Mechanical, electronic industries: New preferential regime without CKD lots

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ALGIERS- The complementary finance bill (PLFC) 2020, which will soon be submitted to Parliament for debate, provides for a new preferential regime aimed at reviving the mechanical, electronic and electrical industries, through tax exemptions and exemption from customs duties, while excluding collections intended for the automotive assembly and assembly industry (CKD).

Operators in the mechanical and electronic industries and household appliances will benefit from an exemption from the duties of Customs and Value Added Tax (VAT) on raw materials imported or purchased locally, as well as on components purchased from subcontractors, in accordance with article 61 of the PLFC 2020.

Imported materials and components will be recorded in a qualitative list for each fiscal year, as part of a technical assessment decision granted by the Minister of Industry, which the authorized operator will be required to submit to customs and tax administration.

All assemblies, sub-assemblies and accessories imported separately, or grouped, by the operators having reached the integration rate set in the specifications of their industry are subject to the 5% customs duty rate and the 19% VAT rate.

This new measure aims to encourage operators to achieve a national integration rate that leads to the emergence of real industries instead of the current installation, through two separate regimes.

The first regime concerns raw materials or semi-finished purchased locally or from abroad by producers for the purpose of their integration into production.

The second regime relates to components not integrated into products having achieved the integration rate requested in the specifications of each sector concerned by these preferential arrangements.

APS

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