General

VAT/GST registration

VAT/GST compliance

VAT/GST recovery

Invoices

Audits

Special indirect tax rules

Rulings

Other indirect taxes

Types of indirect taxes (VAT/GST)

VAT.

What is standard VAT/GST rate?

19 percent.

Are there any reduced rates, zero rates or exemptions?

Reduced rates:

• 13 percent VAT on services by lawyers, tax advisors, other experts, and few other supplies
• 7 percent VAT on transport (with some exceptions), on activities of doctors and analytical laboratories, services by hotels and restaurants, materials and supplies for pharmaceutical products and certain other supplies.

No actual zero-rated supplies, but some supplies such as exports are VAT-suspended with a VAT credit.

Exempt supplies include:

• insurance and reinsurance
• some interest
• some food items and products subject to the government homologation of prices
• some social housing
• books, brochures (other than touristic brochures), and similar products
• certain farming products and equipment
• international air and shipping transport, country collective transport.

What are the general and specific place of supply rules, if applicable?

The principle of territoriality applies:

• for services: where it is used or consumed
• for goods: where it is delivered.

Who is required to register for VAT/GST?

The following persons are liable for registration:

• persons carrying out transactions in Tunisia relating to sale operations, commercial operations other than sales, industrial and handmade operations, professional services, retail trade (annual turnover of 100,000 Tunisian dinar (TND) or more) and independent personnel services
• persons incorrectly reflecting VAT on invoices
• persons opting to be liable where:
• operations are not within the VAT scope
• exempt export activities are conducted
• exempt goods or services are supplied to VAT-registered persons
• entities affiliated with companies liable for VAT registration.

Is voluntary VAT/GST registration possible for an overseas company?

No.

Does an overseas company need to appoint a fiscal representative?

No.

Is VAT/GST grouping* possible?

No.

How frequently are VAT/GST and other indirect tax returns submitted?

Monthly (by the twenty-eight day of the following month for companies, by the fifteenth day of the following month for natural persons). This monthly return is not specific to VAT, but it covers both direct and indirect taxes, including tax reporting.

Can returns be filed and payments be made electronically?

Yes and it is compulsory when the annual gross turnover exceeds TND750,000.

What are the exchange rate rules?

Exchange rate as published by the Tunisian Central Bank should be used where applicable.

Can an overseas company recover VAT/GST and other indirect taxes if not registered for VAT/GST locally?

No.

Is it a prerequisite that output tax be charged before input tax can be claimed?

Yes.

Are there any exemptions with the right to reduce or deduct input VAT?

Input VAT cannot be deducted on passenger cars, except if it constitutes the main activity of a business, and maintenance of passenger cars.

If VAT was incorrectly charged by a supplier who is not liable for VAT, such deduction can also not be made.

Input VAT can only be claimed on invoices complying with requirements.

For what period of time may input tax not previously claimed be claimed (i.e. prescription)?

3 years.

Where a VAT return reflects a refund due to the taxpayer, is the refund paid to the taxpayer or is the taxpayer required to utilize the refund as a credit against future payments?

The two possibilities are allowed.

Is a business required to issue tax invoices?

Yes.

Is it possible/mandatory to issue invoices electronically?

Yes.

Is it possible to issue recipient-created tax invoices?

No.

Do tax audits take place on a regular basis?

Audits generally take place upon a VAT credit refund or upon business closure.

Are audits done electronically in your country/territory (e-audit)? If so, what system is in use?

No.

What penalties can arise from non-compliance?

The following penalties are levied:

• late filing of nil reporting returns; penalties ranging between TND100 and TND10,000, but not if spontaneous regularization before a tax inspection
• late filing of VAT payment returns; 0.5 percent fixed interest per month, or fraction of a month, of delayed levy on tax due. 

Penalties of 0.5 percent to 1.25 percent if the payment default is identified by the tax authorities (after a tax inspection). The 1.25 percent can be reduced by 50 percent if the taxpayer makes an immediate payment (within 30 days) without making any contest or appeal.

Are there unique country/territory-specific indirect tax rules that differ from 'standard' indirect tax rules in other jurisdictions?

VAT relating to bad debts cannot be deducted or refunded.

Does a reverse charge mechanism apply?

No, however, there is a withholding tax mechanism which applies when the supplier is not a resident and does not have a permanent establishment in Tunisia where VAT is withheld by the Tunisian customer and reported to the authorities.

Can VAT on reverse charges be claimed as input tax, to the extent that the expense on which the reverse charge VAT is accounted for, is used for taxable purposes?

No, not on reverse charges. But the VAT withheld under the withholding tax mechanism can be claimed as input tax.

Can non-residents appoint local agents in order to avoid reverse charge VAT by virtue of charging standard rate VAT and accounting for such VAT through the agent?

Not applicable

Are there indirect tax incentives available (e.g. reduced tax, tax holidays)?

Yes, VAT suspension foreseen in the VAT Code for fully and partially exporting entities and other exemptions for investments covered by the Investment Law (e.g. for regional development, environmental protection) for international trade companies and for the oil and gas sector.

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes.

Are rulings and decisions issued by the tax authorities publically available?

Yes, rulings and decisions can be found at: www.impots.finances.gov.tn/documentation/documentation.html

Are there other indirect taxes not commented on above?

Yes, other indirect taxes include:

• land registration
• special insurance transaction tax
• excise duties.

For further information please contact

Olfa Sayadi
Director, Indirect Tax
KPMG in Tunisia
T: +216 71 19 43 44
E: olfasayadi@kpmg.com

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

All information contained in this document is summarized by KPMG in Tunisia, a member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity