Tunisia Tax Regime

Tunisia operates a classical corporate income tax system layered with sector-specific rates, a turnover-based minimum tax, and a range of investment incentives administered under the Investment Law. The general corporate income tax rate was increased from 15% to 20% under the Finance Law 2025, while reduced and elevated rates continue to apply to specific sectors — from 10% for agriculture, fishing and handicraft activities up to 35% for telecoms, hydrocarbons and large retail, and 40% for banks, financial institutions and insurers. Tunisia has ratified the OECD Multilateral Instrument (MLI), which entered into force on 1 November 2023, reflecting a gradual alignment with international tax standards even though Tunisia has not adopted a Pillar Two minimum tax regime. The personal income tax system is progressive, and value-added tax at a standard 19% rate underpins the indirect tax base.

1.1 Sources

Primary legislation includes the Tunisian Tax Code (Code de l'IRPP et de l'IS), the Investment Law (Law No. 2016-71), the annual Finance Laws, the VAT Code and the Tax Procedures Code.

1.2 Recent developments

The Finance Law 2025 raised the general corporate income tax rate from 15% to 20%, with the reduced 10% rate for agricultural, fishing and craft activities unchanged, and the 35%/40% elevated rates preserved for specified sectors. A new permanent contribution introduced by the Finance Law 2026 applies at 4% of CIT taxable profit (minimum TND 10,000) to banks, financial institutions, insurers, telecom network operators and car dealers, declared and paid together with CIT from profits declared as of 1 January 2026 — following conjunctural (temporary) contributions levied in 2024 and 2025 on similar sectors and large-turnover companies. The Finance Law 2024 also introduced a four-year CIT exemption for newly created enterprises that filed an investment declaration in 2024 or 2025, subject to sector exclusions and start-of-activity conditions.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

Tunisian-resident companies are subject to corporate income tax (CIT) on profits generated through permanent establishments located in Tunisia and profits attributable to Tunisia under an applicable double tax treaty. Non-resident companies without a Tunisian permanent establishment are taxed on Tunisian-source income through withholding tax. The general CIT rate is 20%. A reduced 10% rate applies to craft, agricultural and fishing activities, certain cooperatives, youth-employment and small-business programme profits, regional development zone companies after expiry of their exemption period, and support/pollution-control activities. Elevated rates of 35% apply to payment institutions, investment companies (SICAF/SICAR), debt collection companies, telecom operators, hydrocarbon-sector services and production, large hypermarkets, car dealers and certain foreign-brand franchisees; a 40% rate applies to banks (including Islamic banks), leasing/factoring/merchant banks and insurance/reinsurance companies, including non-resident financial institutions. Companies otherwise subject to 35% or 40% CIT that list on the Tunis Stock Exchange (by 31 December 2024) benefit from a reduced 20% rate for five years from admission.

A minimum corporate tax applies at 0.2% of local turnover including VAT (minimum TND 500) where a company makes a loss or where CIT computed at the standard rates is below this floor; the rate is reduced to 0.1% (ceiling TND 300) for companies taxed at 10% and for regulated-margin resellers. The minimum tax does not apply during statutory tax-holiday periods for fully exempt activities such as regional development zone or agricultural investments.

2.2 Dividends and participation exemption

Dividends distributed between Tunisian resident companies are generally exempt from further corporate taxation at the recipient level, avoiding a cascade of CIT on the same profits within a corporate chain, though the distribution may still trigger withholding tax obligations for the distributing company on flows to individuals or non-residents. Capital gains on shares are generally included in ordinary taxable income, with specific exemptions available for gains on shares admitted to the Tunis Stock Exchange held for defined periods and for reinvested proceeds meeting Investment Law conditions.

2.3 Income determination and deductions

Taxable income is computed from the statutory financial statements prepared under Tunisian accounting standards, adjusted for tax-specific rules, on an accrual basis; income items must be certain in occurrence and objectively determinable in amount, with recognition deferred to the period in which this is met. Ordinary and necessary business expenses are deductible when properly substantiated and invoiced; entertainment and certain gifts above regulatory thresholds, fines and penalties, and expenses paid in cash above prescribed limits are typically non-deductible or capped. Depreciation follows official schedules — generally straight-line, with accelerated/declining-balance methods available for specified industrial equipment. Provisions for doubtful debts and inventory are deductible within statutory limits and evidentiary requirements.

2.4 Interest limitation

Interest paid to related parties is subject to a debt-to-equity style scrutiny and deductibility is limited where financing is considered excessive or where the recipient benefits from a preferential regime; interest on shareholder current accounts is deductible only up to the amount of paid-up capital and subject to a capped rate referencing the central bank's money-market rate. Thin-capitalisation and arm's-length principles apply to intra-group financing more broadly under transfer pricing rules, and interest paid to non-cooperative or low-tax jurisdictions can be denied deduction or subjected to enhanced withholding.

2.5 Losses

Tax losses may be carried forward for four years following the loss-making year; unused capital-allowance (depreciation) carryforwards are not subject to the same four-year cap and may be carried forward indefinitely as an addition to ordinary losses in later years once the ordinary loss carryforward period elapses. There is no loss carryback. Losses are generally personal to the company that incurred them; there is no consolidated relief mechanism transferring losses on a change of ownership beyond ordinary continuity-of-business scrutiny by the tax administration.

2.6 Group taxation

Tunisia operates a limited fiscal integration regime allowing a parent company holding at least 75% of the capital of resident subsidiaries to elect group taxation, consolidating results so that losses of group members offset profits of others within the group, subject to conditions on the accounting period and continuity of the group. Outside this election, each Tunisian company is taxed as a separate entity, and dividends within a qualifying integrated group are eliminated from the consolidated base.

2.7 Controlled foreign companies

Tunisia does not operate a comprehensive CFC regime attributing the income of controlled foreign subsidiaries to Tunisian parent companies on a look-through basis. Anti-avoidance protection for outbound structures instead relies on transfer pricing rules, enhanced withholding and deduction restrictions for payments to entities in jurisdictions considered non-cooperative or subject to a privileged tax regime, and the general anti-abuse principles applied by the tax administration.

2.8 Transfer pricing

Related-party transactions must be conducted on arm's-length terms, with the tax authorities empowered to reassess profits shifted abroad through non-arm's-length pricing, and companies exceeding prescribed turnover thresholds (currently TND 20 million) must maintain contemporaneous transfer pricing documentation and file an annual related-party transactions declaration alongside the CIT return. Tunisia has not adopted a formal advance pricing agreement programme comparable to OECD peer jurisdictions, though informal rulings and administrative guidance may be sought from the Directorate General of Taxes on specific arrangements.

2.9 Incentives

The Investment Law (2016-71) provides common incentives (accelerated depreciation, VAT and customs suspension on capital goods, tax credits for reinvested profits) and sector-specific incentives for regional development zones, agriculture, export-oriented activities and priority sectors such as innovation and renewable energy, typically combining a multi-year full deduction period (five or ten years depending on zone) with a subsequent partial deduction period. Export-oriented companies benefit from customs and VAT suspension regimes on inputs, and a four-year CIT exemption applies to newly created enterprises filing investment declarations in 2024 or 2025, subject to sector exclusions (financial services, energy other than renewables, mining, real estate development, telecoms and certain related-party arrangements).

2.10 Pillar Two

Tunisia has not enacted Pillar Two legislation and is not currently applying an income inclusion rule, undertaxed profits rule or qualified domestic minimum top-up tax. Large multinational groups with Tunisian operations should nonetheless monitor developments, since in-scope groups headquartered in jurisdictions that have implemented an income inclusion rule may still see Tunisian profits topped up abroad to the 15% global minimum where effective local taxation — after incentives and tax holidays — falls below that threshold.

2.11 Branch income and reorganisations

A Tunisian branch (permanent establishment) of a foreign company is taxed on its Tunisian-attributable profits under the same CIT rates and rules as resident companies, subject to specific restrictions on the deductibility of head-office overhead allocations and management fees, which must be justified and are capped by administrative practice. A branch profits tax applies on top: under article 29(I)(3) and article 29(II)(c) of the Code de l'IRPP et de l'IS, profits realised in Tunisia by a Tunisian establishment of a foreign company are presumed distributed to the owners not domiciled in Tunisia, and article 52(I)(c bis) charges tax on those presumed distributions at 10%, the rate applying to profits distributed from 1 January 2018 under article 46 of Finance Law No. 2017-66. That rate rises to 25% where the beneficiary is resident or established in a State or territory whose tax regime is privileged within the meaning of point 12 of article 14. The charge arises whether or not the profits are in fact remitted, and in the branch case the tax is not withheld by a payer but self-declared and paid by the Tunisian permanent establishment on a return filed for that purpose, in accordance with any applicable double taxation treaty. Domestic mergers, demergers and asset contributions can benefit from tax-neutral treatment (deferral of gains, carryover of tax attributes) where conducted under the Investment Law or Commercial Companies Code reorganisation provisions and approved conditions are met; cross-border reorganisations are assessed case by case with capital gains taxation the default absent specific relief.

3.1 Residence and rates

Individuals are considered Tunisian tax resident if they have a permanent home in Tunisia, their principal place of abode is in Tunisia (habitual presence exceeding 183 days in a calendar year), or they are Tunisian government employees posted abroad without being subject to tax there. Residents are taxed on worldwide income; non-residents on Tunisian-source income only. Personal income tax (impôt sur le revenu des personnes physiques, IRPP) is charged at progressive rates on aggregate net income after category-specific deductions, running from 0% on a lower exempt band up to a top marginal rate of 40% for the highest income bracket, with intermediate brackets in between; the schedule is periodically adjusted by Finance Law.

3.2 Capital income and real estate

Dividends paid to resident individuals are subject to withholding tax at source, and interest income is likewise subject to withholding, both generally creditable against the final IRPP liability with the withholding often treated as a final discharge for smaller savers under simplified rules. Capital gains on the disposal of Tunisian real estate are taxed at rates depending on the holding period and the nature of the property, with exemptions for a taxpayer's sole primary residence held beyond a minimum period and for inherited property in specified circumstances. Gains on listed securities held beyond a minimum holding period may benefit from exemption, while short-term trading gains are taxed as ordinary income.

3.3 Social security and payroll

Employees and employers contribute to the National Social Security Fund (CNSS) at percentages of gross salary that together amount to roughly a quarter of payroll cost, split unevenly with the employer bearing the larger share; contributions fund pensions, health insurance, family benefits and occupational injury cover. Employers withhold IRPP on salaries monthly on a pay-as-you-earn basis (retenue à la source), applying the progressive schedule pro-rated to the pay period, with annual reconciliation through the employee's own IRPP return where other income exists.

3.4 Inbound individuals

There is no separate net wealth tax in Tunisia. Inheritance and gift transfers are subject to registration duties rather than a dedicated inheritance tax, with rates varying by degree of kinship and asset type, and preferential low fixed rates for transfers between spouses, ascendants and descendants. There is no general expatriate tax regime, though foreign technical staff employed under specific investment-incentive projects may benefit from simplified withholding arrangements agreed as part of the underlying investment approval. Individuals relocating to Tunisia should expect standard residence-based worldwide taxation from the point residence is established, subject to any applicable double tax treaty relief for foreign-source income already taxed abroad.

Tunisia applies withholding tax to a range of domestic and outbound payments. Dividends paid to non-residents are subject to withholding tax, subject to treaty reduction; dividends between resident companies are generally free of further withholding when the participation qualifies for the intercompany dividend regime. Interest paid to non-residents, royalties and technical service fees paid abroad are subject to withholding at the statutory domestic rate absent treaty relief. Tunisia's treaty network of more than 50 conventions frequently reduces these rates, and treaty relief is subject to residence certification and, following ratification of the MLI, a principal purpose test for treaty benefits.

Domestic payments to resident service providers and certain resident corporates are also subject to withholding as an advance payment mechanism credited against final CIT liability, with rates varying by payment type and payee category. Refund of excess withholding is available on filing the annual CIT return where cumulative withholding exceeds the final liability, though refund processing can be administratively slow, making careful advance-payment planning important for cash-flow management.

5.1 General anti-abuse and hybrids

The Tunisian tax administration applies a general substance-over-form and abuse-of-law doctrine enabling it to disregard or recharacterise arrangements lacking economic substance and entered into principally to obtain a tax advantage. Tunisia does not yet have a codified hybrid-mismatch regime comparable to the EU's ATAD, but deduction of payments to related parties in low-tax or non-cooperative jurisdictions is restricted, and the tax authorities may deny deductions or apply enhanced withholding where a payment is structured to exploit a mismatch between Tunisian and foreign tax treatment.

5.2 Exit taxation and disclosure

There is no formal exit tax regime for companies migrating their tax residence out of Tunisia, though a deemed-realisation approach to asset transfers may apply in substance through ordinary capital gains rules on out-of-scope transfers. Tunisia's ratification of the OECD Multilateral Instrument (effective 1 November 2023) subjects its treaty network to the principal purpose test and other BEPS-minimum-standard provisions covered by its MLI positions. Tunisia does not currently operate an EU-style DAC6 mandatory disclosure regime or public country-by-country reporting requirement, though large multinational groups with a Tunisian constituent entity may still have group-level CbCR obligations imposed by their ultimate parent's jurisdiction.

6.1 VAT

Value-added tax is levied at a standard rate of 19%, with reduced rates of 13% (certain professional services, hotels and catering-adjacent activities) and 7% (essential goods, healthcare-related supplies and books) applying to specified categories of goods and services, alongside a list of exemptions for basic foodstuffs, healthcare and education. Registration is mandatory for businesses exceeding prescribed turnover thresholds, with a simplified flat-rate regime (régime forfaitaire) available for very small businesses below those thresholds. Returns are filed monthly, generally by the 15th or 28th of the following month depending on taxpayer category, with input VAT recoverable against output VAT subject to standard exclusions (passenger vehicles, certain entertainment expenses).

6.2 Transaction, payroll and other taxes

A vocational training tax (taxe de formation professionnelle) and a contribution to the housing fund (FOPROLOS) are levied on payroll at modest percentages, funding training and social housing programmes respectively. Registration duties (droits d'enregistrement) apply to the transfer of real estate and to specified corporate transactions such as capital increases and business transfers, generally at proportional rates with fixed minimums. A local authority tax (taxe sur les établissements à caractère industriel, commercial ou professionnel, TCL) is levied on turnover at a modest rate to fund municipal services, and a hotel tax applies to the tourism sector. Excise-type consumption duties apply to specified products including tobacco, alcohol, petroleum products and certain luxury and imported goods; a stamp duty applies to specified documents and instruments.

7.1 Filing, assessment and audit

The tax year is generally the calendar year, though companies may adopt a different fiscal year with tax administration approval in specific circumstances. The annual CIT return is due within the prescribed period following the close of the fiscal year (generally by 25 March for companies not required to have a certified statutory auditor and later for those that are, depending on filing channel), accompanied by financial statements and, where applicable, transfer pricing and related-party disclosures. Returns are increasingly filed electronically through the tax administration's online platform. Audits are conducted by the Directorate General of Taxes on a risk-selected basis, with a general statute of limitations of four years, extended where fraud or non-filing is established.

7.2 Rulings, appeals and penalties

Taxpayers may request administrative rulings on the tax treatment of specific transactions from the Directorate General of Taxes, though the practice is less formalised than in OECD jurisdictions with binding APA programmes. Disputed assessments can be challenged through an administrative reconciliation and appeal process, escalating to the competent courts (tribunaux administratifs) for judicial review where administrative appeal does not resolve the dispute. Late payment interest and penalties apply to underpaid tax and late filings, with materially higher penalty rates where fraud or deliberate concealment is established; voluntary disclosure before the start of an audit generally attracts reduced penalties.

Companies subject to elevated 35%/40% rates and the new permanent sectoral contribution should budget for the contribution alongside their CIT instalments, since it is declared and paid together with CIT rather than on a separate timetable. Late or underpaid instalments attract interest calculated from the original due date.

9.1 Entity choice

The SARL (limited liability company) is the most common vehicle for foreign investment, requiring at least one shareholder and manager with no minimum capital for most activities; the SA (public limited company) suits larger or capital-market-oriented ventures and requires a minimum share capital and board structure. Branches of foreign companies are permitted for specific regulated or project-based activities and are taxed on Tunisian-attributable profits at the same rates as resident companies. Offshore/export-oriented status under the Investment Law offers customs and VAT suspension benefits but carries restrictions on domestic-market sales.

9.2 Structuring and incentives

Inbound investors should evaluate regional development zone status, export-orientation and sector (agriculture, renewable energy, technology) for eligibility to the Investment Law's tax-holiday and reduced-rate regimes, which can substantially lower the effective rate below the 20% headline for the first several years of operation. Groups with Tunisian financing subsidiaries must observe the shareholder-loan interest deductibility cap referencing paid-up capital and the arm's-length requirement for related-party pricing. Businesses in the newly contribution-liable sectors (banking, insurance, telecoms, car dealerships) should factor the 4% permanent contribution into effective-rate planning from 2026 profits.

9.3 Worked effective-rate illustration

A Tunisian manufacturing SARL not benefiting from any investment incentive earns EBITDA of TND 4,000,000, books depreciation of TND 600,000 and net interest expense of TND 400,000 (within permitted deductibility limits). Taxable profit is 4,000,000 − 600,000 − 400,000 = TND 3,000,000. CIT at the general 20% rate is TND 600,000. Local turnover including VAT is TND 15,000,000, so the minimum corporate tax floor of 0.2% would be TND 30,000 — well below the standard CIT liability, so the standard computation applies and no minimum-tax top-up is triggered. The effective corporate tax rate is 600,000 / 3,000,000 = 20.0% of taxable profit. If the company instead qualified for a regional development zone five-year full-deduction incentive, the same taxable profit would be fully deducted from the CIT base during the incentive period, reducing the corporate-level cash tax to nil (subject to the 0.2%/0.1% minimum tax not applying during the exemption period), before any subsequent partial-deduction phase-out.

9.4 Compliance

Expect statutory financial statements prepared under Tunisian accounting standards, increasingly electronic filing of CIT, VAT and withholding returns, mandatory external audit above defined size thresholds, transfer pricing documentation and related-party disclosure above the TND 20 million turnover threshold, and monthly payroll withholding and social security compliance. Companies benefiting from Investment Law incentives must retain supporting investment-declaration documentation and monitor conditions (activity start deadlines, sector exclusions, continuity requirements) that can trigger clawback of incentives if breached.