IFU or real regime: which tax regime should you choose in 2026?

Three regimes, depending on turnover and activity

In Algeria, an individual entrepreneur falls under the single flat-rate tax (IFU) as long as annual turnover does not exceed DZD 8,000,000 and the activity is not excluded from it. Above that, or for certain activities, the real regime applies. Companies (SARL, EURL, SPA…) always fall under the real regime, whatever their turnover. Auto-entrepreneur status is a lighter form of the IFU reserved for small activities.

The IFU: a simple tax based on turnover

The IFU replaces income tax (IRG), VAT and the local solidarity tax with a single tax. It is calculated on turnover, not on profit:

• 5% for producing and selling goods
• 12% for other activities, including services and liberal professions
• A minimum of DZD 30,000 per year, even if the activity earns little
• A provisional return before 30 June, then a final return before 20 January of the following year
• No VAT to charge, but no expenses are deducted

Activities excluded from the IFU

Some activities must use the real regime whatever their turnover, including:

• Importing goods for resale as is, and wholesale trade
• Property development and land subdivision
• Public works, hydraulic works and construction
• Classified restaurants and hotels, caterers
• Vehicle and equipment rental, travel, advertising and communication agencies
• Training and education, private clinics and laboratories

Auto-entrepreneur: 0.5% of turnover

Created by Law 22-23 of 18 December 2022, auto-entrepreneur status covers activities on the ANAE list, with annual turnover of DZD 5,000,000 at most. The IFU is 0.5% of turnover, with a minimum of DZD 10,000 per year. For social security, auto-entrepreneurs can choose to pay a flat DZD 24,000 per year to CASNOS. It is by far the lightest regime for starting out alone.

The real regime: a tax on profit

Under the real regime, tax is charged on profit, meaning turnover minus expenses. Full accounts are mandatory and VAT (19%, or 9% for some operations) is charged to customers.

• Individual entrepreneur: IRG on the progressive scale, from 0% up to DZD 240,000 of income to 35% above DZD 3,840,000
• Company: corporate tax (IBS) of 19% (production of goods), 23% (construction, hydraulics, tourism except travel agencies) or 26% (other activities)
• Minimum tax: DZD 10,000 per year
• Dividends paid to resident partners: 10% withholding since the 2026 Finance Act (previously 15%)

How to choose?

The IFU pays off when your expenses are low: you pay a fixed percentage of turnover without keeping full accounts. The real regime becomes worthwhile when expenses are high (purchases, rent, salaries), because only profit is taxed. Note: below the IFU threshold, opting for the real regime is irrevocable and must be requested before 1 February or when the activity starts. The safest approach is to compare with your own figures.

What about social contributions?

Self-employed people contribute to CASNOS: 15% of income, with an annual contribution between DZD 43,200 and DZD 864,000 since Executive Decree 26-257 of July 2026. This cost comes on top of tax, whatever the tax regime.