Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

January 22, 2020

Algeria issues Finance Act for 2020

On 30 December 2019, the Algerian Government enacted the Finance Act for 2020.

This Alert summarizes the key fiscal measures under the Act.


  • The removal of the local shareholding majority obligation (51/49 rule) for sectors considered as non-strategic to the national economy. This measure is pending. Implementing texts will be issued to clearly define the classification of sectors regarded as strategic. An official ad hoc commission is to be established during fiscal year (FY) 2020 for this purpose.
  • Authorization to allow foreign financing for projects with strategic and structuring interest to the national economy (prior to approval by the Finance Minister and the Finance and Budget Committee of the National People’s Assembly). Strategic and structuring projects, previously exclusively financed by the state budget, are now open to external financing from international development financial institutions such as the African Development Bank or the World Bank.


Direct taxes

  • Companies’ profits (earnings after tax) that were neither distributed nor subscribed to the share capital of the firm within a period of three years, will be considered as distributed income and shall be subject, in the same way as dividends, to a withholding taxation at a rate of 15%. This provision applies to profits realized from FY 2016 onwards.
  • Dividends paid to corporates will going forward be subject to a withholding tax at the rate of 15%. This taxation only applies to non-specifically exempted categories of profits.
  • The tax allowance applicable to royalties paid to a foreign provider for the use of software will be reduced from 80% to 30% (setting the effective rate of the withholding tax at 16.8%).


Taxes on turnover

  • Sales operations carried out by electronic means (via the internet) are now subject to value-added tax (VAT) at a reduced rate of 9%.
  • Elimination of the VAT liability threshold, which was previously set at DZD30 million (total turnover).
  • Introduction of a new VAT rate set at 0%. This rate is applicable to the acquisition of products, goods and services already benefiting from a VAT exemption. This disposition will at first only be applicable to companies registered for tax purposes at the level of the Large Companies Directorate, before being extended to all tax administrations.

Other taxes

  • The bank registration tax applicable to imports operation is increased from 0.3% to 0.5% for goods intended for resale as is, from 3% to 4% for services and 0% to 1% for SKD1 kits.
  • The rate of the solidarity contribution applicable to imports of goods released for consumption in Algeria is raised from 1% to 2%.


  1. SKD: “semi knocked-down” (a product that is exported in a set of parts that have been partly put together).

For additional information with respect to this Alert, please contact the following:

Ernst & Young Algérie, Head of Africa Desk – Maghreb and Francophone Africa and Head of Algeria Tax Practice, Alger
Ernst & Young Algérie, Business Tax Advisory, Alger



The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more