Algeria Introduces 1% Tax on Large Enterprises to Fund University Research and Innovation

The Algerian government has introduced a new tax on large enterprises to fund university research and innovation. According to a recent decree published in the Official Journal, companies with annual revenues of at least 2 billion dinars must allocate 1% of their taxable profits to research, development, and innovation. This move aims to provide a sustainable source of funding for universities, laboratories, young researchers, and start-ups.

The decree, signed by the Minister of Finance, Mohammed Lamine Lebbou, and the Minister of Economy of Knowledge, Start-ups, and Micro-enterprises, Noureddine Ouadah, outlines the eligible expenses and modalities for declaring and applying the tax. The tax will be used to finance research projects conducted by universities or public research centers, as well as collaborative research contracts and subcontracting. Companies can also use the tax to fund the remuneration of researchers, post-doctoral researchers, and students.

The decree also allows companies to finance the acquisition of technological solutions, products, and services from start-ups and scale-ups. This includes contracts for research and development, feasibility studies, prototyping, and testing. Additionally, companies can invest in start-ups and scale-ups through direct participation in their capital, purchase of shares, subscription to investment funds, and financing participatory capital.

The tax applies to all sectors of activity, and companies that fail to meet their obligations will be subject to a penalty. The penalty is calculated as the difference between the legal rate of 1% and the ratio of expenses dedicated to research, development, and innovation. To ensure the smooth implementation of the tax, the Ministry of Economy of Knowledge, Start-ups, and Micro-enterprises will use a digital platform for declaring expenses and submitting supporting documents.

The introduction of this tax is expected to open up new perspectives for universities, laboratories, and start-ups in Algeria. It will enable them to access private funding and collaborate with companies on research and innovation projects. The tax will also encourage companies to invest in research and development, which is essential for the country's economic growth and competitiveness.

The Algerian government aims to promote a culture of innovation and entrepreneurship, particularly among young people. The tax is part of a broader strategy to support the development of start-ups and small and medium-sized enterprises. By providing a sustainable source of funding for research and innovation, the government hopes to stimulate economic growth and improve the country's competitiveness.

The implementation of the tax is expected to be monitored closely by the authorities, and companies will be required to declare their expenses and submit supporting documents through a digital platform. The government has emphasized the importance of transparency and accountability in the use of the tax, and companies that fail to meet their obligations will face penalties.

Key points

• The tax will be used to fund research projects conducted by universities or public research centers, as well as collaborative research contracts and subcontracting.
• Companies can also use the tax to fund the remuneration of researchers, post-doctoral researchers, and students.
• The tax applies to all sectors of activity, and companies that fail to meet their obligations will be subject to a penalty.