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5.4. Tax Base for Non-Resident Entities

A foreign company with a fixed base or other taxable presence in Algeria is subject to tax therein on income arising from the Algerian trade or business. The tax base is determined for resident companies. However, unless a tax treaty provides otherwise, head office overhead expenses charged to the Algerian business are deductible only if justified, documented, relevant to the activity of the Algerian business, not duplicated (i.e., not otherwise expensed by the Algerian business itself), and not in excess of 1% of its turnover.

Effective 1 January 2022, profits and income earned in Algeria by foreign companies through operations related to property owned by such foreign companies in Algeria are also taxable in Algeria.

Non-residents without a taxable presence in Algeria are subject to tax by way of final withholding on defined Algerian-source income.

Procurement and/or services contracts performed in Algeria without a taxable presence therein are normally subject to a final withholding tax on their gross amount, excluding any amounts concerning the sale of equipment to the extent the sale and services amounts are distinctly invoiced. The contract must be registered with the tax authorities, and there is a pre-withholding of 0.5% of the amount of the contract to be operated by the Algerian partner. However, the non-resident may opt to be taxed on a net basis on registered procurement and/or services contracts.