Algeria's tax debt settlement system has been officially expanded to include nine previously ambiguous cases, clarifying application since the implementation of Article 122 of the Finance Law for 2026. This expansion covers debts that were previously unclear under the new law, addressing ambiguities that arose following its initial implementation. The Directorate General of Taxes issued these key clarifications to address debts that were unclear under the new legal framework. The new guidance is based on Instruction No. 2/2026, which the Directorate General of Taxes issued on July 30, 2026. This full instruction complements an earlier directive, Instruction No. 16, dated April 9, 2026, further detailing the application of the settlement system. The stated goal of these measures is to unify the application of the settlement system across all tax departments in the country, ensuring consistent interpretation and implementation nationwide. To ensure this consistency, the Directorate General of Taxes has specifically called for the widespread dissemination and strict application of these instructions by all relevant tax authorities.
New Inclusions and Treatments
Scheduled debts are now explicitly included in Algeria's tax debt settlement system, allowing taxpayers with such obligations to benefit from the new provisions. Independent tax fines have also been incorporated into the system, considered standalone tax debts that benefit from the settlement provisions. This means that independent tax fines, previously a point of ambiguity, are now clearly eligible for the relief offered. Taxpayers receive a significant 30 percent reduction on the value of these independent tax fines, providing substantial relief. Additionally, collection fines associated with independent tax fines are entirely waived. To benefit from this reduction and waiver, payment of 70 percent of the remaining fine amount is required.
Amounts collected via third-party seizure are also now included in the tax debt settlement system, providing a clearer pathway for their treatment. Specifically, amounts collected through third-party seizure orders (ATD) executed in 2026 for real estate transactions are considered when a taxpayer joins the settlement system. These collected amounts are directly deducted from the 70 percent payable amount, reducing the immediate financial burden on the taxpayer. Any excess amounts collected beyond the required 70 percent are returned to the taxpayer, ensuring fairness and preventing overpayment. The system allows for the recovery of surplus amounts for taxpayers who paid more than the amount due, reinforcing the principle of accurate and fair collection.
Debts related to real estate tax (TF) and household waste collection fees (TEOM) are now explicitly eligible for the settlement system. These specific debts are eligible for the provisions outlined in Article 122 of the Finance Law for 2026, extending the scope of relief to a broader range of municipal and property-related taxes.
Handling Rescheduled and Mortgaged Debts
Debts that were previously rescheduled or subject to a payment plan are not excluded from the expanded tax debt settlement system, even if the taxpayer failed to meet prior commitments. This provision offers a new opportunity for taxpayers who may have struggled to adhere to previous arrangements. For these rescheduled debts, the tax collector will reconstitute the debt amount as it stood on December 31, 2025, ensuring that the settlement is based on the original outstanding principal.
Taxpayers with debts under a payment plan, established in 2026 according to Article 156 of the Tax Procedures Code, are now permitted to cease their current plan and opt into the settlement system. This flexibility allows taxpayers to choose the most beneficial pathway for resolving their debts. To join the settlement system for these debts, payment of 70 percent of the principal debt is required before December 31, 2026. All amounts already paid during 2026 will be accounted for when a taxpayer chooses to join the settlement system under these conditions, ensuring that prior payments are credited towards the new settlement amount.
Tax debts secured by a legal mortgage registered by December 31, 2025, are also eligible for the provisions outlined in Article 122 of the Finance Law for 2026. This inclusion provides a clear mechanism for resolving such secured debts. Upon the taxpayer paying 70 percent of the principal debt, the tax collector will lift the associated mortgage, releasing the property from the encumbrance. Following this payment and the issuance of an administrative decision, the remaining 30 percent of the principal debt will be cancelled, providing substantial financial relief. All associated fines and increases for these mortgaged debts are cancelled under the new system, eliminating additional penalties.
Procedures for File Transfers and Older Debts
The expanded tax debt settlement system allows for the recovery of surplus amounts for taxpayers who paid more than the amount due, ensuring that no taxpayer is unfairly disadvantaged. The tax administration has also clarified procedures for lifting legal mortgages, transferring tax files, and settling debts paid by rejected checks, streamlining administrative processes. Taxpayers wishing to transfer their tax files to another regional jurisdiction must pay the remaining 70 percent of the principal debt before the transfer is completed, ensuring that outstanding obligations are addressed prior to administrative changes.
Debts paid before 2026 via rejected checks are considered uncollected until December 31, 2025, and can benefit from the settlement system. This provision acknowledges the challenges associated with bounced checks and offers a path to resolution. Debts registered up to 2011 benefit from automatic cancellation, providing a clean slate for very old obligations. Tax extract statements for debts registered up to 2011 must include the phrase 'tax debts in the process of cancellation under Article 122 of the Finance Law for 2026', ensuring transparency and clarity in official documentation. For debts registered between 2012 and 2025, a 'nothing due' tax extract statement can only be issued after paying 70 percent of the principal debt and receiving an individual decision granting a 30 percent reduction. All fines and increases are fully cancelled for debts registered between 2012 and 2025 after meeting settlement conditions, offering a full resolution for these obligations. For these fees registered in 2011 and prior, tax collectors are exempted from listing them individually on collective lists, simplifying administrative tasks for older, automatically cancelled debts.