Introduces new tax incentives for reinvestment in manufacturing

30 Dec 2021

On 30 December 2021, the Algerian Government enacted the Finance Act for 2022 (the Act).The Act provides that manufacturing companies can benefit from a reduced CIT rate set at 10% when reinvestments are made during the same fiscal year. These reinvestments can take the form of: (i) the acquisition of production equipment; and (ii) the acquisition of shares or similar securities up to at least 90% in the capital of another production company (goods, works or services).

Further, for Corporate Income Tax purposes, the territoriality concept has been clarified and extended, by including: (i) the profits, products and income made in Algeria by foreign (non-resident) companies and generated by operations relating to assets owned in Algeria; and (ii) profits for which the taxation right is attributed to Algeria by virtue of a tax treaty.

Finally, the Act now specifies that consortiums are not directly subject to corporate income tax.