Executive Order dated 5 Chaâbane 1445 corresponding to 15 February 2024 establishing the content and format of transfer pricing documentation

A new executive order in Algeria, implemented pursuant to existing legal provisions, has recently been issued to strengthen tax transparency and compliance in transactions between related entities, both domestic and international. This executive order aims to regulate the documentation required to substantiate transfer pricing policies, a key practice in ensuring tax fairness and alignment with international standards.

Content of the Documentation: The documentation required under this executive order includes detailed information relating to the group of related entities, notably its organisational structure, business activities, intangible assets, financing activities, as well as its financial and tax position.

In addition, specific information concerning the entity subject to the accounting audit is also required, including its organisational structure, transactions carried out with related entities, and its financial information.

Required formats and languages: To ensure optimal accessibility of such information, the executive order provides that the documentation must be submitted to the tax administration in both hard copy and electronic format. Furthermore, it must be drafted in one of the languages used by the tax administration, with a translation provided where necessary.

Previous provisions: This executive order also repeals the previous provisions relating to initial and supplementary documentation, thereby underscoring the importance attached to comprehensive and transparent documentation in substantiating the transfer pricing policies applied by related entities operating in Algeria.

In summary, this executive order constitutes a significant measure aimed at reinforcing tax compliance and transparency in international transactions, which may contribute positively to tax fairness and the effective management of transfer pricing practices within the country.

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