Skip to content

Tunisia

Country Name: Republic of Tunisia
Currency: Tunisian Dinar (TND)
Primary Tax Authority: General Directorate of Taxes (Direction Générale des Impôts, DGI)
Key Legislation:

  • Income Tax Code
  • Value Added Tax (VAT) Law
  • Investment Code
  • Customs Code
  • Tax Procedures Code

Fiscal Authority Allocation

Centralized Fiscal System:
Tunisia operates a centralized tax system. The General Directorate of Taxes (DGI) under the Ministry of Finance is responsible for the administration and collection of taxes, including corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and customs duties.

Corporate Income Tax (CIT)

Standard Rate: 15% for most sectors, 35% for certain sectors such as banking, oil, and telecommunications
Tunisia imposes a standard corporate income tax rate of 15%, with higher rates of 35% applying to companies in specific sectors such as oil, banking, telecommunications, and insurance.

Corporate Forms and Taxation:

  1. Resident Companies: Taxed on worldwide income.
  2. Non-Resident Companies: Taxed only on Tunisia-sourced income.

Exemptions and Incentives:

  • Investment Incentives: Tunisia offers tax holidays, reduced CIT rates, and customs duty exemptions to companies investing in priority sectors such as manufacturing, agriculture, tourism, and renewable energy. Companies operating in the industrial and export-oriented sectors may benefit from reduced tax rates or tax exemptions for up to 10 years under the Investment Code.
  • Free Zones: Companies operating in Tunisia’s free zones benefit from CIT exemptions for the first 10 years and VAT and customs duty exemptions.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 19%
Tunisia imposes VAT at a standard rate of 19% on most goods and services. VAT is applied to domestic production and imports.

Reduced Rates:
Reduced VAT rates of 13% and 7% apply to certain goods and services, such as pharmaceuticals, hotel services, and food products.

Exemptions:
Certain essential goods and services, such as healthcare, education, and financial services, are VAT-exempt. Exports are zero-rated, allowing businesses to claim VAT refunds on inputs used in producing export goods.

Personal Income Tax (PIT)

Progressive Rates:
Tunisia applies a progressive personal income tax system to residents’ worldwide income and non-residents’ Tunisia-sourced income.

Resident Tax Rates for 2023 (Annual Income):

  • Up to TND 5,000: 0%
  • TND 5,001 to TND 20,000: 26%
  • TND 20,001 to TND 30,000: 28%
  • Above TND 30,000: 35%

Non-Resident Tax Rate:
Non-residents are taxed at a flat rate of 20% on Tunisia-sourced income.

Deductions and Allowances:
Taxpayers may deduct contributions to social security, pension funds, medical expenses, and mortgage interest from taxable income.

Additional Mandatory Contributions

Social Security Contributions:
Employers and employees must contribute to Tunisia’s social security system, which provides pensions, healthcare, and unemployment benefits.

  • Employer Contribution: 16.57% of gross salary.
  • Employee Contribution: 9.18% of gross salary.

Withholding Taxes

  • Dividends: 10%
  • Interest: 20%
  • Royalties: 15%
    Tunisia imposes withholding taxes on payments to non-residents, including dividends, interest, and royalties. These rates may be reduced under Tunisia’s double taxation agreements (DTAs).

Transfer Pricing Rules

Tunisia follows the arm’s-length principle for transactions between related parties. Transfer pricing documentation is required for large companies with cross-border transactions. The documentation must demonstrate that prices charged between related parties reflect market value.

Special Tax Regimes

  • Free Zones: Companies in free zones benefit from a 10-year CIT exemption, followed by a reduced CIT rate of 15%, as well as exemptions from VAT and customs duties on imported goods and equipment.
  • Investment Incentives: Tunisia offers tax holidays and reduced tax rates for companies investing in key sectors like manufacturing, agriculture, renewable energy, and ICT (information and communications technology). Incentives may include CIT exemptions, customs duty reductions, and VAT deferrals.

Other Taxes

  • Customs Duties: Tunisia imposes customs duties on imports, with rates ranging from 5% to 36% depending on the type of goods. Certain essential goods and raw materials benefit from reduced or zero customs duties.
  • Excise Taxes: Excise taxes are levied on products such as alcohol, tobacco, petroleum products, and luxury items. Rates vary based on the product.
  • Property Tax: Tunisia imposes property taxes on land and buildings, collected by local authorities. Rates vary depending on the location and use of the property.

Double Taxation Agreements (DTAs)

Tunisia has signed several double taxation agreements (DTAs) with countries such as France, Italy, and Germany. These agreements help reduce withholding taxes on cross-border income and prevent the double taxation of income earned in Tunisia and other jurisdictions.

Local Taxes

Local governments may impose minor taxes, such as property taxes, business license fees, and municipal service taxes. However, most major taxes, including CIT, PIT, and VAT, are centrally administered by the General Directorate of Taxes (DGI).

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed by April 25th of the year following the end of the financial year. Personal income tax returns are generally due by April 30th. VAT returns are filed monthly or quarterly, depending on the size of the business.

Penalties for Late Filing:
Penalties for non-compliance or late filing include fines and interest on unpaid taxes. Interest is charged at a rate of 0.5% per month on overdue taxes, with additional fines for late or incomplete filing.

Recent Developments

Focus on Digital Economy:
Tunisia has introduced measures to promote investment in the digital economy, including tax incentives for ICT companies and startups. Companies involved in software development, IT services, and e-commerce may benefit from reduced CIT rates and VAT exemptions.

Infrastructure and Renewable Energy:
To boost economic growth, Tunisia is offering tax incentives to companies investing in infrastructure and renewable energy projects. These incentives include CIT holidays, VAT exemptions, and customs duty reductions on imported materials and equipment.

Reform of Tax Administration:
The Tunisian government is working to modernize tax administration, with a focus on improving compliance and transparency. Measures include the digitalization of tax filing and payment systems and the introduction of electronic invoicing for businesses.

Subscribe to my free newsletter for regular updates on law, taxation and business worldwide.

Tags: