Overview
VAT is levied under the Tunisian VAT Code and is due on all transactions taking place in. VAT was introduced in June 1988 to replace the existing tax on production, the consumption tax and the tax on services that had been in force since 1955.
Release date: May 2023
Rates and scope |
The standard rate of VAT is 19%. Lower rates of 7% and 13% apply to specifically designated operations. Some operations, products or services are out of the scope of VAT in Tunisia and others are expressly exempt from VAT. Some goods and services may be acquired VAT-free based on a certificate delivered for the purpose by the relevant tax authorities. This exemption is granted mainly to wholly exporting companies, oil and gas companies, and their contractors and subcontractors. Unless expressly exempt, transactions that take place in Tunisia relating to commercial operations other than sales (sale operations subject to VAT are expressly designated), industrial and artistic operations, and independent personnel services are subject to VAT. This is regardless of the targets, the results and the legal status of the persons conducting the relevant operations and regardless of their liabilities for other taxes. |
VAT registration |
Compulsory registration The following persons are liable for compulsory registration:
Persons liable for VAT can be either totally or partially subject to VAT. |
Voluntary registration Voluntary registration is allowed where persons:
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Group and branch registration The branch or the subsidiary must register for VAT with the tax department, regardless of its liability for VAT, in order to get a tax identification number that shows the status of the registrant in regard to VAT. The registration must be made prior to starting any activity. |
Non-residents In case VAT is due on a transaction invoiced by an entity that is neither resident nor established in Tunisia, VAT will be withheld at source by the Tunisian entity and paid on behalf of the non-resident, non-established entity in Tunisia to the government within 28 days following the end of the month during which the transaction took place. The entity not established in Tunisia that carried out a transaction liable for VAT in Tunisia may file a return with the Tunisian tax authorities in order to deduct the input tax on the purchase of goods and services necessary for the realisation of the transaction subject to VAT from the amount of the VAT due in Tunisia on that transaction, and which was withheld at source by the Tunisian client. |
Application for registration A written application is to be filed with the relevant tax authorities by newly created enterprises before starting any activity. In case of voluntary registration, the application may be submitted at any time during the tax year (most of the time the tax year coincides with the calendar year) and the option becomes effective from the first day of the month following the one during which the optional registration is accepted by the tax authorities. The registrant must remain subject to VAT for a four-year period starting from the day the option becomes effective (see above) until 31 December of the fourth year following the one during which the registration for VAT took place. No deregistration is possible during this period. In case of deregistration, a written request is to be filed with the relevant tax authorities three months before the expiry of the four-year period. Failing that, the registration will be tacitly renewable for four years each time. |
Deregistration Deregistration is not possible in the case of compulsory liability for VAT. In case of voluntary registration, the deregistration is to be made by a written application to be filed with the relevant tax authorities within three months before the end of the four-year registration period. |
Output tax |
| Output tax is calculated on the basis of the amount of the invoice, excluding VAT. The VAT rate to be applied depends on the nature of the goods or services to be provided. |
Exempt supplies The VAT exemptions include, but are not limited to:
VAT exemptions also apply to sales defined as exports, which means sales of goods and services to entities not located in Tunisia, as well as sales to wholly exporting entities governed by the Incentives Investment Code, to companies based in free zones, to offshore banks and to certain other entities benefiting from a VAT exemption. |
Zero-rated supplies The zero rate does not apply in Tunisia. |
Input tax |
Input tax allowed Individuals and companies that are subject to VAT may deduct the input VAT incurred on the purchase of goods and services necessary to carry out activities subject to VAT. |
Input tax expressly denied VAT incurred on the following expenses may not be deducted as input VAT:
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Partial exemption Partial exemption applies if the company is carrying on two or more activities and one or several of these activities are not subject to VAT. In this case, the input VAT to be deducted is a portion of the whole input VAT incurred. This portion is calculated by multiplying the total amount of the input VAT by a quotient where:
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Adjustments During the course of the year, the company deducts the input VAT on a pro rata basis (as described above). The quotient applied is calculated by using the data of the previous year. At the end of the current year, the company must calculate the quotient to be applied and corresponding to that year. If the difference exceeds 5%, the company must adjust the input VAT. |
International trade |
Imports The importation of goods and services is subject to VAT. |
Exports The exportation of goods and services is not subject to VAT. VAT exemption applies to sales defined as exports, which means sales of goods and services to entities which are not located in Tunisia, as well as sales to wholly exporting entities governed by the Incentives Investment Code, to companies based in free zones, to offshore banks and to certain other entities benefiting from a VAT exemption. VAT charged on goods bought by non-resident individuals (tourists) may be refunded. |
Place of supplies |
The sale of goods is considered as taking place in Tunisia and thus subject to VAT if the goods sold are delivered in Tunisia. The sale of services is considered as taking place in Tunisia and thus subject to VAT if the services sold are consumed or used in Tunisia. |
VAT compliance |
Accounting basis The Tunisian accounting legislation is based on an accrual principle. The VAT is accounted for and declared during the month during which the expense or the revenue is incurred or realised, notwithstanding the disbursement of the receipt date. |
Returns and payment of VAT VAT is declared and paid on a monthly basis. |
Refunds If the input VAT exceeds the output VAT, the VAT credit resulting from the difference may be reimbursed on the basis of a written request made to the tax authorities. The VAT credit is refundable if it arises from:
In order to benefit from the refund of the VAT credits, the taxpayer has to file supporting documents such as declarations relating to exportation of goods, documents proving that the service rendered by the Tunisian taxpayer was used or consumed outside Tunisia, authorisations to sell VAT-free, and withholding tax certificates. Further, the taxpayer must already have submitted all his tax returns and paid all taxes due at the time of submission of the request for a refund and at the date of the notification of the refund decision made by the tax authorities. The VAT credit is to be reimbursed within:
An advance payment of 15% of the VAT credit is to be paid to the taxpayer as soon as he presents the request for refund if the VAT credit arises from operations other than export, suspension of activity and operations of companies that are neither resident nor established in Tunisia. This rate is to be increased to 50% if the taxpayer is a company whose accounts are legally subject to statutory audit, as long as the certification of its accounts has no reserves affecting the tax basis. The above rate will be 100% for companies under the Direction of Large Companies (Direction des Grandes Entreprises [DGE]) based on a special report of the statutory audit. |
Time limits The taxpayer may claim for the VAT credit within three years, calculated from the date from which the VAT becomes refundable. |
Interest and penalty Any delay in the payment of all or part of the tax starting from April 1st, 2023, entails the application of a late penalty at a rate of 1,25% of the amount of tax per month or fraction of the month of delay, when the tax payable is paid spontaneously and without the prior intervention of the tax audit. This rate is increased by fixed penalties of:
The rate of the late penalty is fixed at 2.25% when the delay in the payment of the tax is recorded following the intervention of the tax control services. This penalty is reduced by 20%, when the tax payable is paid within a maximum period of thirty days from the date of the recognition of debt and provided that the recognition of debt occurs before the completion of the conciliation phase. This rate is increased by 10 % of the amount of the tax regardless of the delay period or 20% in certain cases (nonpayment of taxes); the rate is reduce to 5% or 10% when the tax payable is paid within a maximum period of thirty days from the date of the recognition of debt and provided that the recognition of debt occurs before the completion of the conciliation phase. |
Tax invoices A proper tax invoice should include:
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Specific VAT rules |
Land and buildings The sale by a property developer of buildings exclusively destined for housing is subject to VAT at the rate of 13%. The rent of non-equipped houses is VAT exempted. |
Leasing Leasing operations are subject to VAT. Leasing companies deduct, as input VAT, the VAT due on the purchase of the goods leased. The output VAT is calculated on the basis of the whole amount paid by the lessee (principal and interest). |
Secondhand goods If a person acquires second-hand goods:
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Small retailer scheme Retailers realising a turnover exceeding (in Tunisia dinar) TND100,000 (USD60,600) are subject to VAT. However, the sales made by retailers of the following products are exempt from VAT: food and products, the sale price of which is fixed by the state. Retailers have to maintain registers in which they register, on a day-to-day basis, their purchases (the nature of the goods, price excluding VAT, rate and amount of VAT, etc.) and their turnover. Retailers are allowed to issue, by the end of the business day, one single invoice for all the sales made during the day, as it is difficult in practice to issue an invoice for each customer. |
Other indirect taxes |
Registration tax The registration of some operations is compulsory. In these cases, the registration fees are expressly determined by the Registration Fees and Stamp Duties Code, whereas the registration remains optional for certain operations. In case of optional registration, the registration fees due to be paid are equal to TND 30 per page. In case of compulsory registration, the due fees depend on the nature of the transaction and the goods involved. |
Stamp duty Companies have to charge a stamp duty of 1.000 TND on each issued invoice, unless the customer is expressly exempt. |
