Algerian Government To Tighten Control On Foreign Companies

Government decided to tighten control on the foreign companies that are active in Algeria, to stop attempts to tax evasion and the provision of false permits that are costing the public treasury heavy losses worth billions of dollars annually, as the Finance Ministry approved a special measure to fight against all forms of tax evasion, and that by doubling fines by four times if a company refused to provide full payroll accounts.

Prime Minister, Abdelmalek Sella’s government, guaranteed, through the Finance Ministry, a Draft Finance Law for the year 2017, which includes a set of measures that aimed at combating all forms of tax evasion, that is resulting from refusing to declare the total revenues by the foreign companies that are active in Algeria, as the government approved a special procedure that ensures supporting the tightening of the regulatory procedures that are adopted and applied on the foreign companies in Algeria.

Informed sources told “Eco Algeria” that the new measures, if approved would include tightening control over foreign companies from next January, based on deterrent aspects mainly the tax fines, which moved from 500.000 ZDZ to 2 million ZDZ if the companies will refuse to submit all the documents that are related to the its activity, which is the only procedure that is considered as absolving and justification of remittances that are undertaken by the companies that are operating in Algeria.

According to the justifications that were provided by the Government to establish the new procedure, it confirmed that it comes in the context of requiring foreign companies that are operating in Algeria to respect their obligations, and support the taxes services with the fiscal management tools to detect indirect transfers of profits.

New measures that are adopted by the government come to stop the transfer of profits of foreign companies that are operating in Algeria through false statements, and they include a procedures that required these companies to provide detailed earnings based on analytical accounting, which allows the tax control and follow-up to monitor rates of transfer, and the prices that are adopted by the mother foreign companies during the sales in the various branches.

Government is expected to give the companies that are concerned with the procedures, an additional period of six months to investigate in the accounts and provide the necessary justifications for it, in the investigations concern the monitoring of conversion rates, or requests that were sent to the fiscal services and other departments within the framework of administrative assistance and exchanging information.

Forthcoming proceedings in the preliminary draft finance law 2017 will be discussed in the first week of next month to coincide with several reports that warned of the size of the leaked financial amounts, fraud and tax evasion, particularly with regard to the profits of foreign companies and their undeclared revenues, as the phenomenon concerned a number of industrial activities including cars, which were behind the visits of the former Minister of Trade, Amara Ben Younes, who made statements that confused many foreign companies, about the preparation of a detailed report that included the activities of some car concessionnaires and others that are related to trade companies.

These measures come after more than a year for criticism by the former minister, confirming implicitly what he proposed hurt flaw or gap between the volume of activity of agents and ratios for the announced profits that determine the size of the turnover and taxes, and sometimes it comes dealers to permit the registration of a deficit in the activity, which carried the ministry to point out that there are question marks hovering over financial transfers abroad and amplify billing, and the reports were a reference new procedures that will lead to a review and reorganisation of sectors and activities of foreign companies.