- Algerian tax authorities recently issued a tax administration doctrine on the tax audit approach to input value-added tax (VAT) and VAT credits audits, as well as VAT compliance requirements for VAT-exempt turnover.
- Instruction No. 05/MF/DGI/24 from the General Directorate of Taxes provides guidelines for addressing incorrectly deducted VAT on purchases and VAT credits during a tax audit or in litigation claims.
- The instruction aims to clarify the treatment of VAT credits and nondeductible VAT incurred on purchases of goods and services.
- It instructs tax auditors to verify the regularity of deducted VAT, ensure that the turnover is subject to VAT, and conduct a thorough examination of various aspects related to deducted VAT.
- Importantly, it clarifies that VAT deducted beyond the statute of limitations may be examined and used to adjust the VAT at issue for the period under audit.
- Additionally, it states that VAT credits from previous fiscal years affecting the years under audit can be audited and adjusted for reassessment.
- The instruction also provides clear guidelines regarding VAT credit reporting.
Source EY
