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Tunisia, formally the Republic of Tunisia, is Africa's northernmost nation. It is located in North Africa's Maghreb area, surrounded by Algeria to the west and southwest, Libya to the southeast, and the Mediterranean Sea to the north and east; it covers 163,610 km2 (63,170 sq mi) and has a population of 11 million people. It includes the eastern end of the Atlas Mountains and the northern parts of the Sahara desert, with most of the remaining area arable. Its 1,300 km (810 mi) of coastline connects the western and eastern regions of the Mediterranean Basin in Africa. Tunisia is home to Africa's northernmost point, Cape Angela, as well as its capital and greatest city, Tunis, which is situated on the nation's northeastern coast and gives the country its name.
Tunisia has been inhabited by indigenous Berbers since antiquity. Phoenicians started to arrive in the 12th century BC, founding various towns, the most important of which was Carthage by the 7th century BC. Carthage, a great trade empire and military adversary of the Roman Republic, was conquered by the Romans in 146 BC, who controlled Tunisia for the following 800 years, introducing Christianity and leaving architectural relics such as the El Jem amphitheatre. After numerous unsuccessful efforts beginning in 647, Muslims conquered all of Tunisia by 697, introducing Islam and Arab culture to the locals. The Ottoman Empire took authority in 1574 and maintained power for for 300 years, until the French seized Tunisia in 1881. Tunisia obtained independence in 1957, led by Habib Bourguiba, who founded the Tunisian Republic. Tunisia is now the smallest country in North Africa, and its culture and identity are founded in this centuries-long melting pot of cultures and races.
The Tunisian Revolution, spurred by the lack of freedom and democracy under president Zine El Abidine Ben Ali's 24-year tenure, ousted his dictatorship in 2011 and ignited the wider Arab Spring throughout the region. Soon after, free multiparty legislative elections were conducted; the people voted for parliament again on October 26, 2014, and for president on November 23, 2014. Tunisia remains a unitary semi-presidential representative democratic republic and the only nation in North Africa designated as "Free" by Freedom House. According to the Economist Intelligence Unit's Democracy Index, it was the sole democratic state in the Arab World from 2014 to 2020, and it was labeled a hybrid government in the 2021 Index. It is one of the few African nations with a high Human Development Index and one of the highest per capita incomes on the continent.
Tunisia is a member of the world community. It is a member of the United Nations, La Francophonie, the Arab League, the Organization of Islamic Cooperation, the African Union, the Non-Aligned Movement, the International Criminal Court, and the Group of 77. It has tight economic and political ties with a number of European nations, notably France and Italy, which are geographically adjacent to it. Tunisia has an association agreement with the European Union and has become a significant non-NATO ally of the United States.
Each month, employees are given one vacation day. They will have accrued 12 vacation days after one year of employment.
Tunisia recognizes 14 public holidays.
To be eligible for sickness benefits, an employee must have worked for at least 50 days in the previous two quarters or 80 days in the previous four quarters before becoming ill. After a five-day waiting period, the covered employee receives 66.7 percent of their daily average wages for 180 days. They earn 50% for up to 180 days each year for the next year.
Employees who are female are entitled to a total of thirty days of vacation. The employee must have contributed to social insurance for at least 80 days in the four quarters preceding up to the birth in order to receive 66.7 percent of their daily wages.
Within the first seven days after the birth of the child, fathers are entitled to one day of paid leave.
The insured receives a lump sum payment equal to his or her daily average quarterly earnings.
There is no qualifying term for work-related injury leave, but the accident must be reported to the employer within 48 hours and analyzed. The injured employer will be compensated at 66.7 percent of their average daily earnings during the highest-paid period prior to the onset of the impairment. After a three-day waiting period, payments will be made and will continue until the employee has recovered.
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.
Tunisia's standard work week is either 48 or 40 hours, depending on the applicable collective bargaining agreement or employer policy. Employees receive a minimum of 24 hours of rest per week.
Before employees can work overtime, employers must obtain permission from the Labor Inspector. Total work hours, regular and overtime, cannot exceed ten hours per day and sixty hours per week. In a 48-hour week, overtime cannot exceed 12 hours; in a 40-hour week, overtime cannot exceed 20 hours. Overtime pay is determined by whether an employee works a 48- or 40-hour workweek.
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).
Employees in Tunisia have access to healthcare via the country's social security fund. Employers often offer additional private insurance.
Mandatory benefits postulated by law include a probationary period, pay on annual leaves, public holidays, sick leaves, maternity leave, paternity leave, and overtime pay. Statutory benefits also include social security benefits.
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.
All foreigners staying in Tunisia for longer than three consecutive months or six non-consecutive months in a year must get a residency visa. There are two kinds of visas for permanent residency.
Temporary Residency Visas are one-year visas provided for foreigners who do not seek to establish permanent residence in the United States.
Permanent Residence Visas are granted to foreigners who have been residing in Tunisia on a temporary basis for five years in a row.
A residency permit is often provided for a duration of two years, renewable. Each new employment contract necessitates the renewal of these permissions. Renewals of residence permits may be valid for up to 5 years.
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
Instead of rushing into the establishment of your Tunisia subsidiary, we propose taking a step back and carefully evaluating some essential considerations. Begin by deciding on a city or area to serve as your physical headquarters. Different localities within Tunisia may have different Tunisia subsidiary laws that make incorporation simpler or more complex. If you are unsure about which area is appropriate for your subsidiary, speak with a lawyer, consultant, or accountant.
Another thing to think about is your company. The subsidiary structure provides for a variety of business structures, such as a limited liability company (LLC), a public limited company, a branch office, or a representative office. The structure you choose should be based on your anticipated company activities and objectives. An LLC, for example, gives you the greatest flexibility to operate in Tunisia, whilst a branch or representative office gives you the least.
Setting up your Tunisia subsidiary as an LLC entails the following steps:
1. Obtaining a certificate of deposit for your investment project from the appropriate agency, depending on your industry.
2. Registering your business with the court clerk
3. Filing your project declaration certificate and legislation with the IRS
4. Filing an initial statement and receiving a tax identification number from the tax office
5. Publication of a "Request for Registration" in the Official Journal of Tunisia
6. Getting a customs code number
7. All foreign workers must have work permits.
8. All foreign investors or promoters must get residency permits.
Tunisia's subsidiary laws varies based on the entity chosen. If you decide to form an LLC, you must have at least two shareholders and one director. They are not need to reside in Tunisia and might be of any nationality. Because LLCs function similarly to resident-run businesses, you must register for VAT and corporate income tax with the Tunisian Tax Authority as part of the entire subsidiary registration procedure. You do not need to employ a statutory auditor if your company's total assets are less than $55,000.