Algeria’s Ministry of Finance published the Finance Law 2025 in the Official Gazette on 26 December 2024, providing amendments for corporate taxation and VAT amongst various direct and indirect taxation policies.
Corporate income tax
The corporate tax exemption incentive granted to companies designated with “incubator” status is valid for a duration of two years from the date of receiving such status, and it may be extended for an additional two-year period.
The reduction of corporate tax by 50% for businesses situated in specific southern provinces (wilayas) aimed at encouraging investment in these regions has been extended for an additional five years. This extension applies to the provinces of Illizi, Tindouf, Adrar, Tamenghasset, Timimoun, Bordj Badji Mokhtar, In Salah, In Guezzam, and Djanet.
Tobacco manufacturers are liable for an additional Corporate Income Tax (CIT) at the following rates: 20% for those producing snuff and/or chewing tobacco, and 31% for manufacturers of tobacco products intended for smoking, which includes electronic cigarettes.
Enhanced benefits for R&D deductions have been extended: The deduction limit for R&D expenditures is established at 30% of taxable profits, with a maximum cap of DZD 200 million. These benefits are also applicable to expenses related to open innovation conducted in collaboration with companies designated as “start-ups” or “incubators”. A total cap of DZD 200 million is enforced if both company R&D expenses and open innovation expenses are incurred.
VAT
The reduced VAT rate of 9% applicable to services related to tourism activities has been extended until 31 December 2027.
A VAT exemption along with a reduced customs duty rate of 5% will be in effect until 31 December 2025 for the import of frozen white meat and coffee.
The VAT exemption for the import and sale of pulses and rice intended for human consumption, as well as for the sale of locally produced fresh fruits and vegetables, eggs, broiler chickens, and turkey, has been extended until 31 December 2025.
The procedure for VAT credit refunds has been revised, stipulating that applications for refunds must be submitted by the 20th day of the month following the quarter in which the VAT credit was accrued.
The advertising VAT rate has been increased from 1% to 2%.
Changes have also been made to the tax audit procedure, which now includes updated penalties:
- DZD 2 million for taxpayers who refuse to provide necessary information, books, and documents;
- DZD 50,000 for each day of delay in responding after the deadline (20 working days), with a cap of DZD 2 million;
- DZD 50,000 for each instance of partial, insufficient, or incomplete information or documentation, up to a maximum of DZD 2 million;
- DZD 2 million for the submission of false information; and
- Penalties will be doubled for repeated offenses, with a maximum limit of DZD 4 million.
