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.

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.

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 on shareholders current account are tax-deductible within the limit of the maximum rate of 8% (conditions apply).

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.

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.

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).
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.

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 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.

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.