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22 May 2018 Algeria eliminates exemption from VAT for services rendered for ships and aircrafts Algeria's Tax Directorate published, on 2 May 2018, Circular N°09/MF/DGI/DLRF/LF18 with respect to Article 30 of the 2018 Finance Act, which amended Article 9-14 of the Taxes on Turnover Code. Previously, services rendered for the direct benefit of foreign ships and aircrafts were exempt from Value Added Tax (VAT). Such services are now subject to VAT at the common rate of 19%. Bunkering operations remain exempt from VAT. Several companies previously operating in and out Algeria under a duty-free model, notably freights, couriers and airlines, will be impacted by this change. The VAT exemption may still be granted in the case of explicit conventional terms (e.g., a maritime or air transport agreement). Accordingly, as part of reciprocity, local ship and aircraft owners providing services for the benefit of national ships and aircraft, will receive the same treatment abroad, namely their operations will be subject to VAT. Ernst & Young Tax & Legal Algérie, Head of Africa desk – Maghreb and Francophone Africa and Head of Algeria Tax Practice, Alger Document ID: 2018-5679 |
