Tunisian-resident companies are subject to CIT in Tunisia on the basis of profits generated from permanent establishments (PEs) located in Tunisia and those attributable to Tunisia by virtue of a double tax treaty (DTT). Non-Tunisian-resident companies are subject to CIT on the basis of their Tunisian-sourced income.
PEs of non-Tunisian-resident companies are subject to CIT in the same way and under the same conditions as Tunisian-resident companies. However, certain particularities, related mainly to deductions, exist (see the Branch income section).
CIT is also due by non-resident, non-PE companies on Tunisian-sourced income through withholding taxes (WHTs).
CIT is broadly levied on the total net income resulting from the statutory financial statements of the company, duly adjusted according to the specific tax rules.
Positive/negative items of income are taxed/deducted based on the accrual basis. Income items accruing in a tax period where the above principle is not met are not allowed for tax deduction nor taxed in that tax period. Tax deduction/taxation is correspondingly deferred to the future tax periods where the principle will be met.
Income items have to be certain in their occurrence and objectively determined or determinable in their amount.
The Finance Law 2021 amended the CIT rates applicable in Tunisia as follows:
- The general CIT rate applicable to profits realized from January 1st, 2021 will be 15% (instead of 25% before the amendment);
- The rate of 20% (applicable to small enterprises) has also been reduced to 15%;
- The CIT rate of 13,5% applicable to enterprises operating in strategic sectors, as provided by the finance laws 2019 and 2020, has been increased to 15%.
The rates of 10% and 35% have not been modified.
According to the above and starting from January 2021, CIT rates applicable will be as follows (subject to exemptions and tax incentives):
- 10% as a reduced rate applicable for some activities detailed below;
- 15% as a general rate;
- 35% for financial, assurance, automotive, telecom and other important sectors, as detailed below.
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 realised with non-residents (for profits realised starting from 1 January 2014). 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.
- 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).
Minimum corporate tax
A minimum corporate tax is due at the rate of 0.2% of the local turnover, including VAT, with a minimum of TND 500, in case:
- the company (subject to CIT at the rate of 20%, 35%, or 15%) realises losses, or
- the CIT due at the rate of 20%, 15%, or 35% is less than the minimum corporate tax of 0.2% of the local turnover, including VAT.
However, the minimum corporate tax is reduced to 0.1% of the gross turnover for companies subject to CIT at the rate of 10% and companies selling products with regulated prices having a gross margin not exceeding 6%, with a ceiling of TND 300.
The minimum corporate tax is not due by companies benefiting from the whole exemption of profits deriving from operations (e.g. companies established in the regional development zones, companies operating in the agricultural sector) during the period of tax holidays. These latter are fixed by decree.
Local income taxes
For a description of local taxes, see Vocational training tax, Local authority tax (LAT), and Hotels tax in the Other taxes section.