On 30 December 2018, Algeria’s Finance Bill 2019 was published in Official Gazette No. 79 and this Bill came into force as of 1 January 2019. The key measures introduced by the Finance Bill are following
-The bill clarifies provisions regarding deductibility of expenses incurred for technical, financial, and accounting assistance provided by a non-resident entity is limited to 20% of overhead and 5% of turnover of the paying company; and 7% of turnover for engineering advisory firms;
-Interest incurred in connection with loans granted by shareholders is deductible subject to the following conditions:
- interest rate should not exceed the average rate prescribed by the central bank of Algeria;
- share capital must be fully paid up; and
- shareholder loans cannot exceed 50% of the share capital value.
-Entities are required to submitting Transfer Pricing (TP) documentation may be demanded by the tax authorities to provide complementary documentation that includes tax rulings and Advance Pricing Agreements (APAs) obtained by the group in other jurisdictions, notably in the frame of an Audit;
-At the demand of tax inspectors, taxpayers must provide an accounting entry file containing the details of all accounting operations recorded during the audited fiscal years. This file is intended to facilitate the tax auditors verify the company’s books, without systematically using their own software, by standardizing the taxpayers’ books format;
-Now local and regional tax inspections are authorized for litigations concerning Tax Debt Collection disputes. Tax inspections can now also process the content of appeals related to Tax Debt Collection litigations;
-Taxpayers are required to authenticate prior to any payment, the fiscal and trade identification numbers of their third parties commercial partners;
-If taxpayers violating the dispositions of Article 6, taxpayers will be subject to fine up to 50% against each transaction;
-5% withholding tax applies to physical and legal sales operations via the internet or numerical platforms; and
-Exemption granted on dividends, capital gains, and revenue in connection with specific listed securities is extended to the end of 2023.
