2026 Finance Law: VAT Rate Extensions, digital filing and tougher penalties
- Algeria extends the reduced 9% VAT rate to housing renovation, healthcare services, public transport, vocational training and aquaculture inputs
- Energy infrastructure projects benefit from a new VAT exemption
- VAT penalties increase sharply, alongside mandatory electronic filing where the Jibayatic system is in use
- A time-limited voluntary tax regularisation scheme allows undeclared income to be disclosed at a flat 8% rate
Algeria’s 2026 Finance Law, published in the Official Gazette on 31 December 2025, introduces a series of VAT measures that combine targeted economic relief with stronger enforcement and further tax digitalisation. Most measures apply from 1 January 2026.
Reduced VAT Rate Extended to Priority Sectors
The scope of Algeria’s reduced 9% VAT rate has been expanded to support socially and economically sensitive activities. Newly covered supplies include:
- Rehabilitation, upgrading and servicing works on older residential buildings
- Catering and accommodation services provided by healthcare institutions
- Vocational training services offered by state-approved providers, including related catering and accommodation
- Public passenger transport by bus, aligning its VAT treatment with rail transport
- The import of raw materials for aquaculture feed and the domestic sale of locally produced feed
VAT Exemption for Energy Infrastructure Investments
A new VAT exemption applies to goods, materials, works and services supplied under contracts relating exclusively to infrastructure and investment projects for:
- Electricity production, transport and distribution
- Natural gas transport, distribution and marketing via pipelines
This exemption supports Algeria’s energy strategy by lowering indirect tax costs on qualifying infrastructure projects.
Sharp Increase in VAT Penalties
The 2026 Finance Law significantly increases VAT-related penalties, signalling a tougher enforcement stance:
- A general penalty of DZD 25,000 for VAT violations (previously DZD 500–2,500)
- A penalty of DZD 100,000 for fraudulent actions (previously DZD 1,000–5,000)
The scale of these increases materially raises the risk profile of non-compliance.
Electronic VAT Filing via Jibayatic
Taxpayers subject to the real profit tax regime or the simplified tax regime must now file their tax declarations electronically where their local tax office operates the Jibayatic information system.
This marks another step in Algeria’s move towards digital tax administration, reinforcing the need for structured, system-ready VAT data rather than manual or spreadsheet-based processes.
Voluntary Tax Regularisation Scheme
A temporary voluntary tax regularisation scheme has been introduced for both individuals and companies. Under the scheme:
- Previously undeclared income can be regularised by paying a flat 8% tax
- No penalties or criminal prosecution apply
- The scheme is available until 31 December 2026
As more jurisdictions combine VAT policy reform with digital enforcement, maintaining consistent VAT determination and reporting across borders increasingly requires a single, rules-driven tax engine rather than fragmented local solutions.
