Tunisia

The net global income serving as the basis of the personal income tax (PIT) shall be composed of the excess of the gross yield, including the value of the profits and benefits in kind, over the charges and expenses paid out in view of the acquisition and conservation of the income.

The net global revenue shall be composed of the total amount of the net income determined separately in accordance to the rules proper to each of the following categories of income:

• Industrial and commercial profits.
• Profits from non-commercial professions.
• Profits from agricultural or fishing activities.
• Wages, salaries, indemnities, pensions, and annuities.
• Real estate income.
• Income from securities and investments.
• Foreign-sourced income.

PIT is due by all individuals considered as tax resident in Tunisia on the basis of their worldwide income (including foreign-sourced income, except those already subject to tax abroad).

For non-Tunisian tax resident individuals, Tunisian-sourced income realised by non-resident employees is subject to income tax in Tunisia, in general, through a WHT to be applied by the Tunisian established debtor.

The WHT rates depend on the nature of income as well as the existence of a double tax treaty (DTT) between Tunisia and the state of residence of the individual.

For salaries, the net income is calculated as the gross salary reduced by the mandatory social security contributions paid to Tunisian social security organisations and 10% on the amount net of Tunisian social security contributions as deduction for professional expenses, capped at 2,000 Tunisian dinars (TND).

The gross salary includes the value of benefits in kind (e.g. lodging, car, transportation, meals, school expenses, medical expenses). Benefits in kind are valued at their actual value.

For salaries, income tax is to be withheld at source by the employer (or the employee in the particular case of expatriates earning salaries from outside Tunisia for work done in Tunisia) on a monthly basis. The monthly income tax is calculated as 1/12 of the annual income tax determined according to the progressive scale below.

However, the income tax may be due at a flat rate of 20% of their gross income, before deductions for any reason whatsoever (including compulsory social security contributions for the establishment of their retirement pensions), for:

• Non-resident employees working in Tunisia for a period or periods not exceeding six months per fiscal year.
• Certain employees of foreign nationality (managers and trainers) employed by:

• Totally exporting companies.
• Oil and gas companies governed by the Decree-Law n°85-9, if the concerned employees’ work is related to exploration.
• Oil and gas companies governed by the Hydrocarbon Code promulgated by the Law n° 99-93, whether the personnel carries out activities related to exploration or production.
• Companies based in Free Trade Zones as defined by the Law n° 92-81.
• Financial institutions working mainly with non-Tunisian residents, governed by the Code for financial services provided for non-residents.

Personal income tax rates

Except in cases where the option to pay the income tax at a flat rate is possible (see above), income tax is calculated according to the following progressive scale:

Note that revenues derived from activities that are subject to corporate income tax (CIT) at the reduced rate of 10% are 2/3 deductible from the PITable income. 

The Finance Law 2018 implemented a social solidarity contribution (SSC) to the benefit of the social funds, which is due by individuals (resident or not resident in Tunisia) on their income taxable in Tunisia and in application of the PIT scale. Hence, that contribution is not applicable to the income that is not taxable in application of the PIT scale, including mainly dividends, capital gains, and salary income taxable at the flat rate of 20% since these income categories are taxable at a specific PIT rate and not subject to the PIT scale. Also, income exempted from PIT will not be subject to the said contribution. The SSC is due at the rate of 1%. It is applicable from 1 January 2018.

The Finance Law 2020 provided that individuals realising exclusively salaries, wages, pensions, and life annuities and whose annual net income does not exceed TND 5,000 are exempted from the said SSC as of 1 January 2020.

Hence, the PIT scale will be as follows:

(*) The SSC rate of 0% will apply as of 1 January 2020 only for individuals realising exclusively salaries, wages, pensions, and life annuities and whose annual net income does not exceed TND 5,000.