Transfer pricing rules and TP law in Algeria

1. In your jurisdiction, what are the legal bases for eliminating double taxation further to a transfer pricing reassessment (European Arbitration Convention, mutual agreement procedures provided for by tax treaties)? In addition to the procedures set forth by such tax treaties, is there any other (formal or informal) domestic procedure in your jurisdiction?

First of all, we draw your attention to the fact that we are not aware about any transfer pricing reassessment in Algeria so there has been no necessity to eliminate double taxation in that framework.

Generally speaking, eliminating double taxation could be envisaged only through the Double Taxation Treaties (hereinafter “DTT”) signed by Algeria with other countries. There is no domestic procedure provided for by the Algerian regulation.

2. In addition – as the case may be – to the European Arbitration Convention, did your jurisdiction sign tax treaties with other States including an arbitration procedure? If yes, can you give the list of such States?

The majority of the DTT signed by Algeria follows the OECD Model Tax Convention and provides for a Mutual Agreement Procedure (hereinafter “MAP”). However, to date, no DTT signed by Algeria includes an arbitration clause.

3. In your experience, in your jurisdiction, how long does it take generally to eliminate the double taxation under the European Arbitration Convention and/or mutual agreement procedures set forth by tax treaties (and/or the domestic procedure if it exists)?

As mentioned above (see question 1), there is no precedent in the framework of transfer pricing issues to the best of knowledge.

However, as a general remark, the tax administration applies the double tax treaty provisions related to the elimination of double taxation (not only for transfer pricing disputes). For instance, the provisions of the article 24 and 26 of the DTT between Algeria and France about double taxation elimination and MAP are applicable.

The practice shows that it is difficult in such matter to estimate the time line for eliminating the double taxation.

4. In your jurisdiction, what are the starting point and time limit to initiate a procedure to eliminate double taxation resulting from a transfer pricing reassessment?

There are no administrative guidelines but the DTT, such as the one signed with France, generally provide for a three-year time limit starting from the first notification of the action resulting in taxation not in accordance with the provisions of the convention. 

5. If a reassessment is issued by your tax authorities, which State must receive the application for the international procedure to eliminate double taxation 1 The terms “international procedure to eliminate double taxation” mean the European Arbitration Convention or a mutual agreement procedure set forth by a tax treaty.  (your State? the other State concerned? both States?)

Provisions of the double tax treaty apply: the company may initiate a MAP if it considers that the actions of one or both of the Contracting States result or will result for it in taxation not in accordance with the provisions of the double tax treaty. It will present its case to the competent authority of the Contracting State of which it is a resident.

6. What are the formal conditions to initiate an international procedure to eliminate double taxation? Is there a list of documents to provide? To which department of the tax authorities (name, address) must the request be sent?

There are no administrative guidelines.

7. In which cases would the competent authority of your jurisdiction refuse to engage/participate to the international procedure to eliminate double taxation?

There are no administrative guidelines.

8. Is tax collection suspended during the procedure?

There are no administrative guidelines.

9. Assuming the procedure results in an agreement on a way to cancel double taxation, how is generally such agreement implemented in your jurisdiction?

There are no administrative guidelines.

10. In your jurisdiction, is it possible to engage concomitantly an international procedure to eliminate double taxation and litigation in front of courts? If yes, is it necessary at some stage to abandon the litigation in order to conclude/finalize the international procedure?

There are no administrative guidelines.

11. Any other interesting aspect not addressed above?

We draw your attention to the fact that, to the best of our knowledge, no Algerian resident company initiated a MAP further to a reassessment performed out of Algeria (in the framework of transfer pricing matter or of any other tax matter).

Abdessemed-Mourad-Nabil
Mourad Nabil Abdessemed
Head of tax department
Algiers
Picture of Samir Sayah
Samir Sayah
Partner Africa Practice – Corporate, M&A
Algiers