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Algerian Government Approves 2016 Budget Measures — Orbitax Tax News & Alerts

The Algerian Cabinet of Ministers has reportedly approved draft budget measures for 2016. The main measures include:

  • Mining companies will subject to the 23% reduced corporate income tax rate that was introduced along with an increased standard rate of 26% in the Additional Finance Law 2015 approved in July ({News-2015-07-29/A/6- previous coverage});
  • The deduction of R&D expenses, which is limited to 10% of taxable profits with a cap of DZD 100 million, will also require the submission of an expert report prepared by the relevant government body;
  • Supplies of gas oil, mobile Internet services, and electricity consumption above 125 kWh will be subject to the standard VAT rate of 17% instead of the reduced 7% rate;
  • Certain medicines that do not qualify under the public social security insurance scheme will no longer be VAT exempt;
  • Customs and excise duties incentives will be introduced for foreign investments in certain industrial sectors, and for imports of certain steel and IT products; and
  • The turnover tax on mobile telecom companies will be increased from 1% to 2%.

Subject to approval by parliament, the measures are to apply from 1 January 2016.