International VAT Guides – Algeria

VAT rates in Algeria 

How much is VAT in Algeria? 

The Algeria VAT  system is based on two VAT rates, standard and reduced. The tax is imposed on the value added within the supply chain. The charge, collection, and reporting system is very similar to the one used in the EU. Input tax credits are claimable for most B2B transactions. 

The standard VAT rate is 19%.

VAT threshold in Algeria 

The VAT Algeria system has been significantly updated with the Law on E-Commerce, which came into force in May 2018. The primary goal of the legislator was to expand the VAT framework to online retailers and impose on them the same VAT rules as those in place for offline retailers.

The Law on E-Commerce introduces VAT collection liability for broad categories of transactions; however, it still lacks implementing Decrees or Regulations that would eliminate the uncertainty surrounding foreign online vendors and digital service providers. 

There is no VAT threshold in Algeria for non-resident digital platform providers or marketplaces. 

VAT Taxable Activities in Algeria

Types of taxable activities that trigger mandatory VAT registration:

• Supply of goods and services for consideration;
• Services performed abroad are enjoyed in the country
• Imports of goods and services; 
• Overseas sales of low-value goods to customers in Algeria
• Provision of digital services to customers in Algeria

Tax Representative in Algeria 

Non-resident digital service providers should appoint a local fiscal representative for their VAT obligations. 

Tax registration 

Simplified tax registration 

There is no simplified tax registration procedure for non-resident providers of digital services or e-commerce vendors. Overseas vendors need to appoint a local fiscal representative responsible for fulfilling VAT compliance requirements.

VAT on Electronically Supplied Services in Algeria 

Digital Services

The Algerian president enacted the so-called “Law on E-commerce” on May 10, 2018. The respective Law introduced tax provisions under which the VAT regime should function, concerning the supplies of goods or services provided through electronic channels. The framework stipulated a provisional framework for applying the VAT rules to both domestic and foreign providers of electronic services.

The Ministry of Finance and related state authorities were tasked with publishing additional Regulations, Decrees, and guidelines on how the VAT framework specifically designated for e-commerce transactions should operate. However, to this day, these “special” Regulations are missing. The respective state authorities haven’t developed, e.g., a simplified registration or reporting system for foreign providers of digital services. The lack of technical solutions and clear definitions (100%) on how B2C or B2B transactions involving foreign supplies of digital services should be handled for VAT is notable.

Taking into account the current tax framework and general provisions, non-resident providers of digital services should appoint a local tax representative. In cases where this hasn’t been done, the reverse charge mechanism should be used, and the liability for tax collection and remittance is shifted to the purchaser (whether a business or an individual). 

Then, these tax accountable persons should use self-assessment returns to remit tax to the tax authorities. 

How much is VAT in Algeria for Electronically Supplied Services?

 The VAT rate Algeria for most digital goods and services is 19%. However, this shouldn’t be followed blindly.

Taxable Digital Services in Algeria

The following types of digital services trigger mandatory VAT registration of non-resident providers:

• Audio and video streaming services 
• SaaS services
• E-books and publications 

Marketplace and Digital Platform Operators’ Rules

There are no special rules for overseas digital platforms. 

Invoicing Rules

For B2B transactions, issuing a tax invoice is mandatory.

The minimum requirements of the invoice are the following: 

General information 

• Date of invoice issuance 
• Consecutive invoice numbering
• Date and time of supply

Seller information

• Company name
• Full address(head office)
• Billing address is different from the company address
•  VAT number

Customer information

• Name 
• Full address
• VAT number(if applicable)

Fiscal Information

•  Unit price and total price excluding tax
•  Discounts, rebates, and refunds granted
•  VAT rate and amount of VAT. If several rates apply, the amount of VAT per rate must be stated.

Foreign Currency Invoice in Algeria  

In most cases, issuing an invoice in a foreign currency is permitted. 

Return 

Simplified Return 

There is no simplified return for non-resident providers of digital services.

VAT Return

Penalties for late reporting and omitted declarations 

The following penalties could follow the lack of compliance: 

• Late filing will incur a penalty ranging from 500 to 1,500 Algerian dinars.
• Late payment – When payment is made after the tax due date, a 10% penalty applies.

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