Tunisia: Business Environment
A reduced rate of 7% applies to: the transport of goods; activities carried out by doctors and analytical laboratories; charging equipment for electric motor vehicles; materials and supplies for pharmaceutical products; tourism activities.
The following transactions are subject to a 13% reduced rate:
Additionally, there are specific tax regulations for the sales of buildings constructed for housing purposes:
Exports and related services are zero-rated.
The Finance Law 2023 states the objective of limiting VAT rates to two levels (19% and 7%) and gradually phasing out the 13% rate:
Starting from 2023, the following activities are be subject to a 19% tax rate instead of 13%:
Additionally, medical and cosmetic surgery services will now be taxed at a 19% VAT rate instead of 7%.
Capital gains are included in ordinary income and are taxed at the regular corporate income tax rate. Gains are calculated as the difference between the sale price, which is supposed to be equal to the fair market value, and the net book value. In case of a merger, capital gains arising from the transfer of assets, other than inventories, are deductible from the taxable income of the merged company and are to be added back to the taxable income of the absorbing company at up to 50% of their amount, spread out over five years.
In the case of mergers, the merged company can deduct a portion of the capital gains resulting from transferring assets (excluding inventories) during a merger. This deduction applies to the merged company's taxable income. However, the absorbing company must add back up to 50% of the deducted capital gains to its taxable income. This addition is done gradually over five years.
According to Tunisian tax laws, tax losses are divided into two categories: operating losses and deferred depreciation. Operating losses can be carried forward for a maximum of five years, beginning from the year following the year they were recorded. On the other hand, deferred depreciation can be carried forward indefinitely, starting from the year following the one in which it was recorded. Carrying losses back to previous years is not allowed.
The allowance for bad debt is deductible up to 50% of taxable income (after deducting non-taxable income and adding back non-deductible costs).
Recently established companies can claim a tax exemption in the first four years of activity (total exemption in the first year, 75% in the second year, 50% in the third year and 25% in the fourth year; subject to conditions). Start-up costs are also fully deductible.
Stamp duties are generally due on certain contracts expressly designated and on invoices (TND 1 for invoices). The registration of some operations is compulsory. In these cases, the registration fees are expressly determined by the Registration and Stamp Fees Code. Some transactions are subject to proportional registration fees (5% for property transfer taxes, 3% for the acquisition of social housing from real estate developers for the portion exceeding TND 500,000 - 2.5% in the case of a transfer of business).
A hotel tax is due by entities that work with tourists; provide accommodation, food, and beverages; or organise leisure activities for clients, at a rate of 2% of the gross turnover generated from tourism and related activities. A Tourism Sector Development Fund tax is levied on entities operating in the tourism sector at a rate of 1% of turnover (excluding VAT).
According to the Finance Law 2022, stamp duty of 100 millimes per receipt issued to customers is due by large commercial areas and multi-department stores that are under the Large Businesses Direction (DGE) or to the Medium-Sized Businesses direction), and operators of a brand or a foreign commercial sign.
The Tunisian social security system is financed by contributions from both employers (16.57%, reduced to 16.07% for wholly exporting companies) and employees (9.18%) based on salaries. Employers are also required to pay a premium for workplace injuries ranging from 0.4% to 4% of earnings. Employers collect social security contributions from each employee and pay on their behalf. Contributions to the CSS were increased with the Finance Law 2023, as follows:
4% with a minimum of 500DT for companies subject to a 35% corporate tax rate (banks, insurance companies, telecommunications operators, companies operating in the oil sector, hypermarkets, etc.).
3% with a minimum of 400DT for companies subject to the normal corporate tax rate of 15% and a 20% tax rate for companies going public through an initial public offering (IPO).
3% with a minimum of 200DT for companies subject to a reduced corporate tax rate of 10%. This applies specifically to companies in the agriculture or fishing sectors.
Companies are also subject to vocational training tax (2% of the gross amount of salaries; 1% for manufacturing industrial companies).
Employers established in Tunisia, regardless of being liable or not for income tax, are subject to a social logging tax, calculated at 1% of the gross amount of salaries paid to its employees, including benefits in kind.
Tunisia | Middle East & North Africa | United States | Germany | |
Number of Payments of Taxes per Year | 8.0 | 20.8 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 144.0 | 204.0 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 60.7 | 32.1 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Income tax (IR) | Progressive rate from 0 to 35% |
TND 0 - 5,000 | 0% + 0.5% solidarity contribution (not due from whose individuals whose annual net income does not exceed TND 5,000) |
TND 5,001 - 20,000 | 26% + 0.5% solidarity contribution |
TND 20,001 - 30,000 | 28% + 0.5% solidarity contribution |
TND 30,001 - 50,000 | 32% + 0.5% solidarity contribution |
Over TND 50,000 | 35% + 0.5% solidarity contribution |
Certain deductions are allowed: for the family chief it is TND 300; for dependent children TND 100 per child for up to four dependent children. A deduction of TND 2,000 per disabled child is available.
A deduction is available for each taxpayer's dependent parent (capped at 5% of the taxable income with a maximum of TND 450 per dependent parent).
A deduction is available at an amount of TND 1,000 per child who is pursuing higher education without any scholarship and who is younger than 25 years of age on 1 January of the tax year.
Life insurance premiums are deductible if the insurance contracts contain one of the guarantees listed by the law (conditions apply).
10% of professional fees may be deducted (capped at TND 2,000 per year).
Exemptions are available for:
- interest on deposits or stocks in foreign currency or convertible dinars;
- interest on house purchase savings accounts;
- interest on special savings accounts or debentures, within a certain limit;
- dividends paid by resident companies, if the annual total is below TND 10,000.
Revenues derived from activities that are subject to corporate income tax at the reduced rate of 10% are 2/3 deductible from the personal income tax income; whereas those derived from activities that are subject to CIT at the reduced rate of 13.5% are 1/2 deductible.
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Latest Update: September 2023