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12.4.4.1. Standard TP Documentation

According to Article 4 of the Decree of 12 April 2012, the transfer pricing documentation must contain:

Basic documentation of general information concerning the group

  • A general description of the activity performed, including changes that occurred during the fiscal year
  • A description of the organizational structure and the nature of the relations that link the foreign company and/or the Algerian company to the other Algerian company (organization chart, direct and indirect capital ties, voting rights, shareholders’ agreement, business flows, etc.)
  • A general description of the functions performed, risks incurred and assets of each related company
  • A general description of the group’s transfer pricing policy

Company-specific documentation

  • A description of the company, the activities it performs and the nature of the transactions it is engaged in, including the changes that have occurred during the FY
  • A description of the transactions performed with other related companies, including the nature of the flows of transaction and their amounts, including royalties — may be presented globally by transaction type
  • Copies of the statutory auditors’ annual reports and the financial statements for the FY concerned
  • A list of the main intangible assets held (patents, trademarks, trade names, know-how, etc.) in relation to the company
  • Copies of all agreements between the companies concerned
  • Financial information, overhead and administrative expenses, and research and development costs
  • Description and justification of the arm’s length nature of the transfer pricing method chosen (OECD standards)
  • For the documentary requirements, companies concerned may provide any other documentation that is likely to provide clarification to the tax administration

The entities concerned which are required to provide the information are large companies, which include:

  • De jure or de facto legal entities or groups of legal entities working in the field of hydrocarbon activities and their subsidiaries, as provided by law
  • Joint stock companies and partnerships who have opted for the tax regime for joint stock companies whose sales at the close of the financial year are greater than or equal to DZD100 million
  • De jure or de facto groups of companies, where the annual sales of any one of the member companies are greater than or equal to DZD100 million
  • Companies established in Algeria that are members of foreign groups (whatever Algerian tax regime applies)

Effective 1 January 2018, the DZD 100 million annual revenue threshold has been removed and all entities engaged in cross-border intra-group transaction are required to prepare the documentation. Submitted documentation should be in Arabic or French. Certified translations are also acceptable.

If requested documentation is not provided within 30 days or is insufficient, a penalty of 25% of the reassessed tax amount may be imposed. Further, failure to provide or providing incomplete TP documentation may attract penalty up to DZD 2 million (increased from DND 500,000 effective 1 January 2018).

Effective 1 January 2019, entities required to submit transfer pricing documentation may be requested by the tax authorities to provide complementary documentation that may include tax rulings and Advance Pricing Agreements obtained by the group in other jurisdictions.