2024 Finance Plan Introduces Exciting VAT Measures: Enhanced Reporting and Exemptions

"Amendment to Article 76-1 of Tax Code: Revised VAT Regulations for Businesses"

Article 39 of the Finance Bill 2024 proposes a modification to Article 76-1 of the Tax Code. The revised article states that individuals or businesses conducting transactions subject to value-added tax (VAT) must submit a statement to the tax collector of the jurisdiction where their headquarters or main establishment is located. This statement should be submitted within twenty days following the calendar month and should include the total amount of business conducted for all taxable or exempted operations. It is important to note that the payment of VAT may not necessarily coincide with the declaration submission date, and late payment will result in penalties as outlined in Article 140 of the Tax Code.

This modification aims to establish the obligation to report VAT-exempted turnover when filing the monthly declaration with the competent tax collector. The purpose is to facilitate the tracking of exempted operations and enable the assessment of fiscal expenditures. By implementing this measure, the government aims to ensure transparency and accountability in tax reporting and collection.

Moving on to Article 65, until December 31, 2024, certain locally produced food items are exempt from VAT. These include fresh fruits, fresh vegetables, consumption eggs, chicken meat, turkey, as well as specific products intended for human consumption such as various types of peas, chickpeas, beans, lentils, fava beans, other dried pod vegetables, and different types of rice. The objective of this measure is to exempt these essential food items from VAT at both the production and retail stages. This exemption is intended to preserve citizens’ purchasing power and enhance the country’s food security, which is considered a priority for the government due to its direct impact on national sovereignty.

The Finance Bill 2024 also proposes an extension of the VAT exemption for various services related to internet access and web-related activities. This extension modifies Article 32 of Ordinance No. 10-01 from August 26, 2010, which pertains to the complementary finance law for 2010. The exemption will now be extended until December 31, 2025.

The services included in this extension encompass fixed internet access services, bandwidth rental for fixed internet services, hosting of web servers in data centers in Algeria and .DZ domains, website design and development costs, and maintenance and support expenses for web access and hosting activities in Algeria. This modification aligns with the government’s Information and Communication Technology (ICT) policy, which aims to promote widespread internet access, expand the telecommunications network, develop data centers, and foster e-commerce and the digital economy.

The initial VAT exemption for internet access was introduced in the 2010 finance law for a ten-year period. It was extended in 2021 until December 31, 2023, and is now proposed for further extension until December 31, 2025. The rationale behind this extension is to reduce the cost barrier associated with internet access, promoting the development of ICT as a catalyst for the digital economy in Algeria.

In conclusion, the Finance Bill 2024 introduces modifications to the Tax Code regarding the submission of VAT statements and extends the VAT exemption for essential food items and internet-related services. These measures aim to enhance transparency in tax reporting, support citizens economically, contribute to food security, and promote the development of the digital economy in Algeria.

Barry Caldwell

Barry Caldwell

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