not operate a comprehensive controlled-foreign-company regime attributing the income of foreign subsidiaries to Algerian parent companies on a look-through basis. Protection against profit-shifting to low-tax jurisdictions instead relies on transfer pricing enforcement, the territoriality-based CIT scope (as clarified by the 2022 Finance Law), and restrictions on the deductibility of payments to related parties in jurisdictions considered non-cooperative or subject to a preferential tax regime.

2.8 Transfer pricing

Related-party transactions must be priced on arm's-length terms, and the tax administration is empowered to reassess profits considered to have been shifted outside Algeria through non-arm's-length pricing, notably in transactions with related entities established outside Algeria or in jurisdictions with a preferential tax regime. Companies within the scope of the large-enterprise tax directorate and those with related-party transactions above prescribed thresholds must maintain contemporaneous transfer pricing documentation and file an annual transfer pricing declaration alongside their CIT return, describing the group structure, the nature and value of related-party transactions and the pricing methodology applied.

2.9 Incentives

The principal incentive is the preferential 10% CIT rate for profits reinvested in manufacturing activities. Additional incentives are available under the investment promotion framework administered by the national investment agency, including customs duty exemptions and VAT suspension on capital goods imported for approved investment projects, temporary CIT exemptions for investments in designated development regions (South and Highlands regions) and job-creation-linked incentives. Export-oriented activities outside the hydrocarbon sector may benefit from reduced taxation on export-derived turnover, subject to conditions on repatriation of export proceeds through the banking system.

2.10 Pillar Two

Algeria has not enacted Pillar Two legislation and does not currently apply an income inclusion rule, undertaxed profits rule or qualified domestic minimum top-up tax. Multinational groups with Algerian operations that are headquartered in jurisdictions applying an income inclusion rule should nonetheless monitor exposure, since Algerian profits benefiting from reduced rates or incentive regimes could be topped up abroad to the 15% global minimum where the blended effective Algerian rate for the jurisdiction falls below that threshold.

2.11 Branch income and reorganisations

Where a foreign company's activity in Algeria constitutes a taxable permanent establishment (either under domestic law absent a treaty, or under the applicable treaty definition), it is taxed on its Algerian-attributable profits at the ordinary activity-based CIT rates, with restrictions on the deductibility of head-office overhead allocations. Where a foreign company performs a services contract in Algeria without constituting a treaty permanent establishment, the engagement is instead subject to the withholding tax regime: a 30% withholding on the gross invoiced amount of services, which bundles CIT, the former TPA and VAT into a single collection mechanism; since 2017, such contracts have also been separately subject to Algerian VAT where the withholding base benefited from a rate reduction or rebate. Algeria does levy a branch profits charge. Under article 46-9° of the Code des impôts directs et taxes assimilées, the after-tax profits realised in Algeria by a non-resident company through its Algerian branch or other professional installation are treated as distributed income and taxed as such. The Finance Law for 2026, signed on 14 December 2025 and published in Journal Officiel n° 88 of 31 December 2025, recasts article 46-9° so that those profits are deemed distributed on realisation whether or not they are actually remitted to head office, and the new article 356 quinquies requires the non-resident to compute and pay the tax within the time limits fixed for the balance of its corporate income tax liquidation. The rate should be confirmed with the Direction Générale des Impôts before it is relied on, because the two candidate bullets of article 150-2 pull in opposite directions and each has something to be said for it. The 15% bullet is addressed to legal persons having no permanent professional installation in Algeria, which a branch by definition has — but its scope clause reaches the income referred to in articles 45 to 48, and article 46-9° sits inside that range. The 5% bullet covers income from the distribution of profits that have already borne corporate income tax, which is what article 46-9° describes in its own words as bénéfices nets d'impôts. Groups should therefore budget within a 5% to 15% range until the position is confirmed. Domestic reorganisations (mergers, demergers, contributions) can in principle benefit from deferral of gains under specific approval, though cross-border reorganisations are assessed case by case with capital gains taxation the default absent relief.

3.1 Residence and rates

An individual is considered Algerian tax resident where they have their permanent home, principal place of abode (habitual presence generally exceeding 183 days in a calendar year), the centre of their economic interests, or their principal professional activity in Algeria. Residents are taxed on worldwide income; non-residents on Algerian-source income only. The personal income tax (impôt sur le revenu global, IRG) applies progressive rates to aggregate net income by category, running from an exempt lower band up to a top marginal rate in the mid-30s percent range for the highest bracket, with several intermediate brackets; salaries are subject to a separate progressive schedule collected through employer withholding.

3.2 Capital income and real estate

Dividends and interest paid to resident individuals are generally subject to withholding tax at source, which for many savers is treated as a final discharge of liability on that income, simplifying compliance for portfolio investors. Capital gains realised by individuals on the disposal of Algerian real estate are subject to tax at a specific rate on the gain, with exemptions available for a taxpayer's sole primary residence held beyond a minimum period. Gains on listed securities are generally subject to a preferential flat rate, reflecting Algeria's policy of encouraging capital markets participation.

3.3 Social security and payroll

Employees and employers both contribute to the National Social Insurance Fund system, with combined contribution rates representing a substantial addition to payroll cost, split unevenly with the employer bearing the larger share; contributions fund pensions, health insurance, unemployment and family benefits. Employers withhold IRG on salaries monthly under a pay-as-you-earn mechanism applying the specific salary-income progressive schedule, with the withholding generally treated as final for employees without other significant income sources.

3.4 Inbound individuals

Algeria does not levy a general net wealth tax on individuals. Inheritance and gift transfers are subject to registration duties calculated by reference to the value transferred and the degree of kinship between transferor and transferee, with preferential low rates for transfers between close family members. There is no dedicated expatriate tax regime, though foreign personnel engaged on approved investment projects or under specific bilateral cooperation arrangements may benefit from simplified administrative treatment agreed as part of the underlying project approval. Individuals becoming Algerian tax resident are subject to standard worldwide taxation from the point residence is established, subject to relief under an applicable double tax treaty for foreign-source income already taxed abroad.

Algeria applies withholding tax to a range of domestic and outbound payments, alongside the distinct 30% bundled withholding regime for non-resident service contracts described in section 2.11. Dividends paid to non-residents, interest and royalties paid abroad are subject to withholding at domestic statutory rates absent treaty relief. Algeria's treaty network, which includes conventions with most major trading partners and a number of African and Arab-League states, frequently reduces these rates, and treaty relief requires residence certification and compliance with beneficial-ownership and anti-abuse conditions embedded in the relevant treaty.

Where a services contract taxed under the 30% bundled withholding regime benefits from a reduced calculation base under domestic law or a treaty, Algerian VAT has applied separately to the contract since 2017, so payers must assess both the withholding and VAT position together rather than treating the 30% rate as a full and final discharge in every case. Domestic payments to resident service providers are also subject to advance withholding creditable against final CIT liability in specified circumstances.

5.1 General anti-abuse and hybrids

The Algerian tax administration applies a substance-over-form doctrine and general anti-abuse principles enabling it to disregard or recharacterise arrangements considered artificial or entered into principally to secure a tax advantage, particularly in cross-border restructurings and related-party financing. Algeria does not operate a codified hybrid-mismatch regime comparable to the EU's Anti-Tax-Avoidance Directive; anti-avoidance protection in this area instead relies on the territoriality rules for CIT scope, transfer pricing enforcement and restrictions on deductibility of payments to entities in non-cooperative or preferential-regime jurisdictions.

5.2 Exit taxation and disclosure

Algeria does not operate a formal exit tax regime for companies migrating their tax residence, though the territoriality-based scope of CIT (as clarified by the 2022 Finance Law amendments to Article 137 of the Tax Code) ensures that profits, products and income connected to Algerian-situated property or activities remain taxable in Algeria regardless of the residence of the owning entity where Algeria retains taxing rights under a treaty. Algeria has not adopted an EU-style DAC6 mandatory disclosure regime or a domestic public country-by-country reporting requirement, though multinational groups with an Algerian constituent entity may still be subject to group-level CbCR obligations imposed by their ultimate parent's home jurisdiction.

6.1 VAT

Value-added tax is levied at a standard rate of 19%, with a reduced rate of 9% applying to specified goods and services including certain foodstuffs, tourism-related services, computer equipment and specified construction materials, and a list of exemptions covering basic necessities, healthcare and specified exports. Registration is mandatory for businesses exceeding prescribed turnover thresholds, and monthly VAT returns (bordereau-avis de versement, G50) are filed alongside other self-assessed taxes by the 20th of the following month. Input VAT is recoverable against output VAT for taxable activities, subject to standard exclusions for passenger vehicles and certain entertainment-related expenses; since 2017, service contracts taxed under the bundled non-resident withholding regime have also become subject to VAT where the withholding base benefited from a rate reduction.

6.2 Transaction, payroll and other taxes

The Local Solidarity Tax (LST), introduced following the abolition of the tax on professional activity (TPA), is levied on the monthly turnover (excluding VAT) of specified activities: hydrocarbon pipeline transport at 3% and mining activities subject to personal or corporate income tax at 1.5%, with proceeds distributed to local authorities in each district where an establishment is located. There is no general local or provincial income tax in Algeria beyond the LST. Registration duties apply to real estate transfers and specified corporate transactions such as capital increases, mergers and business transfers, generally at proportional rates. A stamp duty applies to specified legal documents and instruments, and excise-type consumption duties apply to tobacco, alcohol and specified imported or luxury goods.

7.1 Filing, assessment and audit

The tax year is generally the calendar year. The annual CIT return is due by 30 April of the year following the tax year (or later for companies under specific tax regimes), accompanied by financial statements prepared under the Algerian financial accounting system. Large enterprises are managed by the Directorate of Large Enterprises (Direction des Grandes Entreprises), which applies enhanced monitoring and risk-based audit selection, while other taxpayers are managed by regional and local tax directorates. The general statute of limitations for tax reassessment is generally four years from the year in which the tax became due, extended where fraud or non-filing is established.

7.2 Rulings, appeals and penalties

Taxpayers may request administrative guidance from the Directorate General of Taxes on the treatment of specific transactions, though a formalised binding advance pricing agreement programme comparable to OECD peer jurisdictions is not broadly established. Disputed assessments can be challenged through an administrative pre-litigation appeal to the tax administration, escalating to the competent administrative courts for judicial review where the dispute is not resolved administratively. Late payment penalties and interest apply to underpaid tax and late filings, with substantially higher penalty rates where fraud or deliberate concealment is established by the tax administration.

Companies benefiting from investment-incentive exemptions should maintain documentation supporting continued eligibility, since incentive regimes are typically conditional on job-creation, investment-completion and export-repatriation commitments monitored over multi-year periods. Late instalments and underpayments attract interest calculated from the original due date.

9.1 Entity choice

The SARL (limited liability company, EURL for a single shareholder) is the most commonly used vehicle for foreign investment, offering limited liability with modest capital requirements; the SPA (joint-stock company) suits larger ventures, banking, insurance and activities where a board structure or capital-market access is contemplated. Foreign companies may also operate through a registered branch or liaison office for market representation, though liaison offices are generally restricted from generating local revenue. Historically, foreign investment in certain sectors was subject to a rule requiring majority Algerian ownership (the so-called 51/49 rule) before structuring.

9.2 Structuring and incentives

Manufacturing investors should structure to maximise access to the preferential 10% reinvested-profits rate and to investment-agency incentives (customs and VAT relief on capital goods, temporary CIT exemption in development regions). Groups with Algerian financing arrangements must observe the shareholder-loan interest deductibility cap referencing paid-up capital and the benchmarked interest rate ceiling, and should document related-party pricing to withstand transfer pricing scrutiny, particularly for cross-border service and royalty flows that interact with the bundled 30% non-resident withholding regime. Non-resident service providers should assess at the outset whether their Algerian engagement creates a treaty permanent establishment (subject to ordinary CIT) or falls within the withholding-only regime, as the compliance and effective-tax-rate consequences differ materially.

9.3 Worked effective-rate illustration

An Algerian manufacturing SARL earns EBITDA of DZD 500,000,000, books depreciation of DZD 80,000,000 and net interest expense of DZD 40,000,000 (within the shareholder-loan deductibility cap). Taxable profit is 500,000,000 − 80,000,000 − 40,000,000 = DZD 380,000,000. CIT at the manufacturing rate of 19% is DZD 72,200,000. If the company reinvests DZD 100,000,000 of that year's profit in qualifying manufacturing assets, the reinvested portion is instead taxed at the preferential 10% rate: 100,000,000 × 10% = DZD 10,000,000, with the remaining 280,000,000 taxed at 19% = DZD 53,200,000. Total CIT becomes 10,000,000 + 53,200,000 = DZD 63,200,000, an effective rate of 63,200,000 / 380,000,000 = 16.6% on taxable profit, compared with 19.0% without the reinvestment incentive.

9.4 Compliance

Expect statutory financial statements under the Algerian financial accounting system, monthly G50 self-assessed filings covering VAT, withholding and payroll taxes, annual CIT filing with supporting financial statements, transfer pricing documentation and declaration obligations above prescribed related-party transaction thresholds, and — for companies benefiting from investment incentives — ongoing monitoring and reporting to the investment agency on job-creation and investment-completion commitments. Foreign investors should also track evolving sector-specific foreign-ownership rules and repatriation requirements administered through the banking system.