a) Which transactions must be documented (all transactions with associated enterprises, or only those which exceed a particular threshold)?
All transactions with associated enterprises, including those located in Algeria. The Supplementary Finance Act 2010 provides some examples of situations where profits may be transferred to non-resident and resident related parties, such as where the sale price is increased or the acquisition price decreased, where excessive royalties are paid or disproportionate consideration is paid for services rendered, where interest-free loans or low-interest loans are made, or where the interest provided for by a loan agreement is waived.
b) What is the definition of “associated enterprises” for the purposes of this requirement?
The definition is similar to the OECD’s article 9 definition of associated enterprises. Article 141bis of the Algerian code defines an “associated enterprise” as an enterprise operating in Algeria or outside Algeria which participates directly or indirectly in the management, control or capital of another enterprise operating in Algeria or outside Algeria. It should be noted that the Algerian tax code extends the application of transfer pricing beyond cross-border transactions to transactions between entities operating in Algeria.
c) For EU countries, is the content of the documentation similar to that described in the EU Code of Conduct on transfer pricing documentation for associated enterprises (“EU TPD”)? If not, are taxpayers entitled to choose between the local requirements and the EU TPD?
Not applicable. The Decree of application of article 141bis of the Direct Tax Code has been published in the official journal dated 20 January 2013. The latter describes the documentation to be produced by the affiliated firms with the purpose of to justify the transfer price. Such documentation shall contain general (such as financial information, general and administrative costs, costs of research and development information) and specific (such as copies of all contracts between the concerned companies) information.
d) Do taxpayers which are not established in your jurisdiction need to undertake to provide any specific information upon request? Can your tax authorities require the taxpayer in your jurisdiction to provide information which is located in another state?
From a practical standpoint, the tax authorities may require any information that may support the declared transaction price.
e) If comparable studies are to be provided, do the tax authorities generally accept regional benchmark studies (e.g. pan-European benchmark studies)?
There is no provision setting out the benchmark or method to be used. The source providing the benchmark is more relevant and more important than the scope of the study (regional / global). In other words, database figures or data provided by a government agency are more likely to be accepted than internal market forecast studies.
f) What language(s) are to be used by taxpayers in submitting the transfer pricing documentation?
Strictly speaking the document should be provided in Arabic, but a French version or certified translation will be accepted.