NTA issued a circular granting five-year tax exemptions for sovereign Sukuk to promote Islamic finance.
Algeria’s National Tax Administration (NTA) issued Circular No. 65 MF/OGV F.2025 on 29 October 2025, establishing the tax exemption framework for sovereign Sukuk (Islamic bonds) to support the growth of Islamic finance and the development of Sharia-compliant public financing instruments.
Five-Year Tax Relief for Investors
Under the new regime, sovereign Sukuk issued by the Public Treasury or traded on an organised market with a maturity of at least five years will benefit from a five-year tax exemption starting 1 January 2025.
The relief covers several key taxes:
- Corporate Profits Tax (IBS): Corporate investors are exempt from IBS on income earned from sovereign Sukuk during the exemption period.
- Global Income Tax (IRG): Individuals enjoy full exemption from IRG on revenues generated by the Sukuk.
- Registration Duties (DE): Transactions involving sovereign Sukuk are exempt from registration duties.
- Land Publicity Tax (TPF): Exemption applies to transfers or registration of rights when the Sukuk are backed by real estate or land assets.
Issuance and Sharia Oversight
The issuance procedures for sovereign Sukuk were defined in a decree dated 1 June 2025. The Public Treasury is the authorised issuer, representing the value of usufruct rights on State-owned assets. It may, however, delegate issuance to another entity.
Each Sukuk issue requires approval from the Minister of Finance and a certificate of Sharia compliance from the High Islamic Council (Haut Conseil Islamique) before any public subscription.
The Sukuk may be backed by tangible assets, property rights, or infrastructure projects and must be issued in nominative form.
Types of Sovereign Sukuk
The circular outlines several approved Sukuk models:
- Sukuk Ijarah: Linked to ownership or usufruct of tangible assets, with returns derived from rental payments.
- Sukuk Mousharaka: Represent participation in joint projects, sharing profits and losses.
- Sukuk Moudaraba: Based on profit-sharing from commercial ventures managed by a designated operator.
- Sukuk Istisna’a: Used to finance the construction or manufacture of infrastructure or equipment.
- Sukuk Wakala: Involves delegating fund management to an authorised agent for investment purposes.
The tax exemptions are effective starting 1 January 2025.
