Algeria Corporate Tax Guide 2026

Overview — IBS in Algeria

Corporate tax in Algeria is governed by the Code des Impôts Directs and administered by the Direction Générale des Impôts (DGI). A company is tax resident in Algeria if it is incorporated under Algerian law or if its place of effective management is in Algeria. Resident companies are taxed on worldwide income; non-resident companies are taxed only on Algerian-source income. The standard tax year is the calendar year. Companies must register for corporate tax with the DGI and obtain a taxpayer identification number (NIF). Annual returns must be filed within 3 months of the end of the accounting period.

Standard Corporate Tax Rate — 26%

The standard IBS rate in Algeria is 26% of taxable profits for resident companies. Non-resident companies with a permanent establishment in Algeria are also taxed at 26% on Algerian-source income. Taxable profit is calculated as gross revenue less allowable deductions including operating expenses, depreciation, interest costs (subject to thin capitalisation rules), and losses carried forward. Losses may be carried forward for 4 years (extended to 7 years for certain production activities).

Reduced Rate — 19% for Production Activities

Companies engaged in production activities benefit from a reduced IBS rate of 19%. This includes manufacturing, industrial processing, and certain production-related services. To qualify, the company must be primarily engaged in production (at least 60% of revenue from production activities). The reduced rate applies to the entire taxable profit of qualifying companies. This incentive is designed to encourage industrial development and diversification of the Algerian economy.

Reduced Rate — 10% for Construction & Agriculture

Construction companies and agricultural enterprises benefit from an IBS rate of 10%. For construction companies, the reduced rate applies to profits from construction, installation, and related activities. For agricultural enterprises, the rate applies to profits from farming, livestock, and related agricultural activities. Qualifying agricultural enterprises must be registered with the Ministry of Agriculture. This preferential rate supports the government's policy of promoting construction and agricultural self-sufficiency.

Depreciation Rules

Algeria allows depreciation deductions for tax purposes using the straight-line method as the standard. Standard depreciation rates include: buildings 5% per annum, machinery and equipment 10–20%, computers 33.33%, motor vehicles 20%, and office furniture 10%. Accelerated depreciation is available for certain eligible assets, particularly in manufacturing and renewable energy sectors. Intangible assets such as patents and trademarks are amortised over their useful life. Goodwill is not amortised for tax purposes.

Tax Incentives

Algeria offers several tax incentives to encourage investment. Companies established in industrial zones or special economic zones may benefit from partial or full IBS exemptions for the first 3–5 years of operation. Investments in renewable energy, technology, and research & development qualify for additional tax credits. The Andi (Agence Nationale de Développement de l'Investissement) administers investment incentives, which may include customs duty exemptions, VAT deferrals, and reduced land lease rates.

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts a penalty of 10% of the tax due, increasing to 25% if beyond 30 days. Late payment attracts interest at 0.5% per month on the unpaid tax. Non-compliance may result in DGI enforcement actions including bank levies and asset seizure.

Can a foreign company operate through a branch in Algeria?

Yes, foreign companies may operate through a branch registered with the Centre National du Registre du Commerce (CNRC). The branch is taxed at the standard IBS rate of 26% on its Algerian-source profits.

Are dividends paid by an Algerian company subject to withholding tax?

Dividends paid to residents are subject to 15% withholding tax. Dividends paid to non-residents are subject to 15% WHT, subject to applicable double tax treaty relief.

Does Algeria have transfer pricing rules?

Yes, Algeria has transfer pricing rules consistent with OECD guidelines. Related-party transactions must be conducted at arm's length, and documentation must be maintained. Transactions exceeding DZD 200 million require specific transfer pricing documentation.

Disclaimer

This guide provides general information about Algerian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Algerian tax advisor or the Direction Générale des Impôts for advice specific to your situation. InvestmentKit does not provide tax advice.