The transfer pricing landscape in Algeria is currently undergoing the development and implementation of regulations aimed at promoting tax transparency and ensuring a fair distribution of taxes.
In this article

The article provides a fascinating glimpse into Algeria's transfer pricing (TP) legislation, shedding light on the requirements for TP documentation, including initial and additional documentation.

It also delves into penalties, risk factors, and the use of OECD guidelines for interpretation. Moreover, it emphasizes the self-assessment responsibility placed on taxpayers. It reveals the absence of a specific Advance Pricing Agreements (APA) procedure while highlighting the introduction of a binding tax ruling procedure in the Algerian Tax Procedure Code.  

There are also specific requirements for preparing TP documentation, including the preparation of the Local File and Master File in French or Arabic. Taxpayers are also subject to penalties, including an additional penalty of 25% of the tax adjustment amount if applicable. The article also outlines various risk factors for challenge, such as transactions with related parties in low-tax jurisdictions, persistent losses in entities, and limitations on tax deductions for certain intra-group transactions.

Furthermore, the article highlights the use of OECD guidelines to interpret TP regulations, economic analysis for demonstrating arm's length results, and the self-assessment responsibility placed on taxpayers. It also mentions that while the Algerian tax legislation does not have a specific Advance Pricing Agreements (APA) procedure, a binding tax ruling procedure has been introduced in the Algerian Tax Procedure Code.

For a comprehensive overview of the transfer pricing landscape in African countries and detailed insights, download the full Grant Thornton Africa Transfer Pricing Landscape Guide 2023/2024.