Algeria’s Finance Law for 2024

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A copy of the finance law for 2024 was published by Algeria’s Ministry of Finance. The copy was originally published in the official Gazette on 31st December 2023. The Finance Law for 2024 will remove the 1.5% tax on professional activity (TAP) and replace it with a new local solidarity tax (TLS). A few main points of the new TLS are as follows:

• The TLS is levied based on turnover derived in Algeria by taxpayers who carry out: the activity of transporting hydrocarbons by pipeline; and mining activities, the profits of which are subject to global income tax or corporate income tax;
• The TLS is levied on the total amount of turnover, excluding VAT;
• A 30% discount is granted on sales carried out under wholesale conditions by mining companies, paid for by a means of payment other than cash;
• In determining the turnover base subject to the TLS, the following are excluded:
  • transactions carried out between units of the same undertaking; and
  • transactions carried out between member companies belonging to the same group;
• The TLS rates are:
  • 3% on the activity of transporting hydrocarbons by pipeline; and
  • 1.5% on turnover from mining activities;
• A TLS declaration must be submitted annually at the same time as the standard annual tax return; and TLS payments are due every month by the 20th day of the month following the month in which the turnover is generated.

The new local solidarity tax (TLS) applies to businesses in Algeria engaged in transporting hydrocarbons through pipelines and mining activities subject to income tax. The tax is based on the total turnover (excluding VAT) of these businesses. Mining companies get a 30% discount on wholesale sales made through non-cash payments. The TLS doesn’t include transactions within the same company or between companies in the same group.

The tax rates are 3% for hydrocarbon transportation and 1.5% for mining activities. Businesses need to submit a TLS declaration annually along with their standard annual tax return. Payments for TLS are due every month. It must be made by the 20th day of the subsequent month, corresponding to the month when the turnover was generated.

Other measures include:

The expansion of the exemption from global income tax (IRG) and corporate income tax (IBS) for activities related to the collection and sale of raw milk. This exemption now also covers the single flat-rate tax (IFU), with more lenient conditions regarding the destination of consumption.

 An increase in the additional (supplementary) tax rates on the profits of tobacco manufacturing companies:

• 16%, where the integration rate is equal to or greater than 40% (for newly approved manufacturers, the 16% rate applies for the first three years regardless of integration); and 20%, where the integration rate is less than 40%.

The introduction of requirements for the online submission of customer detail statements by taxpayers under the authority of the Department of Large Enterprises;

The introduction of requirements for individuals subject to VAT are to report any exempt turnover in their monthly declarations;

• The criteria for setting up a tax payment plan have been relaxed, reducing the initial minimum payment from 10% to 5%. 
• There is now an exemption from the Energy Efficiency Tax (TEE) for locally made products meant for export.