Finance Law 2022, fundamental aspects

18 enero, 2022
Loi de finances 2022, aspects fondamentaux
18 enero, 2022
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Finance Law 2022, fundamental aspects

Published in the «Journal Officiel» on December 30, 2021 as Law No. 21-16, the finance law 2022, established with an estimate of the price of a barrel of oil of 45/50 USD, foresees a deficit of 42.35%, for a total expenditure of 9.86 BBDZD (60,000 MM€) and revenues of 5.68 BBDZD. Of the total expenditure, 64% is allocated to operation, and the rest to equipment, of which 2.71 MMDZD will be investment (about € 16,500 MM)

In tax matters, the following aspects stand out:

  1. IBS corporate income tax:
  2. Extension of the field of application (Art. 137 CID – Art. 34 LF2022):
    1. To the profits generated in Algeria by foreign companies generated by transactions linked to the assets they own in Algeria,
    2. To the benefits attributable in Algeria by some tax agreement.
  3. Valuation of operations titled in foreign currency in the determination of the tax result subject to taxation (Art. 140 CID – Art. 41 LF2022): The exchange rate of the day of its realization will be applied. Foreign exchange debts and rights will be assessed at the end of each financial year at the last exchange rate of the year.
  4. Revision of the thresholds for the deduction of charges (Art. 141 and 169 CID – Art. 43 and 50 LF2022):
    1. Learning and Training Fee, passes to NON-DEDUCTIBLE,
    2. «Low value» items go from 30 to 60,000 DA
    3. Annual depreciation of passenger cars: from 1 to 3,000,000 DA
    4. Advertising gifts: from 500 to 1,000 DA/ud limit 500,000 DA
    5. Humanitarian donations, go from 4 to 2,000,000 DA max.
    6. Miscellaneous expenses:
      1. Accommodation, maximum 200,000 DA
      2. Maintenance of vehicles maximum 20,000 DA/vehicle
    7. Contractual penalties paid to non-taxpayers in Algeria are not deductible.
  5. IBS preferential rate device (Art. 142 CID – Art. 44 LF2022): Production companies may benefit from a reduced rate of IBS (10%) in case of reinvestment, either by purchase of assets or by acquisition of another company in more than 90% of its capital, under conditions (Art. 142 Bis CID, Art. 44 LF2022).
  6. Exclusion of IBS (Art. 136 CID – Art. 33 LF2022) for «Groupements«, whose results will be imputed to each of the members individually.
  7. IBS in case of multiactivity (Art. 138 CID – Art. 37 LF2022) the IBS rate of the main activity will no longer apply, but that of each activity will be applied in proportion to its participation in the turnover).
  8. Application (Art. 150 CID – Art. 46 LF2022) in case of multiactivity with different IBS rates, companies will determine the taxable base according to the share-part of each activity in the turnover. Therefore, the keeping of separate accounts is mandatory.
  9. Professional Activity Rate (TAP).

Modification of the field of application (Art. 220 and 222 CID – Art. 59 LF2022)

  • Production companies are excluded from its application.
  • The calculation of the fee: it is reduced by 25% from 2% to 1.5%.
  • The TAP of 3% is maintained for the activity of transporting hydrocarbons by pipeline.
  1. Vocational Training and Apprenticeship Fee (TFPA).

Restructuring and codification (Art. 56 LF2022):

  1. Field of application: contributors in Algeria not public institutions.
  2. Excluding companies with < 20 employees.
  3. Base: Gross salary before deductions for CNAS/CACOBATPH and IRG.
  4. Determination of the rate, deductions of training expenses actually made and justified.
  5. Periodicity of the declaration: deadline, 20 February of the following year.
  6. Modality of new provisions: They will be defined by disposition of the Mº competent in matters of Vocational Training and Education.
  7. Global Income Tax (IRG).
  1. Determination (Art. 104 CID – Art. 31 LF2022):
    1. The principle of globality of taxation is reinstated, which affects all the income of the person, except those exempted.
    2. Progressivity the non-imputable amount goes from 10 to 20,000 DA:
      1. Revenue < to 240,000 DZD 0%
      2. De 240.001 a 480.000 DZD 23 %
  • De 480.001 a 960.000 DZD 27 %
  • De 960.001 a 1.920.000 DZD 30 %
  • De 1.920.001 a 3.840.000 DZD 33 %
  • Above 3,840,001 DZD 35 %
  1. Increasein the amount linked to food (Art. 71 CID – Art. 25 LF2022) when there is a lack of supporting documents, it goes from 50 to 400 DA.
  2. Update of the basis for calculating the capital gain from the transfer of shares and shares for consideration (Art. 79 Bis CID – Art. 25 LF2022). It shall be calculated by the difference between the market value at the time of the transfer and the acquisition value, deducted from the justified costs.
  3. Dividends distributed (Art. 87 Bis CID – Art. 30, 45 and 46 LF2022), hereinafter taxed in matters of WRI or IBS.
  4. Contracts with foreign persons.

Obligations of foreign companies without professional installation in Algeria (Art. 162 and 194 CID – Art. 49 and 54 LF2022)

  • Companies must deposit a copy of the contract and addenda, non-compliance will result in a penalty of 500,000 DA
  • Penalty of 2% on the turnover, if the annual declaration of result is not deposited, status of customers provided for in Art. 224-1 of cidta.
  1. Miscellaneous provisions.
  2. Increase in the rate applied to the first issuance of the job title to foreigners (Art. 142 Bis CDT – Art. 88 LF2022), goes from 10 to 20,000 DZD. For citizens spouses of Algerians, it goes from 1,000 to 2,000 DA. The renewal of these titles will increase their rate by 100%
  3. (Art. 113 FL2022) import and resale: payment on account of 2% of the total value of the goods, attributable at the time of calculating the IBS, which will be settled according to VAT.
  4. Startups exempt from taxes in the LF2020 will also be exempt from taxes in the LF2022.
  5. Tax on tobacco products (Art 68/36 LF2018 – Art. 116/118 LF2022) the overall rate (forfataria) rises from 3 to 5%, the additional rate rises from 32 to 37 DZD.

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