Tunisia-Investment Incentives Code
Article-7 : *
1. Subject to the provisions of Articles 12 and 12 bis of Law n°89-114 of 30th December 1989 promulgating the code govering income tax on natural persons and companies tax, those natural persons or legal entities which subscribe to the initial capital or capital increase of companies involved in the activities listed in Article 1 of the present code will be entitled to the deduction of the income or profits they re-invest, up to the limit of 35% of the net income or profits liable to income tax on natural persons or to companies tax.
Entitlement to the above-mentioned benefit is subject to:
- The issue of new company participations or shares;
- No reductions in the capital for a period of 5 years after 1st January of they e a r following the year when the subscribed capital was paid up, except in the case of capital reduction for the re-absorption of losses;
- Presentation, when the beneficiaries of the deduction make their statement of income for the purpose of income tax on natural persons or for companies tax, of a declaration that the subscribed capital has been paid up, or of any other equivelent document.
2. Subject to the provisions of Article 12 of Law n°89-114 of 30th December 1989 issuing the Code governing income tax on natural persons and companies tax, the deduction envisaged in the first paragraph of the present article will be enjoyed by companies which invest all or part of their profits in those same companies provided they fulfil the following conditions:
- Re-invested profits must be entered in a "special investment account" on the liabilities side of the balance sheet and incorporated into the company's capital before expiry of the time limit for presenting the definitive declaration of profits for the year during which the deduction was made;
- The companies tax declaration must be accompanied by the programme of the investments to be made;
- The assets acquired in the framework of the investment must not be transferred for at least one year from the date they were actually put into production;
- The capital must not be reduced during the five years following the incorporation of the profits and income invested, except in the case of reduction for re-absorption of losses.
Article-8 : *
Companies can opt for the reducing balance depreciation system for production material and equipment which is expected to last more than seven years according to the linear depreciation method envisaged by the Code governing income tax on natural persons and companies tax, excluding office furniture and equipment.
This provision applies to equipment acquired after the present Code is issued.
Article-9 : *
The following benefits apply to the equipment necessary for realising investments, except for passenger cars:
2. Suspension of value added tax and consumption duty for equipment manufactured locally;
The equipment eligible for these incentives is fixed by decree.