Algeria VAT Regime Amendments 2025: Key Changes and Compliance Tips

January 13, 2025

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On December 26, 2024, the Algerian Ministry of Finance published the Finance Law 2025, which amended specific provisions regarding corporate tax and value-added tax (VAT) and changes related to direct and indirect tax policies.

Amendments to the VAT regime include some new rules regarding exempting goods amortizable in the gas and electricity sector, VAT on imports, VAT on sales of locally produced goods, VAT on services, VAT refunds, and tax audit procedures and penalties.

Impact on Taxable Persons

One of the changes is extending a reduced VAT rate of 9% for services in the tourism sector until December 31, 2027. Until this measure was introduced, a standard VAT rate of 19% was applied to these services.

Businesses and consumers may also feel relief from the decision to apply VAT exemption and a reduced customs duty rate of 5% to frozen white meat and coffee imports. This measure will remain in place until December 31, 2025.

An additional measure that will be in effect until December 31 this year is the VAT exemption for importing and selling pulses and rice for human consumption and sale of locally produced fresh fruits, vegetables, eggs, broiler chickens, and turkey.

Under the revised procedure for VAT credit refunds, taxable persons must apply for refunds by the 20th day of the month following the quarter in which the credit was accrued.

Penalties for non-compliance with tax rules have also been amended. A penalty of DZD 2 million (around USD 14,700) is defined for those who refuse to provide the necessary information, records, books, and documents in the tax audit procedure.

For late responses in the tax audit procedure, a penalty of DZD 50,000 (around USD 370) is defined for each day of delay after the deadline, which is set at 20 working days. However, this penalty can be a maximum of DZD 2 million.

Similarly, a penalty of DZD 50,000 is defined for each piece of information only partially provided upon the request of the Tax Authority or when taxable persons provide insufficient or incomplete information. The maximum penalty is set at DZD 2 million. Submitting false information will result in a penalty of DZD 2 million.

If repeated offenses occur, penalties may be doubled, and the maximum is DZD 4 million (USD 29,500).

Conclusion

From the amendments that the Algerian government adopted and presented through the Financial Law 2025, it is clear that the aim is to foster economic growth, promote specific sectors such as tourism and agriculture, and ensure compliance with tax obligations.

Additionally, newly adopted and extended measures aim to provide to businesses and consumers, particularly regarding essential goods. Taxable persons should stay informed, monitor, and comply with updates to benefit from these measures and avoid severe penalties.

Source: Finance Law 2025

What are the key VAT changes in Algeria under the Finance Law 2025?

The Finance Law 2025 introduces several VAT amendments, including extended reduced VAT rates for the tourism sector, exemptions on certain imports and locally produced goods, revised VAT refund procedures, and stricter penalties for non-compliance during tax audits.

Which goods and services benefit from VAT exemptions in Algeria in 2025?

Goods exempt from VAT include frozen white meat, coffee imports, pulses, rice, fresh fruits, vegetables, eggs, broiler chickens, and turkey. These exemptions aim to support essential goods and will remain in effect until December 31, 2025.

How has the VAT rate for the tourism sector changed in Algeria?

The reduced VAT rate of 9% for tourism services, initially temporary, has been extended until December 31, 2027, replacing the standard 19% rate to promote the tourism industry.

What are the new VAT refund procedures in Algeria?

Taxable persons must apply for VAT refunds by the 20th day of the month following the quarter in which the credit was accrued. This streamlined procedure helps improve refund efficiency.

What penalties apply for non-compliance with Algerian VAT rules?

Penalties include DZD 2 million (around USD 14,700) for refusing to provide necessary documents during a tax audit. Late responses incur DZD 50,000 per day, up to DZD 2 million. Providing false or incomplete information may also result in a penalty of DZD 2 million. Repeated offenses could double these amounts, with a maximum penalty of DZD 4 million.

How long will the reduced VAT rates and exemptions be in effect in Algeria?

The reduced 9% VAT rate for the tourism sector is valid until December 31, 2027. Exemptions for certain goods, like frozen meat, coffee, and agricultural products, are effective until December 31, 2025.

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