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Tunisia VAT on foreign digital services

Mix of VAT, withholding tax and royalty tax can apply

Tunisia imposes a mix of Value Added Tax, Withholding VAT and software 5% royalty (Digital Services Tax) taxes on non-resident sellers or marketplaces providing digital services to consumers. B2C transactions are generally zero-rated, with the Tunisian resident business reporting the transaction for VAT via the reverse charge.

The current VAT rate in Tunisia is 19%.  VAT Calc’s global VAT and GST on digital services blog keeps a live update on how countries are imposing indirect taxes on non-resident providers and electronic marketplaces.

There are no detailed rules on the supply of digital or intangible services to consumers in Tunisia. The general rule is that a supply in the country to a consumer for consumption is subject to VAT. Generally, the sale of software and / or internet supplies services by a non-resident are liable to VAT and royalties.

What Tunisian taxes are due on digital intangibles

Tunisia imposes potentially three models of taxation on non-resident providers of digital services:

  1. Withholding VAT: if the provider is not VAT registered, the customer must withhold the VAT from their payment. The provider should therefore gross up their price to include Tunisian VAT. The consumer should register and pay this Withholding VAT with the Ministry of Finance and obtain a special receipt, ‘discharge certificate’.
  2. VAT Registration: as an alternative to Withholding VAT, the non-resident may choose to VAT register to avoid the inconvenience of having their customer report the Withholding VAT. This does not require a VAT Fiscal Representative. VAT returns are due on a monthly basis. Filings are due by 15th of the following month.
  3. 3% Royalty Tax: which was imposed from 1 January 2020 on all non-resident sales of software and internet-provided services. In effect, a Digital Services Tax. This is in addition to VAT due. Non-residents subject to software Royalty Tax must register, and file quarterly returns to report and pay the tax.

Africa & Middle East VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Algeria 9% Jan 2020 Nil
Angola 14% Oct 2019
Bahrain 10% Jan 2019 Nil
Cameroon 19.5% Jan 2020 XAF 50 million
Egypt 14% Sep 2016 EGP 500,000
Ghana 12.5% Apr 2022 GHS 200,000
Israel 17% 2022 Proposal in 2021/22 budget
Ivory Coast 18% 2022 -
Kenya 16% Sep 2013 -
Kuwait 5% Jan 2023? - TBC
Mauritius 15% 2020
Nigeria 7.5% Jan 2020 $25,000
Oman 5% Apr 2021 OMR 35,000
Rwanda 18% TBC
Saudi Arabia 15% Jan 2018 Nil
South Africa 15% Jun 2014 ZAR 1 million
Tanzania 18% Jul 2015 TZS 40 million Only resident
Tunisia 19% Jan 2020 Nil Withholding VAT; 3% Royalty Tax
Uganda 18% Jan 2020 Nil
United Arab Emirates 5% Jan 2018 AED 375,000
Zimbabwe 14.5% Jan 2020 Nil

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