|Algeria Introduces Tax Ruling Regime|
Algeria introduced a tax ruling regime in Executive Order No.12-334, dated 8 September 2012.
The regime, which is designed to provide greater certainty for taxpayers and enhanced monitoring capabilities for the tax administration, allows a taxpayer to request a ruling that sets out the formal position of the tax administration on the taxpayer's particular situation.
While the scope of the ruling regime is broad, local enterprises with a turnover of less than DZD 100 million and foreign enterprises planning to invest in Algeria, but that are not yet registered in Algeria, are excluded. The ruling procedure is specifically available to:
• Algerian companies belonging to groups with foreign members, and foreign companies, even when such companies have no permanent business premises in Algeria;
• Companies that are members of legal or de facto groups of companies when the annual turnover of at least one of the group members is DZD 100 million or more;
• Algerian corporations and partnerships whose annual turnover is DZD 100 million or more; and
• Companies engaged in the hydrocarbon sector.
The decree does not list the taxes with respect to which a ruling may be requested. Although this is not made explicit in the Executive Order, it would appear that customs and social security matters are not included within the scope of the ruling regime, because these matters are not within the purview of Directorate of Large Enterprises (DGE). However, it will be necessary to see how the tax administration applies the regime in practice to confirm that this is the case.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on November 1, 2012