The Finance Law of 2023 in Algeria has introduced the following tax changes in respect of startups.
Research and Development (R&D) Expenses:
Costs incurred as part of corporate research and development may be deducted from income or profit (IRG/IBS) up to a maximum of 30% and up to a maximum of 200 million dinars.
With the help of these incentives, businesses of all sizes and types are urged to invest in R&D to increase their competitiveness and produce more competitive and creative goods and services.
Open Innovation
Deduction of up to 30% of revenue or profit (IRG/IBS) and a maximum of KD 200 million for costs associated with open innovation initiatives completed in conjunction with organisations that have acquired the “Startup” or “Business Incubator” label.
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By allocating R&D expenses from large firms to startups and business incubators, this approach seeks to incentivize investment in incubators and startups within the context of open innovation.
Investing in startups:
30% of the exemptions received through the Algerian Agency for the Promotion of Investment are reinvested, on average, in incubator or startup capital.
This policy intends to encourage the private sector to contribute more to startup funding.
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Self-Employment:
The maximum annual turnover is established at five million Algerian dinars, and the single tax rate is fixed at 5% for operations carried out under the self-employment legal system.
Algeria startups 2023 Algeria startups 2023
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard