Employers must demonstrate a substantial and just reason for terminating an employee. Prior to termination, the employee has the opportunity to appeal to a discipline council.

A written notice period of one month should be provided.

Probationary periods vary according to the type of employment, but they typically last between six and nine months.

Unless terminated for misconduct, employees are entitled to severance pay. Each month of employment is compensated with one day's pay. Severance pay is limited to three months' pay.

As of February 2021, the minimum hourly wage for a non-agricultural worker in Tunisia was 2.06 Tunisian dinars for a 48-hour working week and 2.11 dinars for a 40-hour week (approximately 0.75 and 0.77 U.S. dollars per hour, respectively).

The general CIT rate is 15% (as per the finance law 2021). However, specific rates are foreseen for specific sectors of activity. Indeed, CIT is due at the rate of:

10% for:

Companies carrying out craft activities, agricultural and fishing activities, and fitting out fishing boats.

Trading groups of retail businesses organised as service cooperatives, governed by the general cooperation legislation.

Service cooperatives formed between producers for the wholesale of their production.

Consumer cooperatives governed by the general cooperation legislation.

Profits made in the context of industrial or commercial projects benefiting from the youth employment programme or the national fund of the promotion of crafts and small businesses.

Benefits derived from exports (except wholly exporting companies where the ten-year tax holiday period has not expired). Note that the reduced CIT rate of 10% applicable to exports will no longer apply as of 1 January 2021. As of that date, the general CIT rate will apply depending on the activity notwithstanding whether the benefits are derived from exports or from local activities.

Support and pollution control activities.

Companies operating in the regional development zones after the expiry of the total deduction period.

Benefits derived from investments in the agricultural or fishing sectors at the end of the total deduction period.

Non-resident financial service providers for profits derived from transactions realized with non-residents (for profits realized starting from 1 January 2014). Note that the reduced CIT rate of 10% applicable to profits derived from transactions realized with non-residents will no longer apply as of 1 January 2021. As of that date, the general CIT rate will apply depending on the activity notwithstanding whether the benefits are derived from exports or from local activities.

20% for companies subject to CIT at a rate of 35% and whose shares are admitted (no later than 31 December 2024) to the Tunis Stock Exchange; The 20% rate is applicable for 5 years as from the year of admission.

35% for:

Banks (including Islamic banks) and financial institutions (leasing companies, factoring companies, investment banks).

Offshore financial institutions governed by the code related to financial services destined to non-residents, and this only for the benefits derived from services provided to non-resident persons. Note that the reduced CIT rate of 10% applicable to profits derived from transactions realised with non-residents will no longer apply as of 1 January 2021. As of that date, the general CIT rate will apply depending on the activity notwithstanding whether the benefits are derived from exports or from local activities.

Investment companies (SICAF and SICAR).

Insurance, mutual insurance, and reinsurance companies.

Takaful insurance and reinsurance companies (added by Finance Law 2020).

Debt collection companies.

Telecommunication operators.

Profits derived from services relating to the hydrocarbon sector (listed by Article 130-1 of the Hydrocarbon Code promulgated by the Law 1999-93).

Companies rendering services to companies operating in the oil and gas field.

Companies operating in the production and the transport of hydrocarbons and governed by particular conventions, as well as companies operating in the transfer of hydrocarbons via pipeline.

Companies operating in the oil refining sector and the wholesale of hydrocarbon products.

Hypermarkets (constructed area exceeding 3,000 m² or sales area exceeding 1,500 m²) as of 1 January 2020.

Car dealers (as of 1 January 2019).

Franchisees of a foreign brand or trademark, except for enterprises with a rate of integration equal to or greater than 30% (as of 1 January 2019).

The net global income used to calculate the PIT must be the excess of the gross yield, including the value of profits and benefits in kind, over the charges and costs incurred in the course of acquiring and conserving the income.

The net global revenue must consist of the entire amount of net income calculated separately in line with the criteria applicable to each of the following income categories:

Profits in the industrial and commercial sectors

Profits from non-commercial activities.

Profits earned from farming or fishing.

Wages, wages, indemnities, pensions, and annuities are all examples of compensation.

Income from real estate.

Profits from securities and investments

Income derived from abroad.

PIT is payable by all persons deemed to be tax residents in Tunisia based on their global income (including foreign-sourced income, except those already subject to tax abroad).

Tunisian-sourced income realized by non-resident workers is liable to income tax in Tunisia, in general, via a withholding tax (WHT) to be imposed by the Tunisian established debtor.

The WHT rates are determined by the type of the income as well as the presence of a double taxation treaty (DTT) between Tunisia and the individual's state of residence.

In the case of wages, net income is computed as the gross pay less the obligatory social security contributions made to Tunisian social security organizations and 10% of the amount net of Tunisian social security contributions as a deduction for professional costs, up to TND 2,000.

The value of in-kind benefits is included in the gross pay (e.g. lodging, car, transportation, meals, school expenses, medical expenses). In-kind benefits are evaluated at their fair market value.

Except in situations when it is feasible to pay income tax at a flat rate, income tax is computed on the following progressive scale:

For a taxable income of up to TND 5,000, the tax rate is 0.

For a taxable income from TND 5,001 to TND 20,000, the tax rate is 26 percent.

For a taxable income from TND 20,001 to TND 30,000, the tax rate is 28 percent.

For a taxable income from TND 30,001 to TND 50,000, the tax rate is 32 percent.

For a taxable income of over TND 50,000, the tax rate is 35 percent.

VAT is imposed in accordance with the Tunisian VAT Code and is payable on all transactions that take place in Tunisia.

If the items sold are delivered in Tunisia, the transaction is deemed to take place in Tunisia and is liable to VAT. If the services provided are abused or used in Tunisia, the transaction is deemed to take place in Tunisia and is liable to VAT.

VAT is charged at a normal rate of 19%. Lower rates of 13% and 7% apply to specially specified activities. Please keep in mind that these prices are valid as of January 1, 2018. (previously 18 percent , 12 percent , and 6 percent , respectively).

Some activities, goods, or services are exempt from VAT in Tunisia, whereas others are explicitly excluded.

Some products and services may be purchased VAT-free if the appropriate tax authorities provide a certificate to that effect. This exemption is mostly given to businesses that are entirely exporting, oil and gas corporations, their contracts, and their subcontractors.

In Tunisia, employment contracts might be either oral or written. The best method is to have a firm, written (in Arabic) contract in place that clearly outlines the employee's remuneration, benefits, and termination criteria. The employment contract must include specify the pay and any other remuneration in Tunisian dinars.

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Tunisian Dinar