Temporary VAT rate cut and other updates on VAT rules
Algeria is temporarily cutting VAT on tourism services from 19% to the reduced rate of 9%. The rate will only apply until 31 December 2027.
Other changes effected in the 2025 Finance Law include:
Modification of the Chargeable Events for VAT
Under Algeria’s VAT regime, specific rules apply to the determination of chargeable events. For sales of residential, commercial, or professional buildings conducted by real estate developers during their operational activities, the chargeable event for VAT arises upon the partial or total collection of the sale price.
This rule also extends to sales of premises intended for industrial use. By linking the VAT liability to the collection of the price, the regime ensures that VAT is only charged in alignment with the actual financial transactions, thereby providing a measure of liquidity management for real estate developers.
Amendment of the VAT Credit Refund Procedure
Algeria has introduced changes to streamline the procedure for claiming VAT credit refunds. Applications for refunds must now be submitted no later than the 20th day of the month following the quarter in which the VAT credit is established. This timeline aims to standardise and expedite the refund process.
Furthermore, in cases of cessation of activity, refund applications must be filed concurrently with the submission of the cessation balance sheet. This dual submission ensures that businesses ceasing operations can reconcile their VAT obligations efficiently.
