When moving abroad, especially for professional reasons, taxes will probably be a key issue. So if you have chosen to move to Tunisia, make sure to inquire about its tax system beforehand so as to avoid any surprises. Different types of taxes apply in the country, namely individual income tax, corporate tax, etc.
Your residency status in Tunisia defines what taxes you will need to pay. If you are a tax resident in the country, you will be taxed on all your income, including the income you earn from abroad. If you are not a tax resident in the country, you will generally only be taxed on the income you earn from local sources.
Are you a tax resident in Tunisia?
To figure out what taxes you need to pay in Tunisia, you first need to know whether or not you are considered a tax resident.
You will be considered a tax resident in Tunisia if:
- You have a permanent home available in Tunisia
- Your stay in Tunisia during a calendar year is longer than 183 days.
If you fulfill the above conditions, you are considered a tax resident in the country. This means you will need to pay taxes on your worldwide income.
To avoid taxing its residents twice, Tunisia had double taxation agreements with a number of countries, including the United States.
A double taxation agreement is an agreement between states designed to prevent the same income from being taxed twice. If your country has a double taxation agreement with Tunisia, it means that you will only be taxed on your income once. For instance, if you make money from a business in the United States and have already paid your taxes at the source, you will not be taxed on this income in Tunisia.
If you are a tax resident in Tunisia but plan to leave the country, you should apply for tax clearance from the tax authorities
Non-residents in Tunisia are subject to tax only on personal income received from Tunisian sources.
Individual income tax in Tunisia
Individual income tax in Tunisia varies according to 6 different income brackets:
Income (in Tunisian dinars): rate 2022
|
Income bracket |
Tax rate |
|
0 to 5,000 Dinars |
0% |
|
5,000,001 to 20,000 Dinars |
26% |
|
20,000,001 to 30,000 Dinars |
28% |
|
30,000,001 to 50,000 Dinars |
32% |
|
Above 50,000 Dinars |
35% |
What is taxable income in Tunisia?
Income from which you are required to pay income tax is referred to as taxable income.
The following are classified as taxable income in Tunisia:
- industrial and commercial benefits
- non-commercial professional benefits
- benefits from farming and fishing
- wages, salaries, pensions and annuities
- income from securities and movable capital
- property income
- foreign income if they have not been taxed in the country of origin.
For each of the categories above, there are certain deductions and allowances when your taxable income is calculated.
Social security contributions in Tunisia
Tunisian employers are required to register any hired employee to the Tunisian social security regime (CNSS). The employer should withhold each month the social contributions (employer and employee) and then report and pay them to the CNSS on a quarterly basis.
Employee contribution: 9.18 percent of the gross income
Employer contribution: 16.57 percent of the gross income
How is tax applied in Tunisia?
The net taxable income is calculated by the employer following deductions, professional charges and non-taxable income.
On the other hand, taxable income is entitled to the following deductions:
- 10% for wages and salaries
- 25% for pensions and annuities
- 80% for pensions and life annuities from abroad according to certain conditions
- 30% for income from house property and for non-commercial professions.
Tax exemptions in Tunisia
The following income are exempt from tax:
- dividends and similar income
- interest deposits and securities in foreign currency or convertible dinars
- interests on housing savings accounts
- interests on savings accounts for education
- plus values from the exercise by employees of stock options in the capital of companies mainly engaged in the IT services sector, computer engineering and related services, in the information and communications technology and new technologies sectors, as well as listed companies, and subject to certain conditions, as well as companies listed in stock exchange under certain conditions
- capital gains from the transfer of businesses due to the manager's retirement or inability to manage or from the transfer of business in the case of companies facing economic difficulties, under some conditions
- interest on savings accounts for investment in the limit of 2,000 dinars per year
- annuities paid according to life insurance contracts.
Deductions accounting for family responsibilities or to encourage investment in certain sectors:
- arrears of rents paid as compulsorily and free
- premiums relating to life insurance contracts within the limits set by applicable laws
- interests on special savings accounts or bonds and within limits set by applicable laws
- amounts deposited in savings accounts for investment and in share savings accounts up to a maximum of 20,000 Tunisian dinars per year and subject to a minimum tax rate
- reimbursement of university loans in principal and interest
- income from the rental of buildings or restoration for the benefit of students, pupils and students in basic vocational training centers for 10 years
- income from international brokerage within the limit of 50% for 10 years from the first international brokerage operation
- income reinvested in the subscription to the capital of companies under conditions set by applicable laws on tax benefits
- income reinvested in accommodation and restoration projects for the benefit of students, pupils and learners in vocational training centers under the minimum tax rate
- deductions for dependents (family head, dependent children, dependent parents).
Corporate tax in Tunisia
The standard corporate income tax (CIT) rate in Tunisia is 15% as of 2022. However, the CIT rate also varies depending on the nature of the business.
The CIT rate for companies involved in activities such as arts and crafts, fishing and agriculture, export and some others is 10%.
The CIT rate for companies that have entered the Tunis Stock Exchange is 20%.
The CIT rate for the financial sector is 35%.
Value Added Tax (VAT) in Tunisia
VAT is collected on all transactions that take place in Tunisia. All sales of goods considered as taking place in Tunisia are, thus, subject to VAT if the sold goods are delivered in Tunisia.
The sale of services is also subject to VAT if the sold services are used in Tunisia.
The standard VAT rate in the country is currently 19%. However, lower rates apply to specific transactions.
Real estate tax in Tunisia
Real estate tax is paid annually by all property owners in Tunisia. It is levied at 2% on the evaluated square meter value of the property — this should be determined and re-evaluated every three years.
Real estate tax will be levied on the rental income value of the property if this value is less than the evaluated square meter value of the property.
Rental income is considered part of the aggregate income and is taxed at progressive rates.
If you buy property in Tunisia from a registered real estate developer, you will need to pay from 1% to 10% of the total purchase price of the property.
Excise tax in Tunisia
Excise tax is a state tax levied on specific goods and services that are either imported to Tunisia or manufactured in the country. Excuse tax is levied on items like cigarettes and tobacco products, alcoholic beverages, cosmetics, perfume, private cars, and so on. This tax is levied on the sale price or customs value for imported goods.
How to pay taxes as an expat in Tunisia?
If you are a tax resident in Tunisia, you will need to download a tax declaration from the tax department's website. You will need to carefully fill in the form and then deposit it at the nearest tax center to your place of residence. You can also submit the form online — but note that any delay in payment is subject to penalties.
Good to know:
Note that married couples are required to file tax returns as separate individuals. The income of children should be reported on the tax return of one of the parents.
Tunisian residents must submit their annual tax returns before the fifth of December in the year following the year of taxation.
Non-residents (those whose stay in Tunisia doesn't exceed six months in a calendar year), on the other hand, aren't required to submit annual tax returns.
You can find all the information you need on the local taxes on the e-jibaya portal. Note, however, that the information on the website is currently available in French and Arabic.
Tax guidance in Tunisia
Tunisia is a country that strongly encourages foreign investment in a variety of different forms. You may be interested in opening a business in Tunisia, investing in property, and more. Regardless of the form of investment you select, you will need to make sure that everything is done legally and that you fulfill all your tax obligations. For instance, to purchase property in Tunisia, you will need to be aware of the related restrictions and tax obligations and obtain all the necessary authorizations. If you want to sell property in the country, you will need to apply for authorization from the governor.
Figuring out taxation in a foreign country can be complicated — and it is strongly recommended that you spend a proper amount of time researching Tunisia's tax system and how it applies to you. It is also a good idea to talk to a qualified tax attorney before making any long-term financial commitments in the country.
When selecting what taxation lawyer to work with, make sure to check the lawyer's license and credentials for working in Tunisia. Note that there are instances of non-Tunisian residents who present themselves as legal advisors without proper documents to work in Tunisia. Make sure to only seek legal advice from a certified lawyer.
While managing taxes in a foreign country may seem daunting at first, all it takes is proper research and organization. Take the time to learn about the taxation system in Tunisia as well as the legal aspects of working and Tunisia and setting up a business here. This will help you navigate the local system and make better decisions for your financial well-being.
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