Since 2008 the government has introduced various restrictions on foreign investment in Algeria. Companies cannot engage in foreign trade activities unless 30% or more of their capital is held by resident Algerian nationals, while certain foreign investment is subject to a 51% shareholding requirement.
The Complementary Finance Act 2009 covers a range of fiscal measures, including amendments that reflect the government's new policies on the reduction of advantages for direct investment and on limitations on, and increased control over, transfers of funds. The changes particularly affect beneficiaries of tax privileges and parties involved in importing goods and services.
The Complementary Finance Act 2009 has significant implications for Algerian and foreign companies. Among other things, this new legislation affects the regime for building and civil engineering contractors, amends the tax consolidation regime, introduces an enhanced tax credit for research and development expenses and allows for revaluations resulting from the adoption of new accounting standards.
The 2009 Finance Act introduced several amendments that affect foreign entities, typically by either creating a heavier tax burden on foreign investment or introducing new procedural requirements. For example, profits transferred to a non-resident foreign company by its branch established in Algeria or an Algerian permanent establishment are considered distributed profits and are subject to a 15% withholding tax.
The Finance Act 2009 continues the harmonization of Moroccan tax legislation and aims to centralize all tax legislation into a single document, the General Tax Code. Among other changes, the act provides for the mandatory online filing of tax returns and a new obligation to provide information at the request of the tax authorities.