The Lump Sum Tax (IFU) regime is a simplified tax regime designed to facilitate the declaration and payment of several taxes, by consolidating three major levies: the Professional Activity Tax (TAP), Value Added Tax (TVA), and the Global Income Tax (IRG). Introduced by article 282bis of the Code of Direct Taxes and Related Levies (CIDTA), the IFU applies primarily to small businesses and natural persons exercising certain activities. This regime aims to reduce administrative burdens and simplify taxation for small economic structures.

Eligibility conditions for IFU

The IFU regime is reserved for several categories of taxpayers whose annual revenue does not exceed 8 million Algerian dinars (DA). These taxpayers include:

1. Natural persons who sell goods and objects;
2. Natural persons engaged in industrial, commercial, or non-commercial activities;
3. Traditional and artisan art cooperatives;
4. Natural persons selling everyday consumer goods whose prices or margins are regulated;
5. Self-entrepreneurs whose annual revenue does not exceed 5 million DA;
6. Young promoters benefiting from support from national funds such as the National Youth Employment Support Fund or the National Microcredit Support Fund.

The IFU also applies to taxpayers operating multiple establishments, provided that the total cumulative revenue does not exceed 8 million DA.

Exclusions from the IFU regime

Certain activities are not eligible for the IFU, including:

• Real estate development and land subdivision;
• Importing goods for resale as-is;
• Activities of dealers, clinics, and private analysis laboratories;
• Classified restaurant and hotel activities;
• Precious metal recyclers and dealers of gold and platinum goods.

Tax rates

The tax rate under the IFU regime varies depending on the activity carried out:

• 5% for production and goods sales activities;
• 0.5% for self-entrepreneurs;
• 12% for commercial and service activities;
• 12% for non-commercial professions.

Mixed activities, combining several types of activities, are subject to a proportional rate based on the revenue generated by each activity.

Tax exemptions

The IFU regime provides for permanent and temporary exemptions to encourage certain economic initiatives:

• Permanent exemptions: associations for disabled persons, traditional craftsmen, and theater companies are permanently exempt.
• Temporary exemptions: young promoters benefiting from public assistance (ANADE, ANGEM, CNAC) enjoy a total IFU exemption for three years, extended to six years for activities located in areas to be developed. Furthermore, companies labeled as "startups" are exempt for four years.

Companies recycling paper and other waste benefit from a progressive exemption over five years.

Declaration obligations

Taxpayers subject to IFU must comply with a set of declaration obligations. They must file several declarations with the tax administration, including:

• Declaration of existence: To be filed within 30 days of the start of activity.
• Provisional IFU declaration: To be submitted each year before June 30 to estimate the projected revenue.
• Final IFU declaration: To be submitted before January 20 of the following year to declare the revenue actually earned.

Taxpayers who employ salaried workers must also file quarterly declarations and payments for IRG (Global Income Tax) on wages, as well as the apprenticeship tax and professional training levy.

Penalties for non-compliance

Failure to file declarations within the deadlines results in penalties. A delay of one month is penalized by a 10% surcharge, and a delay exceeding one month by a 20% surcharge. Taxpayers who do not maintain the required registers are liable for a flat-rate fine of 10,000 DA.

In the event of an annual revenue exceeding 8 million DA, the taxpayer is transferred to the actual tax regime starting from the following year.

IFU payment methods

Payment of IFU can be made in two ways:

1. Full payment: Upon filing the provisional declaration before June 30.
2. Installment payment: With a first payment of 50% before June 30, followed by two additional payments of 25% in September and December.

In the event of late payment, a 10% penalty is applied, and a 3% monthly surcharge is imposed for payments not settled within one month, up to a maximum of 25%.

Conclusion

The Lump Sum Tax (IFU) regime offers a simplified tax framework for small businesses, craftsmen, and self-entrepreneurs. While it presents advantages in terms of administrative simplification and reduced tax rates, it imposes strict obligations regarding declarations and payments. The exemptions, whether permanent or temporary, serve to encourage investment and entrepreneurship, particularly in strategic sectors such as crafts and recycling.