The Finance Act 202 (LF2021), signed on 31 December 2020 works according to the government to “encourage investment and diversify the economy”.
I. The macroeconomic parameters are as follows:
II. Summary of the various measures adopted in the LF2021:
1)- IRG Comprehensive Income Taxes
(i)- Capital gains on shares, shares or related securities are included in a person’s overall income. (Article 2 of the Finance Act 2021 which amends Article 02 of CIDTA)
(ii)- Individuals engaged in exports of foreign exchange-generating goods and services are exempt from IRG global income tax.
This exemption is granted in proportion to the turnover achieved in foreign currencies.
To benefit from this, the taxpayer must submit to the tax authorities a document attesting to the payment of these revenues to a bank domiciled in Algeria. (Article 4 of the Finance Act 2021 amending Article 13 of the CIDTA)
(iii)- Introducing a limit on the exemption from total income tax of 70% of the basic salary on allowances related to special conditions of residence and segregation. (Article 8 of the Finance Act 2021 which amends Section 68 of CIDTA)
iv)- All moral and physical enterprises (employers) are obliged to submit a statement of wages on computer support at the level of tax services or by tele-declaration (Jiybayatic) no later than 30 April of each year. (Article 9 of the Finance Act 2021 which amends section 75 of CIDTA)
v)- The tax rate has increased from 5% to 15% for capital gains from the sale of built-up buildings (villa, apartment, etc.) or undedish (land…), with a reduction of around 5% per year, from the third (03) year of the date of ownership of the property sold, and this, within the limit of 50% of the taxable amount.
The sale of shares and shares and related securities carried out by individuals is subject to the same rate (15%) capital gains from the sale of built-up or unded buildings (Article 10 of the Finance Act 2021 amending Title VII and Articles 77, 78, 79 Title VII and the provisions of CiDTA Articles 77, 78, 79 and 80, supplemented and drafted with the creation of articles 77 bis and 79 bis of the same code)
(vi)- Section 12 of the Finance Act 2021 provides for an amendment to section 104 of CIDTA to clarify it in terms of the applicable rate of the IRG comprehensive income tax such as the introduction of a 15% tax-release IRG rate calculated on the amount of gross rents for unbuilt properties.
This rate is reduced to 10% for rentals for agricultural use.
vii)- When the instalments paid are higher than the IRG due for the year, the difference results in an excess payment that can be deducted from the next instalments or solicited, if necessary, in repayment. (Article 28 of the Finance Act 2021 which amends section 355 of CIDTA)
– Taxpayers making capital gains, are required to calculate and pay the tax owed themselves, to the tax collector of the location of the property, within a period of no more than thirty (30) days, from the date of the establishment of the deed of sale.
– Where the seller is not domiciled in Algeria, the liquidation and payment of the tax can be made by his duly authorized agent, with the receiver of the taxes of the head office of the company whose securities have been the subject of transfer.
2)- Single-tax IFU
(i)- Taxpayers marketing, exclusively, products with a regulated profit margin below the IFU rate, the taxable basis for that tax, is the overall profit margin for these products. (Article 27 of Finance Act 2021 which section 282 quater of CIDTA)
(ii)- New taxpayers under the IFU scheme will be required to file the final G-12 ter declaration by January 20 of the year following the start of their activity instead of December 31 of the year of the start of their activity. (Article 48 of the Finance Act 2021 which amends Article 3 bis of the Tax Procedure Code).
iii)- The delisting of a trade register may only take place after a declaration of cessation of activity covered by the tax services is submitted for all persons subject to the single IFU flat-rate scheme. (Article 88 of the Finance Act 2021)
3)- Real Plan / IBS Corporate Income Taxes
i)- When the instalments paid are higher than the IBS due for the year, the difference results in an excess payment that can be deducted from the next instalments or requested, if necessary, in repayment. (Article 29 of the Finance Act 2021 which amends section 356 of CIDTA)
(ii)- Taxpayers subject to the actual scheme are obliged to submit an annual summary statement with information to be extracted from the annual statement of results and ancillary statements by 20 May of each year, via tele-declaration (Jiybayatic). Failure to subscribe by tele-declaration of the annual summary statement, the late subscription and/or subscription of a statement containing indications not in accordance with those included in the annual statement of results, results in sanctions. Articles 16 and 21 of the Finance Act 2021 that introduce articles 151 bis and 192 bis respectively in the CIDTA – Article 5 of the Finance Act that amends Article 18 of the CIDTA)
(iii)- Taxpayers subject to the actual scheme are required to provide the services with it-based taxes (CD or USB stick) or by tele-reporting (Jiybayatic) a statement of supplier payments (see Table 12 of the tax bundle relating to commissions and brokerages, royalties, fees, subcontracting, miscellaneous remuneration and seat fees. (Article 18 of the Finance Act 2021 which amends section 176 of CIDTA)
iv)- The delisting of a trade register can only take place after a cease-and-desectivity report is submitted by the tax services for all persons subject to the actual scheme. (Article 88 of the Finance Act 2021)
v)- Companies whose common shares are listed on the stock exchange will benefit from a reduction in corporate income tax (IBS) equal to the opening rate of its share capital on the stock exchange, for a period of three (3) years, effective January 1, 2021. (Article 133 of the Finance Act 2021 which amends section 33 of the Finance Act 2014)
4)- Value added tax VAT / TAP Business Tax:
i)- Taxpayers who wish to take advantage of vat deductibility are now required to submit monthly (before the 20th of each month) or quarterly a report of suppliers including on COMPUTER support (CD or USB stick).
Here is the supplier’s information to mention:
(Article 42 of the Finance Act 2021, which amends section 29 of the “CTCA” revenue tax code)
(ii)- The granting of the VAT value-added tax refund is no longer conditional on the 1,000,000 DA limit for taxpayers who have ceased their activity and for partial debtors whose claims are annual. (Article 44 of the Finance Act 2021 which amends Article 50 bis CTCA)
iii)- Setting up the TELE statement for the status of customers (state 104). (Article 24 of the Finance 2021 Act, which amends Section 224 of CIDTA)
iv)- Components and raw materials imported or acquired locally by subcontractors and producers as part of their production activities are exempt from customs duties and value-added tax, for a period of two (2) years renewable. (Article 152 of finance 2021 amending Article 55 of the Supplementary Finance Act 2020)
v)- Electronic services relating to subscriptions to online documentary resources as well as subscriptions inherent in the operation of the Internet search network, management of IP addresses, the allocation of identifiers for serial publications and the contribution to the enrichment of the catalogue of scientific and technical information, carried out for the benefit of institutions under the Ministry of Higher Education and Scientific Research are exempt from VAT and the bank domicile tax. (Article 90 of the Finance Act 2021)
(vi)- Adjustment of the tax on occupational activity TAP with that of VAT (Article 23 of the Finance Act 2021 which amends Article 221 bis of the CIDTA)
5)- Label startup and incubator
i)- Companies with the “Startup” label are exempt from the Professional Activity Tax (TAP), Global Income Tax (IRG) or Corporate Income Tax (IBS) for four (4) years, from the date of obtaining the “Startup” label, with an additional year, in case of renewal.
They are also exempt from VAT and subject to 5% tariffs on acquired equipment that goes directly into the execution of their investment projects. (Article 86 of the Finance 2021 Act, which amends Article 33 of the Supplementary Finance Act 2020)
(ii)- Companies with the “incubator” label are exempt from the Occupational Activity Tax (TAP) and The Global Income Tax (IRG) or Corporate Income Tax (IBS) for a period of two (2) years, from the date of obtaining the label.
They are also exempt from VAT for acquired equipment that goes directly into the execution of their investment projects. (Article 87 of the Finance Act 2021)
(i)- Excluding the import of raw materials, products and goods for resale as they stand and those of a strategic nature, under the sectors defined in Article 50 of the Supplementary Finance Act 2020, which remain subject to a 51% resident national shareholding, any other activity producing goods and services, is open to foreign investment without any obligation of association with a local party.
Commercial companies with one or more foreign partners engaged in the import of raw materials, products and goods for resale as they stand, must comply with Rule 51%/49% by June 30, 2021, after this period, extracts from the trade register not in accordance with the provisions of the Act, become ineffective (Article 139 of the Finance Act 2021 which amends Article 49 of the Supplementary Finance Act 2020)
(ii)- Quarry and sand pit sectors are no longer considered strategic and are therefore excluded from the 51%-49% rule. (Article 152 of the Finance Act 2021 which amends Article 50 of the Supplementary Finance Act 2020)
i)- The payment schedule for a tax debt has been increased from 36 months to 60 months with a minimum down payment of 10%. (Article 71 of the Finance Act 2021 which amends Article 156 of the Code of Tax Procedures)
(ii)- The delisting of a trade register no longer requires the presentation of a tax certificate. (Article 77 of the Finance Act 2021 which repeals Article 39 of the Supplementary Finance Act 2009)
iii)- Introducing a container capital tax.
The downtime may not exceed 180 days. (Article 91 of the Finance Act 2021)
iv)- Public works, construction, irrigation and quarry equipment not manufactured in Algeria, and whose age does not exceed three (3) years, for their own account are permitted for customs clearance and commissioning. (Article 107 of the Finance Act 2021)
v)- The payment of imported products for sale as it stands will now be made through a so-called “term” payment instrument payable 45 days from the date the goods are shipped. (Article 118 of the Finance Act 2021)
(vi)- Any economic agent must provide the consumer with electronic payment instruments, to enable him, at his request, to pay the amount of his purchases through his bank or postal account, duly domiciled at the level of an approved bank or Algeria post.
They must comply with these provisions by December 31, 2021. (Article 146 of the Finance Act 2021)