Tunisia provides a number of incentives for investment aimed primarily at manufacturing for export and agriculture but covers several other industries as well. The following outlines the main regime:

Investment Law No. 71-2016

With an aim to promote investment and encourage the creation of enterprises and their development in accordance with economic priorities, the government introduced Investment Law No 71-2016 in 2017. The main goals of the new investment law are:

Increase of the added value, competitiveness, and technological aspect of the national economy at the regional and international levels and develop priority sectors;
Job creation and the raise of human resources competences;
Achievement of an integrated and an equal regional development;
Achievement of sustainable development.
The benefits granted under the new law include:
Direct investment operations are eligible for grants/ allowances for the following:

improvement in value-added and competitiveness;
development of employability capacity;
regional development; and
sustainable development.

Projects having a National importance benefit from the following:

deduction of the benefits from the taxation basis in the limit of ten years;
an investment grant in the limit of the third of the investment costs including the resulting internal infrastructure expenditure; and
state participation in infrastructure expenditure.

Free access to own, rent, and exploit non-agriculture properties for the purpose of achieving direct investments operations;
Ability to recruit foreign management personnel up to 30% of the total number of the management staff till the end of the third year following the legal constitution of the enterprise, or starting from the date of its entry into effective production. This limit is obligatory reduced to 10% starting from the fourth year from that date. In all cases, the enterprise is allowed to recruit up to four foreign management staff;
Foreign investors can freely transfer the profits, dividend, capital abroad in foreign currency in accordance with applicable change legislation;
Ensures equal treatment to foreign and Tunisian investors in terms of rights and obligations when they are in similar legal positions; and
Arbitration benefit if the dispute cannot be settled with the state authorities.

As part of the transitional measures, the benefits under the old investment law will apply until the expiry of the period they are allowed to that benefit for:

Enterprises that have received the investment declaration acknowledgment before the entry into force of the Investment Law; and
Enterprises that have received the financial benefit approval and entered into effective activity within two years after the date of entry into force of the Investment Law.

The old investment incentives code provided the following tax incentives:

Profits tax exemption for 10 years for companies engaging wholly in the production of goods and services for export and for agricultural projects, and a reduced rate of 10% from the 11th year onwards;
Deduction of export income from taxable profits for companies partially engaged in producing goods or services for export, and 50% deduction of export income from the 11th year onwards (effective 1 January 2019, the incentive is removed subject to certain transitional measures for companies set up before 31 December 2018);
Profits tax exemption for 5 to 10 years for projects in areas set as regional development areas; and
Exemption from duties and taxes on capital goods, including equipment for the transportation of goods, and raw materials for a project.

Incentives for Newly Listed Companies

Effective 1 January 2020, companies newly listed on alternative market of Tunis Ex+H92 change are eligible for the benefit of reduction in taxable profits over a period of 4 years following the public offering. The reduction will be applicable as follows:

100% in the first year;
75% in the second year;
50% in the third year; and
25% in the fourth year.

Incentives for New Companies

Effective 1 January 2024, a four-year corporate and personal income tax exemption is granted to new companies starting from the year the actual activity phase begins, subject to the following conditions:

A certificate of deposit of the investment permit is obtained by the company from the departments concerned during the tax years 2024 and 2025;
The company is not engaged in activities in the financial and energy sectors, with the exception of renewable energy, or engaged in mining, real estate development, local consumption, trade, and telecommunication network operation; and
The actual activity must begin within a maximum period of two years from the date of the authorization of the investment.

Tax Holiday

Effective 1 January 2018, the government has introduced a four-year corporate tax holiday (exemption) for qualified enterprises established in 2018 and 2019, which is extended to enterprises established in 2020 (effective 1 January 2019). The tax holiday do not apply to companies operating in the financial sector, the energy sector (except renewable energy), real estate development, on-site consumption, trade, and telecommunication sector.

Other Incentives

Effective 1 January 2022 (as per Finance Law 2022), electric vehicles, hybrid motor vehicles and equipment used in solar energy are eligible for a reduced tax rate as follows:

50% reduction in consumption tax for hybrid motor vehicles;
50% reduction in consumption tax and full exemption from customs duties for fully electric motor vehicles; and
Reduced customs duty on solar panels at the rate of 10%.

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