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12.1. GAAR and General Anti-Avoidance Measures

The general anti-abuse rule provided for under Algerian tax law is the abuse of law (fraus legis) theory. Under the abuse of law theory, the tax administration is empowered to disregard any acts which are either a sham or are designed to create an artificial situation with the sole intention of benefitting from tax advantages or reducing the tax which would otherwise be due. Abuse of law cases may be submitted to a review board (composed of tax administration representatives, a chartered accountant and a notary public) whether at the initiative of the tax administration or at the request of the taxpayer. The tax administration is precluded from resorting to the abuse of law theory if the case was approved by it in the framework of a ruling procedure, or if the taxpayer had submitted a ruling request for the case but the tax administration failed to reply for longer than 4 months.

In addition to tax reassessments and penalties, the invocation of the abuse of law theory may result in the following additional sanctions:

  • Exclusion of the taxpayer from the express VAT refund (“franchise de TVA”) regime and any other advantageous tax regimes;
  • Possibility to reopen a closed tax audit;
  • Extension of the statute of limitations by 2 years; and
  • Listing of the taxpayer in the National Tax Delinquents Register


Domestic laws do not override tax treaties.