of services whose use is intended for abroad are subject to corporate income tax at a rate of 15%. These measures apply to profits made from 1 January 2021, which will be declared during 2022 and subsequent years. Only companies subject to corporate income tax at a rate of 35% can benefit from the reduction of their corporate income tax rate to 20% for five years when their ordinary shares are admitted to listing on the Tunis Stock Exchange, provided that the rate of openness of capital to the public is at least equal to 30%, or on the alternative market, provided that the opening percentage of capital to informed investors is at least equal to 30%.
(b) Payments to beneficiaries resident in low-tax jurisdictions are subject to a 25% rate.
(c) This tax applies to payments to residents and nonresidents.
(d) The rate is 10% for interest paid on loans made by nonresident banks.
(e) This tax applies to payments to nonresidents. For further details, see Section B.
(f) The applicable rate depends on the nature of the beneficiary and service.
(g) Management fees paid to residents are subject to withholding tax at a rate of 0% if the amount does not exceed TND1,000 and if they do not represent fees. Management fees that do not represent fees in return for intellectual services and that are paid to residents are subject to withholding tax at the following rates:
• 0.5% if the profits of the payment recipient are subject to corporate income tax at a rate of 10%
• 1% if the profits of the payment recipient are subject to corporate income tax at a rate of 15%
• 1.5% if the profits of the payment recipient are subject to corporate income tax at the rate of 35%
If management fees paid to residents are related to fees in return of intellectual services, they are subject to withholding tax at a rate of 3%. Management fees paid to nonresidents are subject to withholding tax at a rate of 15%, subject to the provisions in double tax treaties.
(h) See Section B.
B. Taxes on corporate income and gains
Corporate income tax. Companies are subject to tax on profits derived from establishments located in Tunisia and on profits that are deemed to be derived in Tunisia under double tax treaties.
Tunisian-source income that is not realized within the framework of a Tunisian establishment, such as royalties, is subject only to final withholding taxes (see Royalties).
Tax rates. The new standard rate of corporate income tax that applies to income realized on or after 1 January 2021 is 15%.
Profits resulting from the provision of services mentioned in Section 130.1 of the Hydrocarbons Code and the provision of hydrocarbon transport services to companies operating within the framework of the related legislation, as well as banks, financial institutions (for example, insurance companies, including mutual insurance companies), telecommunication companies, car dealers, large commercial enterprises (rules applicable starting from 1 January 2020 to be reported in 2021 and following years), and franchisees of foreign brands and marks (for which the integration level is equal to or greater than 30%), are subject to corporate income tax at a rate of 35%.
The tax advantage relating to the reduction of corporate income tax for companies introduced to the Tunis Stock Exchange that are not subject to corporate income tax at a rate of 35% was removed by the 2021 Finance Act. Only companies subject to corporate income tax at a rate of 35% can benefit from the reduction of their corporate income tax rate to 20% for five years when their ordinary shares are admitted to listing on the Tunis Stock Exchange, provided that the rate of openness of capital to the
public is at least equal to 30%, or on the alternative market, provided that the opening percentage of capital to informed investors is at least equal to 30%. These measures apply to profits made from 1 January 2021, which will be declared in 2022 and subsequent years.
The following companies are subject to corporate income tax at a rate of 10%:
• Artisanal, fishing, agricultural and fisheries vessels equipment companies
• Purchasing offices for retail sales companies organized in the form of cooperatives
• Service cooperatives formed between producers for the wholesaling of their production
• Consumer cooperatives governed by the general statute of cooperation
• Commercial and industrial projects benefiting from the youth employment program or the national promotion fund for crafts and small trades
Based on the 2023 Finance Act, the following companies are subject to corporate income tax at a rate of 15% (instead of 10%):
• Private health and hospital companies
• Private education companies
• Vocational training and scientific research companies
• Private dorms companies
As of 2023, tax incentives granted to private health and hospital companies related to offering their services to nonresidents are eliminated.
As of 1 January 2021, all transitional regimes granting tax advantages for exports in terms of direct taxes are eliminated from the Tunisian tax system.
As of January 2022, the value-added tax (VAT) suspension regime for exporting service companies and international trade companies is eliminated. The VAT suspension regime no longer covers the following companies:
• Fully exporting service companies and fully exporting international trade companies
• Service companies and international trade companies whose turnover from exports or sales under tax suspension exceeds 50% of their total turnover
• Service companies and international trade companies that carry out import and local acquisition activities of materials, products and services necessary for the performance of export activities
Before the enactment of the 2022 Finance Act, sales and services and products in the local market by industrial fully exporting companies operating in Tunisia could not exceed 30% of the total turnover. However, the 2022 Finance Act increased this percentage to 50%, starting from 2022.
Under the 2023 Finance Act, wholly export-oriented manufacturing companies are allowed to sell on the local market 50% of the 2019 fiscal year export sales.
Service companies in the hydrocarbons sector as well as sales and provision of services whose use is intended for abroad are
from the tax incentives provided by the PITCITC, remain subject to the legislation in force before 1 April 2017, provided that the investments become effective no later than 31 December 2025.
• Financial relief under the Tunisia Investment Code (Code d’incitations aux investissements, or CII) (Paragraph 3 of Article 20 of the LRDAF): Investment in the capital companies that obtained a depositary certificate of investment declaration deposit before 1 April 2017, qualifying for tax incentives under the CII, remain subject to the provisions of that code, provided that the subscribed capital is paid-up no later than 31 December 2017, and the relevant investment becomes effective no later than 31 December 2025.
• Physical relief under the CII (Paragraph 4 of Article 20 of the LRDAF) Reinvestment operations of profits within the same company, qualifying for tax incentives under the CII and having received a depositary certificate of investment declaration deposit before 1 April 2017, remain subject to the provisions of that code, provided that the effective start date of the operation occurs no later than 31 December 2025.
Social Contribution of Solidarity.
The 2018 Financial Act introduced a new Social Contribution of Solidarity (SCS) for the companies and enterprises subject to corporate income tax, as well as companies not subject to corporate income tax.
This contribution is imposed at a rate of 1% of the taxable income and profits. The amount due for companies not subject to corporate income tax is TND200.
The SCS applies to income and profits realized on or after 1 January 2018.
Under the 2023 Finance Act, the following SCS rates apply in 2023, 2024 and 2025:
• 4% for companies subject to corporate tax rate at 35% with a minimum SCS of TND500.
• 3% for companies subject to corporate tax rate at 20% and 15% with a minimum SCS of TND400.
• 3% for companies subject to corporate tax rate at 10% with a minimum SCS of TND200.
• No SCS rate for entities taking advantage of tax holidays or tax relief of 100% of operating income but a minimum SCS of TND400 is required.
• 3% for Tunisian banks and financial institutions, nonresident banks and financial institutions operating within the framework of the code of financial services provisions for nonresidents, and insurance and reinsurance companies, including mutual insurance companies, Takaful insurance and participants funds (a type of Islamic finance instrument), which are subject to a corporate tax rate at 35%.
• 2% for other persons subject to the 35% corporate tax rate. However, for large commercial areas (supermarkets or hypermarkets), the CSS increase applies to profits reported during 2021 and 2022.
New temporary contribution. Article 64 of the 2024 Finance Act has established a new temporary contribution for the benefit of
C. Determination of trading income
General. Taxable income is based on financial statements prepared in accordance with generally accepted accounting principles (GAAP), subject to certain adjustments.
Business expenses are generally deductible unless specifically disallowed by the tax law. Expenses that are deductible include, but are not limited to, the following:
• All types of expenses relating to production or the operation of a business, such as salaries and wages, and raw materials.
• Tax depreciation (see Tax depreciation).
• Attendance fees paid to members of the board of directors or the supervisory board.
• Interest paid to shareholders on loans if the amount of the loan does not exceed 50% of authorized capital, if the interest rate does not exceed 8% and if the share capital is fully paid up.
• Donations and subsidies paid to charities and organizations established for the public good that are engaged in philanthropic, educational, scientific, social or cultural activities, up to a maximum deduction of 0.2% of gross turnover.
• Research and development (R&D) expenses incurred within the framework of agreements concluded for this purpose with public scientific research establishments or public higher education and research establishments on the condition that the participation of companies in the total expenses is not lower than 10%. They are deductible at a rate of 50% and within a limit of TND400,000 as per the green, blue and circular economy and sustainable development in accordance with Article 27 of the 2023 Finance Act.
• Innovation expenses deductible at a rate of 50% and within a limit of TND400,000 per year in accordance with Article 27 of the 2023 Finance Act. The application term will be provided by means of a decree.
• Amounts paid to social funds established for employees in accordance with the law.
• Gifts and meal expenses, up to a maximum deduction of the lower of 1% of annual gross income or TND20,000.
• Sponsorships allocated to the incorporation and the maintenance of green spaces as well as family and rural parks, within the framework of conventions concluded to this effect with the ministry in charge of the environment or the ministry in charge of infrastructure and housing, are deductible in determining the base subject to corporate income tax, up to the threshold of TND150,000 per year.
Expenses that are not deductible include, but are not limited to, the following:
• Fines, forfeitures and penalties of any kind, as well as transactions designed to avoid the application of higher penalties
• Charges on passenger cars of more than nine horsepower
• Expenses related to aircraft, pleasure craft and second homes
• Expenses amounting to over TND5,000 that are paid in cash
• Charges invoiced by persons established in low-tax jurisdictions
Under the 2023 Finance Act, tax measures governing the revaluation of assets with the local GAAP are aligned through the following actions:
• It applies to all companies, including those operating in the financial sector, energy sectors (except renewable energies), mining, real estate development, on-site consumption, trade and telecommunications.
• It is not subject to the realization of an investment operation within the scope of the Investment Law. The 2024 Finance Act only requires the “submission, in support of the annual tax return for the year of the deduction of a certificate issued by the competent bodies under the Ministry responsible for energy proving the category of the said equipment and materials.” It must be the National Energy Management Agency, which, under Article 17 of Law No. 2004-72 of 2 August 2004 on energy management, is responsible for “granting certificates for equipment, materials and products contributing to the rational use of energy or related to renewable energies, in order to benefit from the advantages provided by current legislation and regulations.”
• It does not require a minimum of an equity financing (that is, investment entirely funded by debt gives right to the new benefit).
Relief for losses. Losses may be carried forward five years, but may not be carried back. However, losses related to depreciation may be carried forward indefinitely.
Groups of companies. Tunisian law provides for the fiscal integration of related parties equivalent to a consolidated filing position if certain conditions are satisfied.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax
Value-added tax, on all transactions carried on in Tunisia, including imports
rate
Local tax (TCL); imposed on local turnover and exportations
Professional training tax, on salaries, allowances and fringe benefits paid by an employer
Housing tax (FOPROLOS); on salaries, allowances and fringe benefits paid by employers
Social security contributions, on employee’s annual salary; paid by
Registration duties
Work contracts TND30 per contract
Business contracts 0.5% of the contract value
Company formation Constitution acts of companies or GIEs (a GIE is a type of tax-transparent entity) are subject to a mandatory registration duty of TND150
E. Miscellaneous matters
Foreign-exchange controls. For companies wholly or partially owned by nonresidents, the remittance of benefits, dividends, attendance fees and interest payments to nonresidents is guaranteed. Tunisian branches of foreign companies may freely remit their after-tax profits. Remittances must be made through a registered intermediary, which is generally a bank. Tunisian banks may obtain foreign loans not exceeding TND10 million a year. Tunisian companies other than banks may obtain foreign loans up to TND3 million per year.
Transfer pricing. The 2019 Finance Act established new rules for the determination of transfer prices and a new definition of entities’ dependency and control.
For the purpose of determining the tax due by resident or established enterprises in Tunisia that are dependent on or control other enterprises belonging to the same group, the profits indirectly transferred to such enterprises either by raising or lowering the prices of transactions, or by any other means, are incorporated into the results of these enterprises.
Indirectly transferred profits are determined by comparison with those that would have been realized in the absence of any arm’slength or control relationship. The condition of dependence or control referred to above is not required if the transfer of profits is made with enterprises resident or established in a state or territory whose tax system is privileged.
Dependency or control relationships are deemed to exist between companies if either of the following circumstances exists:
• One company directly or indirectly holds more than 50% of the share capital or voting rights of another enterprise or exercises the decision-making power of such enterprise.
• Companies are subject to the control of the same undertaking or the same person under the conditions mentioned in the first bullet above.
In addition, Article 30 of the 2019 Finance Act, as amended by the 2021 Finance Act, provides that companies resident or established in Tunisia that are controlled by other companies or that control other companies under Article 48 Septies of the PCITC and whose gross annual sales exclusive of any turnover taxes is equal to or greater than TND200 million are required to submit an annual transfer-pricing declaration within the time frame for filing the annual corporate income tax return by using reliable electronic means according to a model established by the administration. In addition, these entities must present to the tax authorities the transfer-pricing documentation when requested during a comprehensive tax audit. Under the 2021 Finance Act, only cross-border controlled transactions of which the amount exceeds TND100,000 must be reported within the annual Transfer Pricing Declaration and have to be covered by the transfer-pricing documentation.
The amendment affecting Article 48 Septies of the PCITC as well as the obligation to document transfer pricing applies to fiscal years beginning on or after 1 January 2020, provided that the requirements are the subject of a notice on or after 1 January
2021. The amendment concerning the transfer-pricing annual return applies to fiscal years beginning on or after 1 January 2020 (the first declaration must be filed in 2021).
Country-by-country reporting. Companies that are established in Tunisia and that fulfill all of the conditions fixed by the law are required to file within 12 months after the year-end date by any reliable electronic means, a Country-by-Country Report, based on a model established by the tax administration. The countryby-country declaration is subject to reciprocity through the automatic exchange with the states that have concluded an agreement with Tunisia for this purpose. These provisions are effective for financial years beginning after 1 January 2020.
E-commerce. Under the 2020 Finance Act, companies nonresident in Tunisia selling information technology solutions and internetbased services are subject to a royalty of 3% of the turnover earned from resident individuals and corporate entities. These nonresident companies must file a report regarding their abovementioned turnover on a quarterly basis. Reporting and payment procedures will be established by a governmental decree.
F. Treaty withholding tax rates
(bb) The 10% rate applies if the beneficial owner of the dividends is a company that holds directly at least 25% of the capital of the payer.
(cc) The 5% rate applies to royalties paid for the use of, or the right to use, copyrights of literary, scientific or artistic works including cinematographic and television films. The 15% rate applies to royalties or other amounts paid for the following:
• The use of patents, designs and models, plans, and secret formulas and processes
• Information relating to industrial, commercial or scientific experience
• Technical or economic studies
• Technical assistance
• The use of, or the right to use, trademarks and industrial, commercial or scientific equipment
(dd) Dividends are exempt from tax if the beneficial owner of the dividends is a company that holds at least 25% of the capital of the payer.
(ee) The 10% rate applies if the beneficial owner of the dividends is a company that holds directly at least 25% of the capital of the payer.
(ff) This rate is 25% if the beneficiary is resident in a jurisdiction listed as a low-tax jurisdiction in the Ruling of the Minister of Finance dated 25 March 2019. Persons are resident or established in a low-tax jurisdiction or state if the tax due in that state or jurisdiction is less than 50% of the personal income tax or corporate income tax due in Tunisia for the same activity. The following are categories of low-tax states or jurisdictions:
• States or jurisdictions in which the corporate income tax rate is less than 5% for activities subject to tax at the rate of 10% in Tunisia
• States or jurisdictions in which the corporate income tax rate is 12.5% for activities subject to tax at a rate of 25% in Tunisia
• States or jurisdictions in which the rate is 17.5% for activities subject to tax at a rate of 35% in Tunisia
The Ruling of the Minister of Finance dated 25 March 2019 provides listings of the states or jurisdictions falling into the above categories.
(gg) The 5% rate applies if the beneficial owner of the interest is a bank or other financial institution. The 10% rate applies to other interest.
(hh) The 5% rate applies to payments for technical assistance.