TunisiaTax Obligations Detailed

In Tunisia, employers have various tax obligations related to payroll, corporate income, and other levies.

Employer Payroll Taxes

• Social Security: 16.57% of the gross salary. A reduced rate of 0.5% applies to wholly industrial exporting companies.
• Work Accident Insurance: 0.5% of the gross salary. This new contribution funds a program to support workers facing economic layoffs.
• Housing Levy: 1% of the gross salary for manufacturing industrial companies and 2% for other sectors.
• Development Levy: 2.0% of the gross salary. This levy may change based on the specific sector of activity.
• Professional Training Tax: 1% of gross salary in the manufacturing sector and 2% for other sectors.

Employee Payroll Taxes

• Social Security: 9.18% of the gross salary. This contribution is withheld by the employer.
• Work Accident Insurance: 0.5% of the gross salary. This is a new contribution established in 2025.

Income Tax (Individual)

• Residents: Taxed on worldwide income at progressive rates:

  • 0% for income up to 5,000 TND.
  • 26% for income between 5,001 and 20,000 TND.
  • 28% for income between 20,001 and 30,000 TND.
  • 32% for income between 30,001 and 50,000 TND.
  • 35% for income above 50,001 TND.

• Non-Residents: Taxed on Tunisian-sourced income. A flat rate of 20% applies to gross income for stays up to six months, specifically for foreign employees of totally exporting companies or those working in Tunisia for less than six months in a fiscal year.

Corporate Income Tax (CIT)

• The standard CIT rate is 15%. Specific rates apply to certain sectors. A 4-year exemption from CIT is available to newly established enterprises that submit an investment declaration in 2024 or 2025, beginning from the commencement of activities until December 31 of the same year.

Other Taxes

• Value Added Tax (VAT): The standard rate is 19%.

Tax Filing and Payment

• Monthly Tax Returns: Due by the 20th of the following month for electronic filing and by the 28th for other methods. This return includes VAT, withholding taxes, and other levies like the social lodging tax.
• Annual CIT Return: Due by March 25th of the following year, extended to June 25th for public liability companies (PLCs) and private limited companies (LLCs) subject to statutory audits.
• Employer's Annual Declaration: Due by April 30th of the following year, detailing all salaries and fees paid or accrued during the year.
• Social Security Contributions: Employers withhold both employee and employer contributions and pay them to the social security authorities quarterly.

This information is current as of February 5, 2025, and might be subject to change. Consulting with a tax professional is recommended for the most up-to-date and specific advice.

In Tunisia, employees contribute to social security and income tax, impacting their net pay.

Employee Contributions

• Social Security: Employees contribute 9.18% of their gross salary to the Caisse Nationale de Sécurité Sociale (CNSS). This covers areas like healthcare, pensions, and other social benefits.
• Professional Expenses Deduction: A 10% deduction is applied to the salary after social security contributions, capped at TND 2,000 annually. This accounts for work-related expenses.
• Income Tax: A progressive income tax system applies. The tax rates depend on the annual income bracket, ranging from 0% for income up to TND 5,000 to 35% for income above TND 50,000. Taxable income is calculated after deducting social security and the professional expenses allowance.

Employer Obligations

• Withholding: Employers withhold income tax and social security contributions from employee salaries.
• Monthly Payments: Income tax withholdings are due to tax authorities by the 20th of the following month for electronic filings (28th for others).
• Quarterly Payments: Social security contributions (both employee and employer portions) are payable to the CNSS quarterly.
• Annual Return: Employers must file an annual return summarizing withheld taxes.
• Economic Loss of Employment Insurance Fund: Employers and employees each contribute 0.5% of the wage bill to this fund, managed by the CNSS. It supports workers facing job loss due to economic factors.

Income Tax Rates (2025)

The income tax rates for residents are as follows:

• 0% for income up to TND 5,000
• 26% for income between TND 5,000.01 and TND 20,000
• 28% for income between TND 20,000.01 and TND 30,000
• 30% for income between TND 30,000.01 and TND 50,000
• 35% for income exceeding TND 50,000

Tax Residency

An individual is considered a tax resident in Tunisia if:

• They have a permanent home in Tunisia.
• Their stay in Tunisia exceeds 183 days in a calendar year.

Non-residents (staying less than six months in a calendar year) are taxed only on Tunisian-sourced income.

Important Considerations

• Benefits in Kind: Benefits like housing, company cars, and meals are considered part of the gross salary and are subject to both social security contributions and income tax. These benefits are valued at their actual cost to the employer.
• Tax Filing Deadline: For employees, the annual tax return is due by December 5th of the following year.
• Double Taxation Agreements: Tunisia has double taxation agreements with several countries. These agreements can prevent double taxation of income earned by residents of both countries.

Disclaimer: This information is current as of February 5, 2025 and is for informational purposes only. Consult with a tax advisor for personalized guidance.

In Tunisia, Value Added Tax (VAT) is a consumption tax applied to most goods and services.

VAT Rates

• Standard Rate: 19% (applicable to most goods and services).
• Reduced Rates: 13% (select services like reinsurance and goods transport), and 7% (medical services, paper for newspapers/magazines, tourism, and domestic electricity consumption under 300 kWh).
• Zero Rate: 0% (exports and related services, certain basic foodstuffs, some financial services, agricultural supplies, pharmaceuticals, loan interest and international transport).
• Exempt: Certain financial services, basic foodstuffs, agricultural supplies, publishing (physical and electronic), pharmaceuticals, loan interest, and international transport.

VAT Registration

• Threshold: Businesses must register before their first taxable sale. Retailers have a TND 100,000 annual sales threshold.
• Non-Resident Traders: They can register as foreign taxpayers or utilize the withholding VAT mechanism where the customer withholds the VAT due.

VAT Filing and Payments

• Frequency: Monthly (by the 28th of the following month for incorporated businesses and the 15th for individuals) or quarterly for businesses with annual turnover below TND 1 million.
• Method: Primarily online, with paper filing possible for businesses below the TND 1 million threshold.
• VAT Credit Refunds: Businesses can reclaim excess input VAT by applying to the Ministry of Finance.
• Invoice Requirements: Invoices must include supplier/customer details, tax numbers, date, invoice number, description of goods/services, VAT rate and amount, and gross amount. Credit notes are not issued; invoices are canceled and reissued. Electronic invoicing is mandatory for large companies and optional for others.

2025 VAT Changes

• Electricity: The VAT on low-voltage electricity for domestic use is reduced from 13% to 7% for consumption under 300 kWh.
• Other sectors impacted by tax relief:
  • Community enterprises
  • Pharmaceutical industries
  • Coffee and Tea
  • Industrial enterprises (7% VAT on buses for employee transport)

Exempt Goods and Services

Certain goods and services are exempt from VAT, including some basic foodstuffs, educational materials, healthcare, and financial services. Specific details can be obtained from the Tunisian tax authorities.

Additional Information

• Time of Supply: For goods, it's the delivery date; for services, it's the earlier of service provision or invoice payment. For imports, VAT is paid before customs clearance.
• Social Lodging Tax: A 1% tax on gross salaries, including benefits in kind, is payable by employers in Tunisia.

Please note that this information is current as of February 5, 2025, and may be subject to change. It's always recommended to consult with a tax professional for the most up-to-date regulations.

Tunisia offers various tax incentives primarily aimed at promoting investment, exports, and regional development. As of February 5, 2025, the following incentives are applicable:

General Incentives

• Newly Created Enterprises: Newly established companies, excluding those in specific sectors (finance, energy except renewable energy, and real estate development), filing an investment declaration in 2024 or 2025 are exempt from corporate and personal income taxes for four years, provided they commence operations within two years of the declaration and adhere to Tunisian accounting standards. This four-year exemption precedes any other incentive schemes like deductions for companies located in Regional Development areas.
• Investment Incentives Code: This code provides various incentives like tax relief on reinvested profits (up to 15%), customs duty exemptions for capital goods with no local equivalent, VAT suspension on imported goods (not locally manufactured) for investment projects, and the option for a reducing balance method of depreciation for production equipment with a useful life exceeding seven years. This applies to all businesses except those in mining, energy, local trade, and finance. Some require self-declaration, while others need prior authorization.

Sector-Specific Incentives

• Exporting Companies: Companies exporting all their goods benefit from a 15% tax rate on export profits, full exemption on reinvested profits and income, and total exemption from duties and taxes on goods (including raw materials, transportation equipment, and services) necessary for their operations. International trade and service companies, however, are no longer eligible for the VAT exemption on imports and local acquisitions as of January 1, 2022.
• Regional Development Zones: Incentives like deductions and exemptions are available for investments in designated zones to promote economic growth in less-developed regions.
• Agriculture: Tax benefits encourage investment in agricultural development to support productivity and sustainability.

Other Incentives

• Reduced VAT: A reduced VAT rate of 7% (down from 13%) applies to low-voltage electricity for domestic use for individuals consuming under 300 kWh monthly. The standard VAT rate has been lowered to 7% on buses acquired by industrial companies for employee transport (vehicles under customs code 87-02 and not older than ten years). Specific tax reductions also apply to coffee, tea, and certain agricultural products. The Finance Law for 2025 suspended the VAT regime for community enterprises and pharmaceutical industries. VAT is exempt on loan interest for crowdfunded projects.

Corporate Tax Rates

• The general corporate tax rate is 20% (increased from 15% in 2024).
• The corporate tax rate for the financial sector is 40% (increased from 35% in 2024).

It's important to consult with tax professionals for the latest regulations and specific eligibility criteria as of February 5, 2025. Tax laws and regulations are complex and are subject to change. This overview is for informational purposes only.