- Updated
- July 2021
- Sections
- 13
- Questions
- 33
Key Facts
Core Framework
Article 48 septies of the code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés.
Articles 29 to 33 of Law No. 2018-56 of December 27, 2018, enacting the Finance Act for the year 2019 (LF 2019) and Article 15 of Law No. 2020-46 of December 23, 2020, enacting the Finance Act for the year 2021 (LF 2021).
The domestic tax legislation on transfer pricing has been revised in the context of the Finance Act for the year 2019 to be in line with adopted international standards and notably with the principles and best practices of the OECD applicable in this field. The reform thus undertaken was carried out with the assistance of the OECD. Similarly, “notes communes” relating to the comments of the new transfer pricing provisions have been prepared based on the explanations and comments available on the OECD website and with the assistance of the OECD team. The domestic transfer pricing legislation does not explicitly refer to the OECD principles.
Note commune n°11/2020.
Yes. Note commune n°11/2020 has specified the comparability factors that may be significant in assessing comparability in the section on comparability analysis. This analysis has been developed based on the principles adopted by the OECD in this respect. To place this comparison in context, the economic characteristics of the situations considered must be sufficiently comparable. This means that none of the possible differences between the situations compared could significantly affect the item under review (e.g., price or margin) or that reasonably comparability adjustments can be made to eliminate the impact of such differences. To determine the comparability and then make the comparability adjustments necessary to establish arm's length terms, it is suitable to compare the characteristics of the transactions or businesses that would affect the terms of the transactions at arm's length.
Note commune n°11/2020.
No. There is no hierarchy between internal and external comparables; it is recommended to look for the most reliable comparable among those available.
Documentation
TP Methods
- CUP
- Resale Price
- Cost Plus
- TNMM
- Profit Split
Selection: Most appropriate method
Dispute Resolution
Simplifications
Special Topics
No. Domestic tax legislation nor note commune 11/2020 provides specific provisions regarding controlled transactions involving intangibles. The general transfer pricing provisions contained in such regulations would apply.
Code des droits et procédures fiscaux; article 84 undecies, article 84 decies, article 84 nonies.
Yes. Penalties applicable to breaches of the documentary obligation: fine equal to 0.5% of the amount of the transactions concerned with a minimum of TND 50 000 per fiscal year audited. Penalties for breaches of CbCR: fine equal to TND 50 000 and TND 100 per piece of missing/inaccurate information (max TND 10,000). Penalties for breaches of the annual declaration: fine equal to TND 10 000 and TND 50 per piece of missing/inaccurate information (ceiling TND 5 000 per fiscal year).
Full OECD Questionnaire
Legal ReferenceArticle 48 septies of the code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés.
Legal ReferenceArticles 29 to 33 of Law No. 2018-56 of December 27, 2018, enacting the Finance Act for the year 2019 (LF 2019) and Article 15 of Law No. 2020-46 of December 23, 2020, enacting the Finance Act for the year 2021 (LF 2021).
The domestic tax legislation on transfer pricing has been revised in the context of the Finance Act for the year 2019 to be in line with adopted international standards and notably with the principles and best practices of the OECD applicable in this field. The reform thus undertaken was carried out with the assistance of the OECD. Similarly, “notes communes” relating to the comments of the new transfer pricing provisions have been prepared based on the explanations and comments available on the OECD website and with the assistance of the OECD team. The domestic transfer pricing legislation does not explicitly refer to the OECD principles.
Legal ReferenceArticle 48 septies (fourth paragraph) of the code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés.
Yes. Ties of dependence or control are deemed to exist between companies when: - one of them holds more than 50% of the share capital or voting rights of another company or exercises in fact the decision-making power directly or through an intermediate person, or - the companies are subject to the control of the same company or the same person under the conditions set out above.
Legal ReferenceNote commune n°11/2020.
No. Note commune n°11/2020 gives an indication of certain transfer pricing methods that can be used inspired on methods developed by the OECD.
- CUP (provided)
- Resale Price (provided)
- Cost Plus (provided)
- TNMM (provided)
- Profit Split (provided)
- Other (not provided)
Legal ReferenceNote commune n°11/2020.
In accordance with note commune n°11/2020, the company must choose the most appropriate method to remunerate any activity in accordance with the arm's length principle. The process of selecting an appropriate remuneration must be in line with the following elements: - the strengths and weaknesses of each method - the consistency of the method considered with the nature of the audited transaction - the availability of reliable information needed to apply the selected method - the degree of comparability of the controlled and independent transactions. Any method chosen by a company may be considered acceptable by the tax administration if it is justified, consistent with the functions performed, the assessed risks and the employed assets, supported by relevant information, and that the prices charged by the company comply with the arm's length principle. Whichever transfer pricing method the company chooses, its implementation requires a comparison with a comparable transaction in the free market.
- Hierarchy of methods (not selected)
- Most appropriate method (selected)
- Other (if so, please explain) (not selected)
Legal ReferenceNote commune n°11/2020.
Other. Domestic tax legislation does not provide specific guidance for commodity transactions. However, note commune n°11/2020 clarified that for commodity transactions that have data available on domestic and international trade prices the most widely used method is comparing the price on the free market.
- For controlled transactions involving commodities, the guidance contained in paragraphs 2.18-2.22 of the TPG is followed. (not selected)
- Domestic legislation mandates the use of a specific method for controlled transactions involving commodities (if so, please explain) (not selected)
- Other (if so, please explain) (selected)
Legal ReferenceNote commune n°11/2020.
Yes. Note commune n°11/2020 has specified the comparability factors that may be significant in assessing comparability in the section on comparability analysis. This analysis has been developed based on the principles adopted by the OECD in this respect. To place this comparison in context, the economic characteristics of the situations considered must be sufficiently comparable. This means that none of the possible differences between the situations compared could significantly affect the item under review (e.g., price or margin) or that reasonably comparability adjustments can be made to eliminate the impact of such differences. To determine the comparability and then make the comparability adjustments necessary to establish arm's length terms, it is suitable to compare the characteristics of the transactions or businesses that would affect the terms of the transactions at arm's length.
Legal ReferenceNote commune n°11/2020.
No. There is no hierarchy between internal and external comparables; it is recommended to look for the most reliable comparable among those available.
Legal ReferenceNote commune n°11/2020.
No. Domestic tax legislation does not require comparability adjustments, however, the above-mentioned note commune n°11/2020 has provided the opportunity to make comparability adjustments to eliminate the impact of differences. The mentioned note commune specified that to determine the degree of effective comparability and make the comparability adjustments necessary to establish arm's length terms, it is required to compare the characteristics of the transactions or businesses that would affect the terms of the transactions at arm's length.
No. Domestic tax legislation nor note commune 11/2020 provides specific provisions regarding controlled transactions involving intangibles. The general transfer pricing provisions contained in such regulations would apply.
Legal ReferenceNote commune n°11/2020.
No. Domestic tax legislation does not provide transfer pricing rules or specific measures for hard-to-value assets.
Legal ReferenceNote commune n°11/2020.
No. Domestic tax legislation has not provided specific guidance for transactions related to intra-group services. However, note commune n°11/2020 has specified that in the case of services provided on a routine basis by companies that do not assume significant risks (e.g. subcontractors), the cost plus method is strongly recommended. Similarly, in the case of transactions related to the provision of services, the transactional net margin method could be used.
Legal ReferenceArticle 15, LF 2021
No. Domestic tax legislation has not provided specific guidelines for transactions related to low value-value adding intra-group services.
No. Companies residents and established in Tunisia with links to other companies of the same group that do not fall within the scope of tax legislation on transfer pricing remain, in respect of their transactions with these companies, subject to other control rules provided by the tax legislation in force and the administrative doctrine adopted in this regard, notably the one based on the criterion of the abnormal act of management. This principle is recognised by tax control services as well as by case law.
Legal ReferenceNote commune n°11/2020.
Yes. Domestic tax legislation does not provide specific guidance for financial transactions. However, note commune n°11/2020 has clarified that in the case of financial transactions (interest rates on loans, guarantee fees, etc.), the comparable price method could be applied to determine transfer prices.
Legal ReferenceArticle 48 (paragraph VII) of the code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés.
Yes. The interest paid to partners in respect of sums they pay or leave at the disposal of the company in addition to their share in the share capital is deductible within the limit of the 8% rate provided that the amount of interest-bearing sums does not exceed 50% of the capital and that the latter is fully released. Interest not settled or settled at a lower rate in respect of sums made available by the company to partners are included in the results subject to tax at the rate of 8%,. These provisions also apply to funds made available between subsidiaries of the same group. These provisions do not apply to banks. In those cases, the determined interest rate is the one applied for credits with third parties.
Legal ReferenceArticle 59 (paragraph II bis) of the code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés. Note commune n°13/2020.
- Master file consistent with Annex I to Chapter V of the TPG (selected)
- Local file consistent with Annex II to Chapter V of the TPG (selected)
- Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
- Specific transfer pricing returns (separate or annexed to the tax return) (selected)
Legal ReferenceDocuments justifying the transfer pricing policy: Code des droits et procédures fiscaux, article 38 bis; Article 35, number 12 of the loi de finances pour l'année 2019; Order of the Finance Minister of October 16, 2009 (Arrêté2019_4278) on the content of the documents justifying the transfer pricing policy; Note commune 13/2020. Country by country declaration: Code des droits et procédures fiscaux, article 17 ter; Arrêté du ministre des finances du 16 octobre 2019; Note commune n°14/2020. Annual transfer pricing declaration: Code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés, article 59, para II bis; Note commune 12/2020.
Documents justifying the transfer pricing policy (master file and local file): Companies with annual revenues excluding tax of at least TND 200 million that carry out transactions with related companies must file documentation. The production schedule is identical to the submission schedule of the annual corporate income tax return. Documents must be presented at the beginning of an in-depth audit. Language: local file in Arabic or French; master file in Arabic, French or English. Country by country declaration: Applies to companies with annual consolidated revenues of at least TND 1 636 million. Must be filed within twelve months after the closing date of the reporting year. Language: English or French. Annual transfer pricing declaration: Companies linked to other companies with annual gross turnover ≥ TND 200 million must submit it by reliable electronic means within the same timeframe as the corporate income tax return. Language: Arabic or French.
Legal ReferenceCode des droits et procédures fiscaux; article 84 undecies, article 84 decies, article 84 nonies.
Yes. Penalties applicable to breaches of the documentary obligation: fine equal to 0.5% of the amount of the transactions concerned with a minimum of TND 50 000 per fiscal year audited. Penalties for breaches of CbCR: fine equal to TND 50 000 and TND 100 per piece of missing/inaccurate information (max TND 10,000). Penalties for breaches of the annual declaration: fine equal to TND 10 000 and TND 50 per piece of missing/inaccurate information (ceiling TND 5 000 per fiscal year).
Legal ReferenceArticle 59 of the code de l'impôt sur le revenu des personnes physiques et de l'impôt sur les sociétés. Article 15 of la loi n° 2020-46 du 23 décembre 2020, enacting the Finance Act for the year 2021.
Transfer pricing documentation: The obligation does not apply to: - Domestic companies with annual turnover < TND 200 million, - All local transactions between related companies, - Transactions whose annual amount < TND 100 000 (exemption for local file only). Transfer pricing annual declaration: The obligation is limited to domestic companies with annual turnover ≥ 200 million dinars that are dependent on or control other resident or established abroad companies. Information is limited to transactions ≥ TND 100 000.
Legal ReferenceArticle 35 bis of the code des droits et procédures fiscaux; Arrêté du ministre des finances du 6 août 2019; Note commune 12/2020; Note commune n°23/2019; Tunisia’s MAP Profile.
APAs: Article 33 of Law No. 2018-56 allows resident companies belonging to an MNE group to request advance pricing agreements for future transactions for a period of 3 to 5 years. Mutual agreement procedures: MAP are regulated by commune n°23/2019 on the implementation of the procedure provided for by double taxation conventions.
- Rulings (not selected)
- Enhanced engagement programs (not selected)
- Advance Pricing Agreements (APA) (selected)
- Unilateral APAs (selected)
- Bilateral APAs (selected)
- Multilateral APAs (selected)
- Mutual Agreement Procedures (selected)
- Other (please specify) (not selected)
Legal ReferenceNote commune n°2/2015 dealing with the principles and modalities of taxation of Tunisian sourced incomes realized by residents of countries having concluded a double taxation agreement with Tunisia.
Yes. All double tax treaties concluded by Tunisia contain an article that deals with corporate profits (equivalent to article 7 of the OECD Model Tax Convention). None of the double tax treaties contain the new version of Article 7 (OECD MTC 2010 and later versions); the old version is adopted. Under these treaties, profits attributed to the PE are those it would have realised if it had constituted a separate company acting independently from the head office. In accordance with note commune n°2/2015, only profits realised within the framework of the PE and arising from its main activity (plus exceptional/accessory) are attached to it. Tunisia also applies the concept of the attractive force of the permanent establishment in certain treaties.
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