In Tunisia, four VAT rates are in effect: 0%, 7%, 13%, and…
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In Tunisia, four VAT rates are in effect: 0%, 7%, 13%, and 19%. The standard rate is 19%, while the reduced rates (7% and 13%) apply to specific products or services, and the 0% rate primarily applies to exports.
1. Example of a Discount
When a product is sold with a discount, the VAT is calculated on the reduced amount.
Example: A product costs 100 Tunisian dinars (TND) with a VAT rate of 19%. If a 50% discount is applied, the taxable amount becomes 50 TND. The VAT is then 9.50 TND (50 × 19%).
The discount does not eliminate VAT; it simply reduces the taxable amount. This principle applies regardless of the VAT rate (7%, 13%, or 19%), and even for transactions exempt at 0%, where VAT is not charged but remains deductible for the exporting company.
2. FODEC and VAT: Two Distinct Taxes
FODEC (Competitiveness Development Fund) is a parafiscal tax, while VAT (Value Added Tax) is an indirect tax on consumption.
FODEC: applied to certain industrial and imported products, intended to finance economic competitiveness.
VAT: levied on the majority of goods and services, with four rates in Tunisia:
0%: exports and exempt transactions.
7%: basic food products, healthcare, school supplies, passenger transport.
13%: certain hotel, tourism, IT, and freight transport services.
19%: Standard rate, applicable by default to most goods and services.
3. Implications for Businesses
Tunisian businesses must include VAT and FODEC (Tax on Business Activities) in their pricing and cost calculations:
Monthly Declaration: The VAT collected (on sales) minus the deductible VAT (on purchases) must be paid to the DGI (General Directorate of Taxes).
Rate Management: Correctly apply the rate (0%, 7%, 13%, or 19%) according to the nature of the product or service.
Risks: Incorrect application of rates or omission of FODEC can result in tax penalties.
It is strongly recommended to consult a chartered accountant or tax specialist to optimize tax management and avoid errors.
1. Example of a Discount
When a product is sold with a discount, the VAT is calculated on the reduced amount.
Example: A product costs 100 Tunisian dinars (TND) with a VAT rate of 19%. If a 50% discount is applied, the taxable amount becomes 50 TND. The VAT is then 9.50 TND (50 × 19%).
The discount does not eliminate VAT; it simply reduces the taxable amount. This principle applies regardless of the VAT rate (7%, 13%, or 19%), and even for transactions exempt at 0%, where VAT is not charged but remains deductible for the exporting company.
2. FODEC and VAT: Two Distinct Taxes
FODEC (Competitiveness Development Fund) is a parafiscal tax, while VAT (Value Added Tax) is an indirect tax on consumption.
FODEC: applied to certain industrial and imported products, intended to finance economic competitiveness.
VAT: levied on the majority of goods and services, with four rates in Tunisia:
0%: exports and exempt transactions.
7%: basic food products, healthcare, school supplies, passenger transport.
13%: certain hotel, tourism, IT, and freight transport services.
19%: Standard rate, applicable by default to most goods and services.
3. Implications for Businesses
Tunisian businesses must include VAT and FODEC (Tax on Business Activities) in their pricing and cost calculations:
Monthly Declaration: The VAT collected (on sales) minus the deductible VAT (on purchases) must be paid to the DGI (General Directorate of Taxes).
Rate Management: Correctly apply the rate (0%, 7%, 13%, or 19%) according to the nature of the product or service.
Risks: Incorrect application of rates or omission of FODEC can result in tax penalties.
It is strongly recommended to consult a chartered accountant or tax specialist to optimize tax management and avoid errors.
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