Tax rates in Tunisia

Company Tax

15%

Tax Rate For Foreign Companies

Resident companies are taxed on all their income (national and international) while non-resident companies are only taxed on income earned in Tunisia.
Tunisia does not provide for a unilateral foreign tax credit.
A branch of a foreign company is subject to the same accounting and tax obligations as a domestic company.

Capital Gains Taxation

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.

Main Allowable Deductions and Tax Credits

All taxes due by the company are considered as tax-deductible charges, except corporate income tax and social solidarity contributions. Interest expenses relating to loans contracted by the company and necessary for its proper functioning are tax-deductible, whereas fines and penalties are not (unlike contractual penalties). Interest expenses, including commissions and bank charges, incurred from company loans essential for its operations are eligible for tax deduction. Additionally, interest expenses on shareholders' current accounts are deductible, capped at a maximum rate of 8%, provided the capital is fully paid and the remuneration does not exceed 50% of the capital; however, this 8% rate does not apply to banks.

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).

A foreign tax credit is available for companies that are residents of countries that have signed a double taxation agreement with Tunisia.
Charitable contributions are either fully deductible (in cases where they are granted notably to the state, local authorities and state-owned companies, and to organisations dedicated to disability promotion), or within 0.2% of the revenue in other cases.

The 2024 Finance Law grants newly established enterprises a four-year exemption from corporate income tax (CIT) and personal income tax (PIT) if they submit an investment declaration in 2024 or 2025. This initial-year exemption begins from the date of commencement of activities and concludes on December 31 of the same year. These enterprises must commence operations within two years from obtaining the investment declaration and adhere to Tunisian accounting standards. Companies in Regional Development areas eligible for CIT deductions on profits from investments over five or ten years can enjoy the four-year exemption before the full deduction period of five or ten years. However, certain blacklisted activities are excluded from this PIT/CIT exemption.

Other Corporate Taxes

Municipalities levy a real estate tax (RET), with rates varying. A Local authority tax (LAT) is paid to the local authority at the rate of: 0.2% of the total turnover of the entity, with a minimum calculated on the basis of the number of square metres of construction used by the entity; 0.1% of the turnover deriving from exportation as defined by the legislation in force.

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).
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 TND 500 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 TND 400 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 TND 200 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 lodging tax, calculated at 1% of the gross amount of salaries paid to its employees, including benefits in kind.

Tunisia's parliament has approved the Finance Law for 2024. The main measures in the law include an increase in the tax on the turnover of tourist restaurants, second and third category cafes, and tea halls from 1% to 3%, along with extending this tax to tourist accommodations, bars, and manufacturers of soft drinks and alcoholic beverages. Additionally, there is an increase in the tax on the turnover of nightclubs and clubs not affiliated with a tourist institution from 3% to 5%. The law also expands the scope of the tax on tourist accommodation and raises the nightly rate for foreigners from TND 1 to TND 4 for 2-star accommodations, from TND 2 to TND 8 for 3-star accommodations, and from TND 3 to TND 12 for 4-star and 5-star accommodations, with the maximum tax now calculated on 15 consecutive nights instead of 7. Furthermore, the law introduces a temporary 4% contribution on the taxable profits of banks, financial institutions, and insurance and reinsurance companies for 2024 and 2025, with a minimum annual contribution of TND 10,000.

Other Domestic Resources

General Tax Directorate (DGI)

Tax Rate

Allowable Deductions and Tax Credits

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 include one of the guarantees specified by law, up to a limit of TND 100,000, with the deduction subject to a minimum personal income tax (PIT) amounting to 45% of the PIT due on the income before the deduction. Additionally, interest earned on housing savings contracts is exempt from PIT.

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.

Special Expatriate Tax Regime

Residents are taxed on all their income (national and international) while non-residents are only taxed on income earned in Tunisia.
For non-Tunisian tax resident individuals, employment income sources in Tunisia are subject to a withholding tax to be applied by the Tunisian established debtor, with rates varying depending on the nature of income.
Foreign employees recruited by totally-exporting companies and employees working in Tunisia for a period or periods not exceeding six months per fiscal year may benefit from the payment of PIT at the reduced rate of 20% of gross revenues. This provision applies also to companies based in Free Trade Zone, financial institutions working mainly with non-Tunisian residents, and certain oil & gas companies.