Tunisia plans to overhaul its VAT system to bring foreign supplies of digital services purchased by Tunisia-based consumers into scope.
Due to currency controls, the Tunisian authorities could not apply VAT to B2C transactions. However, in the 2020 Finance Law the introduction of a 3% ‘redevance’ – like a royalty, but not a corporation tax – was planned as a workaround.
This 3% tax was proposed via Tunisia’s 2020 Finance Law and is to apply to sales of software and electronic services provided to Tunisia-based customers by foreign businesses.
An important point to note about this ‘redevance’ is that it will only be due when the official decree providing for it is published. This has yet to happen and it may well be delayed further if this tax is deemed to be unconstitutional. If this ‘redevance’ is enshrined in law then it will have to be paid by the affected foreign businesses on a quarterly basis. This 'redevance' is effectively another version of a Digital Services Tax (DST).
Some background information
In practice, Tunisian VAT (TVA) already exists on B2B transactions via the usual reverse charge mechanism. It is not, however, applicable to B2C transactions as consumers in Tunisia cannot buy online in foreign currency without first going through the country’s central bank, the BCT (Banque Centrale de Tunisie). The reason for this is because the Tunisian currency (the Dinar) is still centrally controlled. The Tunisian authorities are currently looking at ways to remove this limitation.
We will, of course, keep you up to date on developments in Tunisia and further afield.
NOTE: With thanks to M. Lassâad Dhaoudi.
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