Algeria has introduced a number of tax incentives for investments related to the production of goods or supply of services. The incentives are introduced through amendments to the Investment Act published in the Official Gazette on 3 August 2016 and apply for investments in newly established projects (new entities), as well as investments to extend or renovate existing projects. The available incentives are broken down into the investment phase and the operational phase of a project as follows.
- Customs duties exemption on equipment needed for the investment project;
- Value added tax (VAT) exemption on goods and services acquired for the project;
- Registration duties exemption on immovable property acquired for the project, plus a 10-year property tax exemption beginning from the date the immovable property is acquired;
- Registration duties exemption on documentation related to the establishment of a project and capital increases; and
- Possible infrastructure cost sharing with the government for investments in developing areas.
- 3-year corporate tax and vocational activities tax holiday beginning from the documented date operations begin;
- Possible extension up to a 5-year tax holiday if the project creates more than 100 permanent jobs in the first year of operation; and
- Possible extension up to a 10-year tax holiday plus customs duties and VAT relief for projects considered to have a national interest where an investment agreement has been signed with the government.
In order to qualify, an investor must be registered with the National Agency of Investment Development. If an investor would be eligible for other incentives, the investor may choose the most beneficial incentive for a particular tax type. If amendments are made to the incentives in the future, the amendments will not apply retroactively, unless an investor elects for retroactive application.