Introduction

The Draft Finance Law for 2026 proposes a major overhaul of Algeria's fiscal and customs landscape, aimed at modernizing the administration, strengthening transparency, stimulating investment and supporting the economic transition. It represents a coordinated strategy making taxation a lever for competitiveness, innovation and social balance.

Key fiscal changes for businesses

• Several measures strengthen corporate taxation, particularly for non-resident companies, to counter optimization strategies and ensure equitable treatment with local businesses.
• Profits made by foreign branches are now considered distributed upon realization, and margins on equipment in "turnkey" contracts are incorporated into the taxable base.
• Permanent establishments must comply with the same declaration obligations as domestic companies and can no longer deduct fictitious internal charges.
• A tax reduction is introduced on dividends paid to resident natural persons (withholding tax reduced from 15% to 10%) to stimulate local investment and savings.

Digital transition and compliance obligations

• E-filing becomes the standard for payroll statements and other fiscal obligations, with the introduction of the National Identification Number.
• From 1 January 2027, cash register systems and accounting software will need to be certified compliant, requiring companies to audit and adapt their digital tools.

Sectoral developments and incentives

• The Draft Finance Law 2026 strengthens fiscal advantages for startups and incubators, allowing an extended exemption of up to 6 years for labelled startups and automatic renewal for high-performing incubators.
• Measures also incentivize green investments: deduction of expenditure on green hydrogen, reforestation and renewable energies, and vehicle registration tax exemption for electric/hybrid vehicles.
• Large companies exceeding 2 billion dinars in turnover must devote a minimum of 1% of taxable profit to R&D, under penalty of a compensatory tax.

Tax adjustments and procedures

• The reduced TVA rate (9%) is extended to the rehabilitation of older residential properties, health services, vocational training and bus transport.
• The Internal Consumption Tax (TIC) sees the share dedicated to export promotion double (from 5% to 10%).
• A new proportional duty (30%) on precious stones replaces the former TIC, with stricter oversight of sectors at risk of money laundering.
• Customs procedures are modernized, with a unified currency declaration threshold and an acceleration of port congestion reduction.
• Penalties for tax fraud are increased, particularly for complex offences.

Modernization and administrative simplification

• Simplification and centralization measures for tax filings are introduced, reducing "red tape" for taxpayers.
• The tax excess refund procedure is accelerated, and information on civil companies and legal structures must now be e-filed to strengthen transparency.

Specific and social provisions

• An exceptional arrangement allows legal entities and natural persons in an irregular situation to regularize their position without penalties until 31 December 2026.
• Revenue from vehicle registration taxes and other taxes is partly reallocated to the National Retirement Fund, supporting solidarity and the pension system.

Conclusion

The Draft Finance Law for 2026 constitutes an ambitious reform of the fiscal framework, structured around modernization, equity, support for innovation and ecological transition, while maintaining purchasing power and business competitiveness. The changes require strategic and operational adaptation from all economic players to navigate a reinforced fiscal environment resolutely oriented toward digitalization and compliance.