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Taxation in Algeria

The most important sources of government revenue have been oil and gas royalties. Algeria's tax system has been streamlined through the replacement of a number of different taxes by a value-added tax, a personal income tax and a corporate profits tax. The corporate income tax rate is 30% + 3% applicable on the wage bill of the company. The tax rate on Professional Activity (TAP) is 2.55% applicable on the turnover, except VAT. Capital gains are taxed in Algeria at the rate of 30%. Foreign branches are taxed on profits made in Algeria.

Many fiscal advantages have been granted to developing and expanding industries, especially to private investment. For established domestic industry and commerce there is a tax on production (a single tax that was passed on to the consumer) and a tax on industrial and commercial activities.

Algeria's 1993 investment code offered foreign investment companies a three-year exemption from VAT, a property tax abatement, lower customs duties, and a two to five year exemption from corporate income taxes. The tax break was meant to stimulate investment in Algeria's export market.

The rate of the income tax is constituted with a progressive table of seven brackets. The fiscal year begins on January 1st and ends on December 31st of the same year.

Personal Income Tax Schedule for 2003:

• Up to 60,000: 0%
• From 60,000-180,000: 10%
• From 180,001-360,000: 20%
• From 360,000-1,080,000: 30%
• From 1,080,000-3,240,000: 35%
• From 3,240,000-9,999,999: 40%

After 1993, foreign workers whose monthly salaries exceeded US$1,333 per month paid a 20% income tax, instead of one up to 70%.





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