Investment Opportunities

Value-added tax (VAT)

With the exception of the agricultural activities, the VAT applies to all the industrial, handicraft production and of service activities.

The VAT paid on the purchases is deductible from the VAT collected on the sales turnover.

The products are taxed at modulated rates of VAT :

• 6% for the products of social, medical and educational aspect
• 10% for the production equipment with no equivalent manufactured locally, tourism, transport, average and low tension electricity, liberal professions, training, subscriptions to the Internet network
• 18% for the production equipment with equivalent manufactured locally, raw materials, semi-finished products and non-food consumer goods
• 29% on luxury products

Corporate tax (IS)

Are liable to corporate tax :

• Capital companies and the like resident in Tunisia (SA, SUARL, SARL, Small Limited Compagny, co-operatives, industrial or commercial public institutions)
• Foreign companies exerting taxable activities in Tunisia
• Foreign companies non-resident in Tunisia, at a rate of some of their incomes (copyright royalties, interests, and fees of studies or technical aid, commissions)
• Rate of the corporate tax: The general rate is 35%. A rate reduced to 10% applies to the companies engaged in handicraft activity, agricultural, fishing or co-operatives
• Minimal Imposition: Whatever the taxable net income, the company subjected to the tax mode of common right is indebted to IS for a minimum of 0,5% of the sales turnover up to a maximum of 2.000 TD
• Flat imposition rate: A flat rate is imposed on small service companies with sales turnover not exceeding 20.000 TD, and 30.000 TD for other activities
• Other expenses related to exploitation needs are deductible as well as tax depreciation, other provisions and other taxes (consumption taxes, registration fees and stamps, etc)

Depreciation

Straight-line depreciation :

• 2 to 5% for commercial buildings
• 10% for furniture and materials
• 15% for computers
• 20% for cars and travelling material
• 33% for software

Declining-method depreciation :

Equipment purchased after 1st January 1994 and having a life expectation of more than seven years according to the straight-line mode (other than furniture and office equipment) as well as computer hardware and agricultural equipment are depreciated according to the declining-balance mode.

Payment of the IS

Payment in 3 provisional installments (June, September, December) each one representing 30% of the tax paid the previous year with an annual adjustment after the end of the fiscal year.

Withholding taxes

Withholding taxes applies to different income categories at various rates according to various cases :

• 1,5% of the amounts paid on transactions concluded with the State, the local communities, moral as well as the physical contributors liable to IR according to the accounting base mode
• 5% of hotel rents
• 10% of the fees, commissions, services, rents paid by the State, the local public bodies as well as companies subjected to IS. This rate falls to 2,5% if the recipient is not subjected to the flat rate mode
• 15% of the board members remuneration
• 20% of the incomes from the real estate capital except for the hard currency revenues

Royalties

The royalties paid to a recipient who does not have, in Tunisia, permanent professional installations, are subject to 15%, source-withholding tax except in case of collective agreements.

Income tax (IR)

Income tax is based on a 6 level progressive scale system at a rate ranging between 0 and 35% for the last installment for income above 50.000 TD. Incomes lower than 1.500 TD are exonerated.

• The IR of the physical people is established annually on the total amount of the incomes of a Tunisian source earned during the previous year
• Individuals, resident and non-resident are liable for taxes for the incomes of Tunisian source, except for conventions of non-double taxation
• A special tax system with a favorable rate of 20% is applied for foreign staff hired by off-shore companies or companies located in free zones as well as off-shore oil and gaz companies and banks

Dividends : The dividends paid by a Tunisian company are not taxable

Interests : The gains from real estate capital as well those of the deposit accounts are subject to a withholding of 20%, whatever the type of placement

Registration and Stamp Rights

Registration and stamp duties are applied for certain legal deeds or successions.

Deeds related to companies (constitution, increasing of capital, merger, etc…) are subject to a fixed 100 TD stamp per instrument.

Supply and service contracts are subject to a fixed right of 10 TD per page. Stamp duties apply to most written acts, as well as administrative forms.

Local taxes

The companies are subject to a communal tax at the rate of 0,2% of gross turnover, including VAT, with a ceiling of 20.000 TD per year and per company, regardless of the number of locations.

Taxes based on wages

Companies are liable to the payment of a Training Tax (TFP) on the gross salaries at the rate of 2%, except for manufacturing industries for which the rate is 1%.

All these companies are subject to FOPROLOS at the rate of 1%, on the same wage bases.

Conventions of nondouble taxation

Tunisia is signatory of conventions of non-double taxation treaties with many countries, including :

The Arab Maghreb Union, Germany, Argentina, Austria, Belgium, Canada, Denmark, Spain, the United States, France, Great Britain, Greece, Italy, Luxembourg, Netherlands, Poland, Portugal, Czech Republic, Romania, Sweden, Switzerland, Turkey.