Algeria has announced it will extend Value-Added Tax (VAT) for electronic services provided by non-resident companies, to the consumers in the country. The Algerian government has set the new VAT at a rate of 9% and it will be applied to a range of electronic services including but not limited to e-publishing, streaming services, online games and software.
Before January 2020, foreign companies providing digital services to customers in Algeria were not subject to charge VAT on their sales.
This step was taken in order to eradicate the advantage given to the foreign companies and ensure equality among the domestic providers and foreign providers. This new VAT measure may result in a change of pricing for the electronic services by the non-resident business, as companies are expected to use a competitive pricing model to keep their position in the market.
The VAT liability threshold does not apply to non-resident companies.
There will be a period of VAT exemption for start-ups, in order to provide them initial support which will help them to establish themselves in the market. The partially exempted companies may collect VAT credits for a period of 12 months.
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