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Through this Flash, we will present a non-exhaustive description of the main provisions contained in the final version of the Finance Act for 2021 (the "FA 2021"), published in the Official Journal n° 83 of December 31, 2020.
I- In terms of direct taxes and similar taxes
• Permanent exemption in terms of IRG for export operations of goods and services generating foreign currency carried out by natural persons (art.4 FA 2021)
In order to align with the situation of legal entities subject to corporate income tax (IBS), natural persons subject to global income tax (IRG) now benefit from a permanent exemption for export operations of goods and services generating foreign currency, provided to present a document attesting to the payment of the revenues related to these operations to a bank domiciled in Algeria.
• Establishment by remote declaration of a declaration obligation without payment for taxpayers making professional profits taxed according to the real profit regime (art.5 FA 2021)
The Article 5 of the FA 2021 sets up by way of remote declaration a declaration obligation (without payment) for taxpayers making professional profits taxed according to the real profit regime and which goes through the JIBAYATIC information system.
• Capping of the exemption of the area allowances (art.8 FA 2021)
The area allowances paid to employees to take into consideration special conditions of isolation and residence are no longer tax-free for their full amount. Indeed, the exempt portion must not exceed 70 % of the amount of the base salary.
• Obligation for employers to subscribe on computer support or by remote declaration their salary statements at the corresponding tax service (art.9 FA 2021)
Employers or debit holders established in Algeria, who pay salaries, wages, pensions, allowances, emoluments and life annuities will have to subscribe the annual salary statements (301 bis) at the corresponding tax service, in a dematerialized manner on computer support or by remote declaration.
• Introduction of the option of remote declaration of remunerations paid to third parties (Article 18 FA 2021)
From now on, the faculty is given to the taxpayers to subscribe the statements of payments of subcontracting, studies, hiring of materials, provision of personnel, rents of any kind and other remuneration of whatever nature, in dematerialized form or by way of electronic declaration.
• Obligation to electronically declare the annual summary statement (Articles 5,16 and 21 FA 2021)
Companies subject to the IBS will have to proceed with the electronic declaration, by May 20, 2021 at the latest, of the annual summary statement including information to be extracted from the annual declaration of results and appended statements. Failing that, they will be liable to a tax fine of one million of dinars, increased by 100 % if they do not subscribe the summary report within 30 days following the receipt of the formal notice. In the event of different data from those mentioned in the annual declaration of results, taxpayers will be liable to a tax fine of 10,000 dinars per non-compliant entered field, without that the total of the fine exceeds 100,000 dinars.
• Clarification of the modalities of declaration and payment of the tax due on capital gains on the sale of shares and company parts (art.14 FA 2020)
From now on, companies that do not have a permanent professional establishment in Algeria and realize capital gains from the sale of shares and parts are required to calculate and pay the tax themselves within 30 days, starting from the date of the sale transaction . The payment of the tax is made to the fund of the tax collector of the place of the head office.
• Possibility granted to taxpayers to request reimbursement of the excess payment in terms of IBS and IRG (art.28 and 29 FA2021)
Taxpayers with overpayments of IBS and IRG noticed when liquidating the balance of corporate income tax (IBS) or global income tax (IRG) can request reimbursement of the overpayment IBS or IRG, either this excess relates to a loss result, or a profit which leads to an amount of IBS or IRG due less than the sum of the instalments payments.
II- In terms of taxes of registration
• Solidarity of the parties to the act for the sale of shares, parts or similar securities (art.31 FA 2021)
In the same way as for transfers for payment of buildings, real estate rights, business assets and customers, the duties and taxes payable on insufficient prices or valuation, noted in matters of sale of shares, parts or similar securities, are due jointly and severally by the seller and the new purchaser.
III- In terms of taxes on turnover
• Reduced VAT rate on the sale of recovered waste (article 40 FA 2021)
The Article 40 of the FA 2021 provides for a reduced VAT rate of 9% on sales transactions relating to recovered waste (aluminum, iron, wood, glass, cardboard, plastic).
• Reintroduction of the statement of VAT deduction (art.42 FA 2021)
After being abolished, the obligation to attach the VAT deduction statement to the monthly G50 declarations has been reintroduced.
IV- Tax procedures
• Extension of on-site verification deadlines in the event of force majeure and re-supervision of the arbitration procedure (Articles 50, 51 and 52 FA 2021)
The duration of the on-site verification is extended in the event of force majeure duly noted, in accordance with the provisions of Article 127 of the Civil Code, in particular in exceptional periods (current Covid-19 health situation) preventing tax administration officials from operating their on-the-spot checks.
In another register, a stricter formalism is required to frame the adversarial debate.
Thus, the taxpayer will have a preparation period of at least 10 days, starting from the date of receipt of the administrative summon. He will be given at the end of the arbitration meeting, a copy of the minute with the obligation to indicate in a clear and unambiguous manner, the arbitration position.
• Strengthening of legal guarantees granted to taxpayers subject to the valuation control procedure for contracts relating to the sale of shares, company parts or equity securities (article 55 FA 2021)
In this context, it is planned to grant more legal guarantees to taxpayers subject to the valuation control procedure in the event of insufficient prices and valuations.
Among these guarantees, the law provides the sending or delivery, against acknowledgment of receipt, of an assessment control notice. A minimum period of 10 days starting from the date of receipt of this notice must be granted to the taxpayer before sending the assessment notification which must be sufficiently motivated and detailed. He has a period of 30 days, starting from the date of receipt of the assessment notification, to send his response and before the expiry of this period, the verified taxpayer can provide additional information. He has the possibility to request the opinion of the Wilaya conciliation commission, within 30 days from the date of receipt of the final notification, by hand or by recommended sending with acknowledgment of receipt. He reserves the right to contest this notification before the competent courts.
• Extension of the period of payment deadlines (article 71 FA 2021)
From now on, it is possible to envisage a payment schedule for the tax debt over a maximum period of 60 months instead of 36 months previously, with a minimum initial payment of 10% of the amount of the tax debt.
V- Various tax provisions
• Cancellation of collection penalties (Art.75 FA 2021)
Taxpayers who pay, at the latest, by December 31, 2021, the full principal of their tax debts due on December 31, 2020, in a single installment, are exempt from payment of collection penalties.
• Cancellation from the commercial register (Art. 88 FA 2021)
Under Article 88 of the FA 2021, cancellation from the trade register can only take place after presentation of a document approved by the tax authorities proving the filing of the following documents:
- a report of cessation of activity approved by the tax services, for persons subject to the real regime;
- a declaration of cessation of activity approved by the tax services, for persons subject to the single flat-rate tax regime.