© 2012 KPMG Algérie SPA, Algerian member firm of the KPMG network of independent members firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Printed in Algeria. Guide to Investing in Algeria (Updated on August 2012) Dépôt légal : 4460-2012 ISBN : 978-9947-807-19-4 © 2012 KPMG Algérie SPA, Algerian member firm of the KPMG network of independent members firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Printed in Algeria. © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. Tous droits réservés. Imprimé en Algérie. SOMMAIRE Chapter 1 General Introduction to Algeria .................................................................................................................................................................................................................13 1.1 History and Geography .........................................................................................................................................................................................................................................13 1.2 Population Demographics ................................................................................................................................................................................................................................14 1.3 Main cities - Languages - Religions ..........................................................................................................................................................................................................14 1.4 Territorial and administrative organization – Political institutions ........................................................................................................................15 1.5 Political parties Associations .........................................................................................................................................................................................................................16 1.6 Judicial system .............................................................................................................................................................................................................................................................17 1.7 Staying in Algeria: conditions – procedures – work permit ...........................................................................................................................................17 1.8 Practical information ................................................................................................................................................................................................................................................18 1.9 Economy: key figures ...............................................................................................................................................................................................................................................19 1.10 Economic policy: development and trend ........................................................................................................................................................................................27 1.11 Economic development outlook 2010–2014 ...................................................................................................................................................................................40 1.12 The legal environment for business........................................................................................................................................................................................................42 Chapter 2 Foreign Investment in Algeria .......................................................................................................................................................................................................................44 2.1 Legal framework ........................................................................................................................................................................................................................................................44 2.1.1 General definition of investment ...............................................................................................................................................................................................................44 2.1.2 Freedom to invest and Algerian partnerships ...............................................................................................................................................................................44 2.1.2.1 Freedom to invest ......................................................................................................................................................................................................................................................44 2.1.2.2 Partnership ........................................................................................................................................................................................................................................................................45 2.1.2.3 State first refusal right ..........................................................................................................................................................................................................................................46 2.1.3 Guarantees - Protections - Agreements concluded by Algeria ....................................................................................................................................48 2.1.4 Capital transfers in Algeria ..............................................................................................................................................................................................................................50 2.1.4.1 The principle ....................................................................................................................................................................................................................................................................50 2.1.4.2 Transfer procedures .................................................................................................................................................................................................................................................51 2.1.4.3 Investment financing ..............................................................................................................................................................................................................................................51 2.1.5 Tax incentives likely to be granted to investors .........................................................................................................................................................................51 2.1.5.1 General scheme tax incentives ...................................................................................................................................................................................................................52 2.1.5.2 Dispensatory scheme tax incentives ....................................................................................................................................................................................................54 2.1.5.3 Procedures to obtain incentives..................................................................................................................................................................................................................55 2.2 Implementation of incentives ......................................................................................................................................................................................................................56 2.2.1 Incentives at the implementation phase .........................................................................................................................................................................................56 2.2.2 Incentives at the operating phase ...........................................................................................................................................................................................................56 2.2.3 Obligation to reinvest profits .......................................................................................................................................................................................................................57 2.3 Institutions governing investment promotion ...........................................................................................................................................................................58 2.3.1 The National Investment Council (CNI) ...............................................................................................................................................................................................58 2.3.2 The National Investment Development Agency (ANDI) ...................................................................................................................................................59 2.3.3 One-stop service ..........................................................................................................................................................................................................................................................60 Chapter 3 Legal Forms of Incorporation in Algeria ...................................................................................................................................................................................61 3.1 Commercial companies .......................................................................................................................................................................................................................................61 3.1.1 Common elements for all commercial companies..................................................................................................................................................................61 3.1.2 The features of each commercial company-type ....................................................................................................................................................................63 3.1.2.1 The joint stock company (JSC) ....................................................................................................................................................................................................................63 3.1.2.2 The limited liability company (LLC) .......................................................................................................................................................................................................70 3.1.2.3 The sole proprietorship limited liability company (SPLLC) .............................................................................................................................................74 3.1.2.4 Limited partnership (LP) ....................................................................................................................................................................................................................................75 3.1.2.5 Limited partnership with shares (LPS) ...............................................................................................................................................................................................75 3.1.2.6 Undeclared partnership ........................................................................................................................................................................................................................................76 3.2 The Group/Joint Venture [index 49] ....................................................................................................................................................................................................77 3.2.1 The goal of the group/JV ...................................................................................................................................................................................................................................77 3.2.2 Transparency of the group’s activities ................................................................................................................................................................................................77 3.2.3 Legal status of the group/JV ........................................................................................................................................................................................................................77 3.2.4 Contractual freedom ..............................................................................................................................................................................................................................................77 3.2.5 Liability ................................................................................................................................................................................................................................................................................78 3.2.6 Practical use of groupings and temporary JV ..............................................................................................................................................................................78 3.3 Other types of establishments in Algeria ........................................................................................................................................................................................78 © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. 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Imprimé en Algérie. 3.3.1 The liaison office .........................................................................................................................................................................................................................................................78 3.3.1.1 The principle ....................................................................................................................................................................................................................................................................78 3.3.1.2 The accreditation of the liaison office...................................................................................................................................................................................................79 3.3.1.3 Operations and obligations of the liaison office ........................................................................................................................................................................79 3.3.1.4 Advisability of resorting to a liaison office ......................................................................................................................................................................................79 3.3.2 The branch registered with the trade registry .............................................................................................................................................................................80 3.3.3 The permanent establishment .....................................................................................................................................................................................................................80 Chapter 4 Exercising Commercial Activities ..........................................................................................................................................................................................................81 4.1 The Trade Register ......................................................................................................................................................................................................................................................81 4.2 Regulated activities ................................................................................................................................................................................................................................................83 4.3 The status of foreign traders ..........................................................................................................................................................................................................................83 4.3.1 The professional card .............................................................................................................................................................................................................................................84 4.3.1.1 Conditions for obtaining the professional card ..........................................................................................................................................................................84 4.3.1.2 Establishing/Renewal of the professional card ..........................................................................................................................................................................85 4.3.1.3 Period of validity of the professional card ........................................................................................................................................................................................86 4.3.2 The foreign resident card ...................................................................................................................................................................................................................................86 Chapter 5 Foreign Trade ....................................................................................................................................................................................................................................................................................87 5.1 Legal Framework concerning Imports and Exports................................................................................................................................................................87 5.1.1 Freedom of Imports and Exports ...............................................................................................................................................................................................................87 5.1.2 Protective Trade Measures ..............................................................................................................................................................................................................................87 5.1.2.1 Safeguards .........................................................................................................................................................................................................................................................................87 5.1.2.2 Countervailing Measures ..................................................................................................................................................................................................................................88 5.1.2.3 Anti-Dumping Measures ..................................................................................................................................................................................................................................88 5.2 Obligations of Commercial Companies ..............................................................................................................................................................................................89 5.3 Customs Procedures ..............................................................................................................................................................................................................................................89 5.3.1 Customs Regulations .............................................................................................................................................................................................................................................89 5.3.2 The customs agent ...................................................................................................................................................................................................................................................90 5.3.3 The accompanying supporting documents ....................................................................................................................................................................................91 5.3.4 Bonded Warehouses Regimes .......................................................................................................................................................................................................................91 5.3.5 The temporary admission regime .............................................................................................................................................................................................................92 5.3.6 Customs value ..............................................................................................................................................................................................................................................................92 5.3.7 Measures to protect intellectual property rights .....................................................................................................................................................................93 5.3.8 The Euro-Mediterranean agreement establishing an association between the European Union and Algeria ........93 Chapter 6 Foreign Exchange Regulations ...................................................................................................................................................................................................................96 6.1 Contextual elements ...............................................................................................................................................................................................................................................96 6.2 The new role of commercial banks ........................................................................................................................................................................................................97 6.3 The principle of the free movement of capital in a commercial context ........................................................................................................97 6.4 Foreign currency accounts ..............................................................................................................................................................................................................................97 6.5 The imports system .................................................................................................................................................................................................................................................99 6.5.1 Domiciliation ..................................................................................................................................................................................................................................................................99 6.5.2 Elements or information contained in the commercial contract ..........................................................................................................................100 6.5.3 Payment of imports ................................................................................................................................................................................................................................................101 6.5.4 The exports system ................................................................................................................................................................................................................................................102 Chapter 7 Contract Law ...............................................................................................................................................................................................................................................................................103 7.1 General principles ....................................................................................................................................................................................................................................................103 7.2 The effects of the contract .............................................................................................................................................................................................................................104 7.3 Contractual liability and breach of contract ................................................................................................................................................................................104 Chapter 8 Competition Law ..................................................................................................................................................................................................................................................................107 8.1 Definition and scope of application ......................................................................................................................................................................................................107 8.2 Pricing freedom...........................................................................................................................................................................................................................................................107 8.3 Unfair contract terms ...........................................................................................................................................................................................................................................108 8.3.1 The essential components of commercial contracts ..........................................................................................................................................................108 8.3.2 Contract terms deemed unfair ....................................................................................................................................................................................................................108 8.3.3 The establishment of a controlling institution ........................................................................................................................................................................109 8.4 Prohibited restrictive practices .................................................................................................................................................................................................................109 8.5 Regulation of economic concentrations .........................................................................................................................................................................................110 © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. 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Imprimé en Algérie. 8.6 Rules applicable to commercial practices ......................................................................................................................................................................................111 8.7 The Competitive Council ..................................................................................................................................................................................................................................112 Chapter 9 The Financial and Banking System .................................................................................................................................................................................................114 9.1 The legal framework of banking activities ...................................................................................................................................................................................114 9.1.1 The provisions of the Ordinance on money and credit ....................................................................................................................................................115 9.1.1.1 Monitoring payment systems ....................................................................................................................................................................................................................115 9.1.1.2 Adapting to international accounting standards ....................................................................................................................................................................115 9.1.1.3 Strengthening banking supervision .....................................................................................................................................................................................................115 9.1.1.4 Minimum capital requirements ................................................................................................................................................................................................................115 9.1.1.5 The status of financial institutions ........................................................................................................................................................................................................115 9.1.1.6 The equity investment system ...................................................................................................................................................................................................................116 9.1.1.7 Organizations outside the banking legislation ........................................................................................................................................................................116 9.1.1.8 Group treasury operations .............................................................................................................................................................................................................................116 9.1.1.9 Regulated agreements and normal transactions ..................................................................................................................................................................116 9.1.1.10 Withdrawal of the Public Treasury from the deposit insurance fund .................................................................................................................117 9.1.1.11 The right to a bank account ..........................................................................................................................................................................................................................117 9.1.1.12 Strengthening of cooperation with foreign monetary authorities.......................................................................................................................117 9.1.2 Principles of the Algerian banking system laid down by Ordinance 03-11 pertaining to Money and Credit ..........117 9.1.2.1 Privileges granted to banks and financial institutions .....................................................................................................................................................117 9.1.2.2 Broad delegation of power to monetary authorities .........................................................................................................................................................118 9.1.2.3 Separation between the regulatory and supervisory authorities .........................................................................................................................118 9.2 The characteristics of the Algerian banking sector ...............................................................................................................................................................118 9.2.1 Diversification of the banking system ................................................................................................................................................................................................120 9.2.2 Modernization of the Algerian banking system ......................................................................................................................................................................121 9.3 Requirements for the formation and establishment of banks and financial institutions ...........................................................121 9.4 The financial market ............................................................................................................................................................................................................................................123 9.5 The fight against money laundering ....................................................................................................................................................................................................124 9.6 Prudential regulations .........................................................................................................................................................................................................................................124 9.7 Banking services ......................................................................................................................................................................................................................................................124 9.7.1 Banking approach ....................................................................................................................................................................................................................................................125 9.7.2 Banking products and services ..................................................................................................................................................................................................................125 Chapter 10 The Algerian Accounting System ........................................................................................................................................................................................................128 10.1 General background on the Algerian Accounting System .............................................................................................................................................128 10.1.1 The existing accounting plan .......................................................................................................................................................................................................................128 10.1.2 Revaluations .................................................................................................................................................................................................................................................................128 10.1.3 The new financial and accounting system (FAS) ....................................................................................................................................................................129 10.2 The financial and accounting system ................................................................................................................................................................................................129 10.2.1 Required financial statements ..................................................................................................................................................................................................................130 10.2.2 Balance sheet format ............................................................................................................................................................................................................................................130 10.2.3 Format of the balance sheet .........................................................................................................................................................................................................................132 10.2.4 Detailed accounting plan and nomenclature of the FAS project ..........................................................................................................................134 10.2.5 The main accounting concepts and innovations introduced by the proposed FAS compared to NAP 75 .................136 10.2.5.1 General principles ....................................................................................................................................................................................................................................................136 10.2.5.2 Main innovations .....................................................................................................................................................................................................................................................137 10.2.5.3 IFRS influence in definitions and recognition criteria ........................................................................................................................................................137 10.2.5.4 Contradictions with previous legislations ....................................................................................................................................................................................138 10.2.6 Organizational rules of the FAS ..140 10.2.7 Analysis of the main accounting rules or standards .........................................................................................................................................................139 10.2.7.1 Property, plant and equipment .................................................................................................................................................................................................................139 10.2.7.2 Non-current financial assets ........................................................................................................................................................................................................................141 10.2.7.3 Inventory ..........................................................................................................................................................................................................................................................................142 10.2.7.4 Trade accounts receivables .............................................................................................................................................................................................................................143 10.2.7.5 Subsidies .........................................................................................................................................................................................................................................................................143 10.2.7.6 Provisions for liabilities and charges....................................................................................................................................................................................................143 10.2.7.7 Loans and financial liabilities .....................................................................................................................................................................................................................144 10.2.7.8 Long-term contracts .............................................................................................................................................................................................................................................144 10.2.7.9 Leasing contracts and deferred taxes .................................................................................................................................................................................................145 10.2.7.10 Method and valuation changes .................................................................................................................................................................................................................145 10.2.7.11 Rules of consolidation, goodwill and concessions ...............................................................................................................................................................146 10.2.8 Conclusion regarding the FAS proposal under review ....................................................................................................................................................146 10.3 Latest elements concerning FAS ..............................................................................................................................................................................................................147 10.3.1 Transition-related problems ...........................................................................................................................................................................................................................147 10.3.1.1 Contents of these instructions ...................................................................................................................................................................................................................147 10.3.1.2 Examination of general provisions ........................................................................................................................................................................................................147 10.3.1.3 Procedures that have to be implemented ......................................................................................................................................................................................148 © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. 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Imprimé en Algérie. 10.3.1.4 Accounting provisions related to the transition ......................................................................................................................................................................149 10.3.1.5 Contents of the methodological notes: ............................................................................................................................................................................................149 10.3.1.6 Details that are not contained in the instructions .................................................................................................................................................................152 10.3.2 Position of the tax authorities.....................................................................................................................................................................................................................152 10.3.2.1 Provisions of the Supplementary Finance for 2009 relating to FAS ....................................................................................................................152 10.3.2.1.1 Monitoring long-term contracts ................................................................................................................................................................................................................152 10.3.2.1.2 Provisions .........................................................................................................................................................................................................................................................................153 10.3.2.1.3 Preliminary expenses ...........................................................................................................................................................................................................................................153 10.3.2.1.4 Asset revaluation ......................................................................................................................................................................................................................................................153 10.3.2.1.5 General framework .................................................................................................................................................................................................................................................154 10.3.2.1.6 Conclusion .......................................................................................................................................................................................................................................................................154 10.3.2.2 Provisions relating to the 2010 Finance Law ..............................................................................................................................................................................154 10.3.2.2.1 Treatment of Leasing ............................................................................................................................................................................................................................................154 10.3.2.2.2 Operating depreciation.......................................................................................................................................................................................................................................154 10.3.2.2.3 Reversal of preliminary expenses ...........................................................................................................................................................................................................154 10.3.2.2.4 Treatment of grants ................................................................................................................................................................................................................................................155 10.3.2.3 Provisions of the supplementary Finance Law for 2010 affecting the FAS .................................................................................................155 10.3.3 Conclusion .......................................................................................................................................................................................................................................................................156 Chapter 11 The Tax System in Algeria ................................................................................................................................................................................................................................157 11.1 Taxation of individuals .......................................................................................................................................................................................................................................157 11.1.1 Tax liable individuals ...........................................................................................................................................................................................................................................157 11.1.2 Residents and non-resident Algerians ..............................................................................................................................................................................................157 11.1.2.1 Domestic rules ...........................................................................................................................................................................................................................................................157 11.1.2.2 Treaty rules .....................................................................................................................................................................................................................................................................157 11.1.3 Definition of Global income tax (Impôt sur le revenu global, IRG) ......................................................................................................................158 11.1.4 Tax regime ......................................................................................................................................................................................................................................................................158 11.1.4.1 Taxation of salaries ................................................................................................................................................................................................................................................158 11.1.4.1.1 Determination of taxable income ..........................................................................................................................................................................................................158 11.1.4.1.2 Tax system for Algerian salaried workers ......................................................................................................................................................................................158 11.1.4.1.3 Tax system for expatriate salaried workers ...................................................................................................................................................................................159 11.1.4.2 Taxation of income from movable capital ......................................................................................................................................................................................159 1.1.1.4.2.1 Revenues from dividends and membership shares ............................................................................................................................................................159 1.1.1.4.2.2 Revenues from debt securities, deposits and guarantee bonds ...........................................................................................................................160 1.1.1.4.3 Taxation of capital gains ...................................................................................................................................................................................................................................160 1.1.1.4.3.1 Capital gains on property conveyances ...........................................................................................................................................................................................160 1.1.1.4.3.2 Capital gains from the transfer of capital assets ...................................................................................................................................................................160 1.1.1.4.4 Other revenue categories ...............................................................................................................................................................................................................................161 1.1.1.4.4.1 Industrial and commercial profits (ICP) .............................................................................................................................................................................................161 1.1.1.4.4.2 Non-commercial earnings ..............................................................................................................................................................................................................................162 1.1.1.4.4.3 Property revenues ..................................................................................................................................................................................................................................................162 11.2 Main taxes paid by legal entities .............................................................................................................................................................................................................162 11.2.1 Resident legal entities .......................................................................................................................................................................................................................................162 11.2.1.1 Direct taxes .....................................................................................................................................................................................................................................................................162 11.2.1.1.1 Corporate income tax (IBS) ..........................................................................................................................................................................................................................162 11.2.1.1.2 Tax on professional activities (TAP) .......................................................................................................................................................................................................167 11.2.1.1.3 Dividends .........................................................................................................................................................................................................................................................................169 11.2.1.2 Value Added Tax (VAT) ..........................................................................................................................................................................................................................................169 11.2.1.2.1 Territoriality of the VAT ........................................................................................................................................................................................................................................170 11.2.1.2.2 Taxable operations ..................................................................................................................................................................................................................................................170 11.2.1.2.3 Calculation of the tax .........................................................................................................................................................................................................................................171 11.2.1.2.4 Assessment and payment of taxes ......................................................................................................................................................................................................171 11.2.1.2.5 Specific regimes .......................................................................................................................................................................................................................................................172 11.2.1.3 Registration fees applicable to legal entities ..............................................................................................................................................................................174 11.2.1.3.1 Registration fees on transfers ....................................................................................................................................................................................................................174 11.2.1.3.2 Registration fees for articles of incorporation .........................................................................................................................................................................175 11.2.1.3.3 Registration fees on the transfer of corporate shares and bonds for consideration .........................................................................177 11.2.1.4 Tax advantages ............................................................................................................................................................................................................................................................177 11.2.2 Non-resident legal entities .............................................................................................................................................................................................................................178 11.2.2.1 The regime of service providers ................................................................................................................................................................................................................179 11.2.2.1.1 The withholding tax regime ..........................................................................................................................................................................................................................179 11.2.2.1.2 The real income regime option ..................................................................................................................................................................................................................179 11.2.2.1.3 Sale of equipment ...................................................................................................................................................................................................................................................179 11.2.2.1.4 Delivery of services and tax treaties ....................................................................................................................................................................................................179 11.2.2.2 The construction regime ..................................................................................................................................................................................................................................180 11.2.2.2.1 The real income taxation regime ............................................................................................................................................................................................................180 11.2.2.2.2 Tax declaration obligations ...........................................................................................................................................................................................................................180 11.2.2.2.3 EPC contracts and tax treaties ..................................................................................................................................................................................................................180 11.2.2.3 Specific circumstances linked to the existence of a grouping ...............................................................................................................................181 © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. 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Imprimé en Algérie. 11.2.2.3.1 Signing a grouping contract Signing a grouping contract ........................................................................................................................................181 11.2.2.3.2 Invoicing and earnings distribution problems ..........................................................................................................................................................................181 11.2.2.4 Double taxation treaties...................................................................................................................................................................................................................................181 11.2.2.4.1 General presentation ...........................................................................................................................................................................................................................................182 11.2.2.4.2 List of treaties signed by Algeria .............................................................................................................................................................................................................182 11.2.2.4.3 Presentation and analysis of the OECD model convention ........................................................................................................................................184 11.3 Supervision and litigation ..............................................................................................................................................................................................................................186 11.3.1 Control procedures and the guarantees of taxable persons ......................................................................................................................................186 11.3.1.1 Controlling declarations ...................................................................................................................................................................................................................................186 11.3.1.1.1 Definition ..........................................................................................................................................................................................................................................................................186 11.3.1.1.2 Control procedures ................................................................................................................................................................................................................................................186 11.3.1.1.3 Correction of the declarations....................................................................................................................................................................................................................186 11.3.1.2 Accounting audits ...................................................................................................................................................................................................................................................187 11.3.1.2.1 Audit notification dispatch ............................................................................................................................................................................................................................187 11.3.1.2.2 Prior preparation period ...................................................................................................................................................................................................................................187 11.3.1.2.3 Assistance of counsel .........................................................................................................................................................................................................................................187 11.3.1.2.4 Place of audit................................................................................................................................................................................................................................................................188 11.3.1.2.5 Time limit of accounting audits ...............................................................................................................................................................................................................188 11.3.1.2.6 Provision prohibiting the renewal of accounting audits ................................................................................................................................................188 11.3.1.2.7 Notification of adjustments .........................................................................................................................................................................................................................188 11.3.2 Litigation............................................................................................................................................................................................................................................................................190 11.3.2.1 The prior administrative appeal ................................................................................................................................................................................................................190 11.3.2.1.1 Jurisdiction of the director of the DGE ..............................................................................................................................................................................................190 11.3.2.1.2 Investigation of the claim ................................................................................................................................................................................................................................190 11.3.2.1.3 Choosing a residence in Algeria ................................................................................................................................................................................................................191 11.3.2.1.4 Statutory payment deferment ....................................................................................................................................................................................................................191 11.3.2.1.5 Jurisdiction of the central tax authorities ......................................................................................................................................................................................192 11.3.2.2 Appealing before the Central Commission ...................................................................................................................................................................................192 11.3.2.2.1 Deadline for petitioning .....................................................................................................................................................................................................................................192 11.3.2.2.2 Effect of the Central Commission’s opinion ................................................................................................................................................................................193 11.3.2.3 Judicial proceedings .............................................................................................................................................................................................................................................193 11.3.2.3.1 Proceedings before the administrative court ..............................................................................................................................................................................193 11.3.2.3.2 Proceedings before the State Council ...............................................................................................................................................................................................193 11.4 Taxation of corporate groups .......................................................................................................................................................................................................................194 11.4.1 Definition of corporate groups ...................................................................................................................................................................................................................194 11.4.1.1 Legal definition of corporate group .....................................................................................................................................................................................................194 11.4.1.2 Definition of a corporate group from a tax standpoint.....................................................................................................................................................195 11.4.2 The regime applicable to corporate groups ..................................................................................................................................................................................195 11.4.2.1 The legal regime ........................................................................................................................................................................................................................................................195 11.4.2.2 The tax regime.............................................................................................................................................................................................................................................................196 11.4.2.2.1 Applicable tax rate ..................................................................................................................................................................................................................................................196 11.4.2.2.2 Consolidation of earnings................................................................................................................................................................................................................................197 11.4.2.2.3 Granted tax advantages ....................................................................................................................................................................................................................................197 11.4.2.2.4 Declaration obligations of corporate groups ..............................................................................................................................................................................298 11.4.3 Financial flexibility granted to corporate groups .................................................................................................................................................................298 Chapter 12 Social Systems ..........................................................................................................................................................................................................................................................................201 12.1 The main characteristics of labor law .................................................................................................................................................................................................201 12.1.1 Law No. 90-11 of 21 April, 1990 concerning employment relationships ..........................................................................................................201 12.1.2 Collective bargaining ............................................................................................................................................................................................................................................201 12.1.3 Internal rules .................................................................................................................................................................................................................................................................202 12.1.4 Exercising union rights ......................................................................................................................................................................................................................................202 12.1.5 Organs of representation ...............................................................................................................................................................................................................................202 12.1.6 Employer obligations concerning registers .................................................................................................................................................................................203 12.1.7 Recruitment ...................................................................................................................................................................................................................................................................203 12.1.8 Legal workweek ........................................................................................................................................................................................................................................................205 12.1.9 National guaranteed minimum wage ................................................................................................................................................................................................206 12.1.10 Legal rest periods and leave .........................................................................................................................................................................................................................206 12.1.11 Training and promotion while employed .......................................................................................................................................................................................207 12.1.12 Amendment, suspension and termination of the employment relationship ...........................................................................................208 12.2 Social security, retirement and unemployment .......................................................................................................................................................................211 12.2.1 Subjection and affiliation .................................................................................................................................................................................................................................211 12.2.2 Retirement .......................................................................................................................................................................................................................................................................212 12.2.3 Organization of unemployment insurance ....................................................................................................................................................................................213 12.2.4 Assessment basis, payment, control and litigation .............................................................................................................................................................215 12.2.4.1 Assessment basis of contributions........................................................................................................................................................................................................215 12.2.4.2 Payment ..............................................................................................................................................................................................................................................................................215 12.2.4.3 Verification .......................................................................................................................................................................................................................................................................216 12.2.4.4 Litigation............................................................................................................................................................................................................................................................................216 © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. 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Imprimé en Algérie. 12.3 The independent consultant and the work contract ...........................................................................................................................................................219 12.4 The status of the expatriate ..........................................................................................................................................................................................................................219 12.4.1 Conditions of entry, stay and movement of foreigners ....................................................................................................................................................219 12.4.1.1 General provisions...................................................................................................................................................................................................................................................219 12.4.1.2 Conditions of Entry and Exit of Foreigners ..................................................................................................................................................................................220 12.4.1.3 Conditions of stay for non-residents...................................................................................................................................................................................................220 12.4.1.4 Conditions of residence for foreigners ..............................................................................................................................................................................................220 12.4.1.5 Conditions for movement of foreigners ..........................................................................................................................................................................................221 12.4.1.6 Declaration of employment and accommodation for foreigners ..........................................................................................................................221 12.4.1.7 Expulsion and escort to the border ......................................................................................................................................................................................................221 12.4.1.8 Penalties ............................................................................................................................................................................................................................................................................222 12.4.2 Recruitment conditions.....................................................................................................................................................................................................................................222 12.4.2.1 In the private economic sector ..................................................................................................................................................................................................................222 12.4.2.2 In the public service sector ..........................................................................................................................................................................................................................223 12.4.3 Taxes ......................................................................................................................................................................................................................................................................................223 12.4.4 Repatriation of salaries ......................................................................................................................................................................................................................................223 12.5 Social security .............................................................................................................................................................................................................................................................224 Chapter 13 The Algerian Justice System .......................................................................................................................................................................................................................226 13.1 The judicial organization .................................................................................................................................................................................................................................226 13.1.1 The tribunals .................................................................................................................................................................................................................................................................226 13.1.1.1 Proceedings before the tribunals ............................................................................................................................................................................................................227 13.1.1.2 Administrative tribunals ...................................................................................................................................................................................................................................228 13.1.2 The courts ......................................................................................................................................................................................................................................................................228 13.1.3 The Supreme Court ...............................................................................................................................................................................................................................................228 13.1.4 Overview of the system of legal remedies ...................................................................................................................................................................................230 13.1.5 The State Council ...................................................................................................................................................................................................................................................230 13.1.6 The specifics of administrative procedures .................................................................................................................................................................................231 13.1.7 Overview of the system of legal remedies ...................................................................................................................................................................................232 13.2 Jurisdiction of courts and tribunals with regard to emergency measures ................................................................................................232 13.2.1 Emergency measures ..........................................................................................................................................................................................................................................233 13.2.2 Orders for payment ...............................................................................................................................................................................................................................................233 13.2.3 Proceedings for interim relief ......................................................................................................................................................................................................................233 13.3 Personnel categories in the judicial system ................................................................................................................................................................................234 13.3.1 Judges .................................................................................................................................................................................................................................................................................234 13.3.2 Court officers ................................................................................................................................................................................................................................................................234 13.3.3 Civil servants ................................................................................................................................................................................................................................................................234 13.4 Customs Disputes ...................................................................................................................................................................................................................................................234 13.4.1 Persons empowered to establish the occurrence of customs violations and their powers .....................................................235 13.4.2 Methods of establishing customs violations .............................................................................................................................................................................235 13.4.3 Scope of jurisdictions ..........................................................................................................................................................................................................................................236 13.4.3.1 Absolute jurisdiction ............................................................................................................................................................................................................................................236 13.4.3.2 Territorial jurisdiction ...........................................................................................................................................................................................................................................236 13.4.4 Customs offenses ....................................................................................................................................................................................................................................................237 13.4.4.1 Misdemeanors ............................................................................................................................................................................................................................................................237 13.4.4.2 Petty customs offenses......................................................................................................................................................................................................................................237 13.4.5 Main violations likely to be uncovered by the verification of merchandise .............................................................................................238 13.4.6 Prosecutions and punishment of customs violations.......................................................................................................................................................238 13.4.7 Organization of the directorate general of customs ...........................................................................................................................................................240 13.5 Alternative dispute resolution ...................................................................................................................................................................................................................240 13.5.1 Arbitration .......................................................................................................................................................................................................................................................................240 13.5.2 Mediation .........................................................................................................................................................................................................................................................................240 Chapter 14 Arbitration ..........................................................................................................................................................................................................................................................................................242 Chapter 15 The Legal Regimes for Hydrocarbons and Mining .......................................................................................................................................244 15.1 Hydrocarbons...............................................................................................................................................................................................................................................................244 15.1.1 The legislative framework ............................................................................................................................................................................................................................244 15.1.2 The tax system ...........................................................................................................................................................................................................................................................246 15.1.2.1 The upstream (exploration and/or exploitation activities) tax system ..........................................................................................................246 15.1.2.1.1 The surface tax ...........................................................................................................................................................................................................................................................246 15.1.2.1.2 Oil royalties ....................................................................................................................................................................................................................................................................246 15.1.2.1.3 Tax on oil revenues (TOR) ...............................................................................................................................................................................................................................247 15.1.2.1.4 The Additional Tax on Income .....................................................................................................................................................................................................................248 15.1.2.1.5 Tax on flaring ................................................................................................................................................................................................................................................................248 © 2012 KPMG Algérie SPA, membre algérien du réseau KPMG constitué de cabinets indépendants adhérents de KPMG International Coopérative, une entité de droit suisse. Tous droits réservés. Imprimé en Algérie.
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