Published on and written by Cyril Jarnias
Understanding Tunisian Taxation while living abroad but earning income in Tunisia or owning real estate there has become a major concern for many expatriates and Tunisians residing abroad. Between income tax, property tax, double taxation treaties, and specific benefits granted to Tunisians Residing Abroad (TRE), the tax landscape is both structured and technical, but far from illegible if one masters its key principles.
This article details tax obligations in Tunisia for expatriates, whether Tunisian or foreign, regarding income tax and real estate taxation. It is based on an analysis of Tunisian tax texts and official commentaries to provide a clear view of rights and duties towards the tax administration.
Tax Residence, Non-Residence, and Tunisian Residing Abroad Status
Any reflection on taxation in Tunisia begins with a seemingly simple question: are you a tax resident or a non-resident?
Under Tunisian law, an individual is considered a tax resident if they have their habitual residence in Tunisia, stay there for more than 183 days per year, or have the center of their main economic interests or professional activity there. In this case, they are taxable in Tunisia on their worldwide income, subject to international tax treaties.
An individual is considered a non-resident in Tunisia for tax purposes if their habitual residence is located abroad and they do not meet any of the criteria defining Tunisian tax residence. In this situation, Tunisia can only tax Tunisian-source income, such as rental income received, salaries paid by a Tunisian employer, or local real estate capital gains.
For Tunisians established abroad, a specific notion plays a decisive role: that of “Tunisian Residing Abroad” (TRE). The administrative definition essentially holds that a TRE is any Tunisian citizen who has resided for more than two years in a foreign country and whose total stay in Tunisia does not exceed 180 days per 365-day period. For the application of exchange regulations, a very similar definition exists, with a cap of 183 days of stay during the two years preceding the last entry into Tunisia.
The Tunisian Residing Abroad (TRE) status offers concrete tax benefits. In accordance with Article 36 of the Tax Code, TREs who declare and prove their income in their country of residence are not taxable in Tunisia on this foreign income (salaries, pensions, etc.) and do not have to declare it there, provided they are tax compliant abroad.
For foreign expatriates, the logic is more classic: if they acquire tax residence in Tunisia (presence, center of interests, home), they become taxable on their worldwide income; if they remain non-residents, only the Tunisian portion of income is concerned.
Expatriate Income Tax: Who is Taxed, on What, and How?
The Individual Income Tax (IRPP) encompasses several categories of income: industrial and commercial profits, non-commercial profits (liberal professions), agricultural and fishing income, wages and salaries, pensions and life annuities, income from moveable capital, property income, and, more broadly, certain miscellaneous income (e.g., certain gambling winnings or unexplained increases in wealth).
For an expatriate, three main situations are most common: salary, pension (especially of foreign origin transferred to Tunisia), and property income from real estate located in the country.
Progressive Scale and Deduction Mechanism
Tunisian IRPP is calculated according to a progressive scale. Several grids coexist in recent texts, reflecting the successive changes in the finance law. A scale frequently cited for annual income can be summarized as follows.
| Annual Income Bracket (TND) | Indicative Tax Rate |
|---|---|
| 0 – 5,000 | 0% |
| 5,001 – 10,000 | 15% |
| 10,001 – 20,000 | 25% |
| 20,001 – 30,000 | 30% |
| 30,001 – 40,000 | 33% |
| Over 40,000 | 35% (or even more depending on the cited scales) |
In some documents, other brackets are mentioned, with, for example, a rate peaking at 40% for very high incomes. The essential idea remains the same: the higher the income, the more the marginal portion is taxed at a significant rate.
Annual limit for the 10% standard deduction applicable to gross salaries and wages.
Regarding pensions and annuities of foreign origin transferred to Tunisia, a particularly favorable regime exists: if this income is not taxed abroad and is paid into a Tunisian bank account (or introduced in cash with proper customs declaration), the Tunisian tax authorities only consider 20% as the taxable base. In other words, 80% of the gross amount benefits from an allowance, resulting in very reduced taxation of these pensions.
Finally, for property income – i.e., rental income received from real estate located in Tunisia – the legislation provides, in the absence of detailed accounting, a standard 20% allowance for expenses and charges. Therefore, only 80% of gross rental income is subject to the progressive scale.
Salaries and Expatriation Assignments
When an expatriate works in Tunisia, the basic rule is that salaries are taxable in the country where the activity is physically performed, unless exceptions provided by tax treaties apply. For a non-resident, the salary remains taxable in Tunisia as long as the remuneration is paid by a Tunisian employer or borne by a permanent establishment in Tunisia.
For non-residents, the employer must withhold tax at source, without considering family allowances. This tax can be either final or constitute an advance payment that will be credited against the annual tax, depending on the situation.
For Tunisians seconded abroad by a Tunisian employer, the logic is reversed: the remuneration may remain taxable in Tunisia if it is not taxed in the host country, or if the duration and employer charge conditions provided for in the treaties are not met. However, certain expatriation bonuses paid for assignments abroad are exempt, which notably aims to promote service exports.
Pensions, Annuities, and Favorable Regimes
Many Tunisians retired abroad consider transferring all or part of their pension to Tunisia, attracted by the cost of living and the possibility of investing there. For these profiles, the mechanism of an 80% allowance on transferred foreign pensions is decisive.
A retiree receives an annual foreign pension of 30,000 TND, fully transferred to Tunisia and not taxed in the country of origin. After the 80% allowance provided by Tunisian law, the taxable base is reduced to 6,000 TND (30,000 TND – 80%). The tax is then calculated by applying the progressive scale to this base of 6,000 TND, significantly reducing the tax burden compared to taxation without this specific allowance.
This regime is, however, granted only under formal proof conditions of the transfer or physical introduction of funds (customs declaration, bank statements), which must not only exist but also be attached to the income tax return filed with the Tunisian tax administration.
Income from Moveable Capital and Interest
Tunisia reserves favorable treatment for certain financial income, which interests expatriates placing their savings in foreign currency or convertible dinars. Interest on deposits and securities issued in foreign currency or convertible dinars is exempt from income tax and the 20% withholding tax.
Also exempt, within certain limits, are interest from housing savings accounts and special savings accounts opened at the National Savings Bank of Tunisia or in banks. Furthermore, dividends paid by Tunisian companies are exempt from IRPP for individuals as long as they do not exceed 10,000 dinars per year.
For non-residents, dividends received from Tunisian companies benefit from a particularly flexible regime: the distribution is no longer subject to withholding tax since the early 1990s. Again, bilateral tax treaties may modify or specify these principles.
Foreign-Source Income and Double Taxation Treaties
The major tax challenge for expatriates is not only to know how much they will pay in Tunisia, but also to ensure that the same income is not taxed twice, once in the country of residence and a second time in Tunisia.
Tunisia has signed more than 50 double taxation treaties, notably with France, Belgium, Italy, Canada, Switzerland, and Morocco. These agreements organize the allocation of taxing rights between the contracting states according to the nature of the income (salaries, pensions, dividends, interest, royalties, real estate income, capital gains, inheritances, etc.).
When income (e.g., a French salary) is taxed in the source country, Tunisia, as the taxpayer’s country of residence, must grant a tax credit equal to the amount paid abroad. This credit is limited to the amount of Tunisian tax that would have been due on the same income. This practical mechanism avoids double taxation.
The treaties also include a non-discrimination clause, which prohibits Tunisia from treating a national of a signatory country less favorably than a Tunisian in a comparable situation. Another structuring principle: the “no more burdensome” rule, according to which a treaty cannot result in taxing a taxpayer more heavily than Tunisian domestic law would. If Tunisian law is more favorable than the treaty, it applies.
For Tunisians residing in a country without a double taxation treaty with Tunisia, the Tunisian tax administration could theoretically claim tax on foreign income if tax residence is in Tunisia. However, authorities have clarified that no new repressive measures have been adopted against Tunisians Residing Abroad (TRE). Thus, those who can justify paying tax in their host country are not required to pay it again in Tunisia.
Property Income: Rental Income, Capital Gains, and Local Taxation
From the expatriate’s perspective, Tunisian real estate taxation breaks down into three parts: taxes on property income (rental income), taxation of capital gains upon resale, and local taxation (property tax, tax on undeveloped land, registration fees).
Renting Property in Tunisia While Living Abroad
An expatriate who owns an apartment or house in Tunisia and rents it out earns Tunisian-source income, taxable in Tunisia even if they are a non-resident taxpayer. The net property income is determined by applying, in the absence of accounting, a standard 20% allowance on gross rental income, with the remainder included in the IRPP taxable base.
In some cases, and notably for non-residents who do not carry out any professional activity in Tunisia, a final withholding tax on rental income may be applied (15% on the amount, with specific reductions for hotels). For expatriates who have a structure or commercial activity in Tunisia, rental income may be taxed as professional profits.
Double taxation treaties generally confirm the following principle: real estate income is taxable in the state where the property is located. A Tunisian residing in France and renting an apartment in Tunis will therefore pay tax on this rental income in Tunisia, and France will possibly grant a tax credit if it takes this income into account.
Real Estate Capital Gains: Taxation Upon Resale
When an expatriate sells real estate located in Tunisia at a capital gain, it is, in principle, taxable. For non-resident individuals, the following scheme is generally applied: the capital gain base is constituted by the difference between the sale price and the acquisition price increased by a standard indexing coefficient (10% per year of ownership, according to tax doctrine indications).
Rate of the withholding tax due on the acquisition price when a property is sold by a non-resident to a buyer required to make this withholding.
For foreign companies selling property in Tunisia, the capital gain may be taxed under corporate income tax at the standard rate (generally 25%) on the net capital gain; otherwise, a final withholding mechanism of 15% on the sale price may apply, with an option for taxation on the actual gain.
According to tax treaties, capital gains realized on real estate are generally taxable in the state where the property is located. For example, the sale of an apartment in Tunis will be taxed in Tunisia, even if the seller is a tax resident of another country. This rule applies in particular to Tunisians Residing Abroad (TRE), who remain liable for Tunisian tax on their local real estate disposals, regardless of the fact that their other income is taxed exclusively abroad.
Property Tax and Other Local Taxes
Beyond IRPP, expatriate property owners in Tunisia are also subject to local taxation. There is a tax on built-up property, a tax on undeveloped land, and, in some cases, a local tax on industrial, commercial, or professional establishments (TCL).
The tax on undeveloped land is due by the owner or usufructuary. When a reference market value exists, the tax is 0.3% of that value. Otherwise, a per-square-meter scale is applied depending on the density of the urban area, resulting in different unit amounts between high and low-density zones.
For built-up properties, the calculation method is more technical. The texts provide a system based on a reference price per square meter of covered area, depending on the property category (size, standard), to which a percentage is applied. In practice, for an expatriate reader, it is more useful to remember the order of magnitude communicated in the documentation: the property tax on built-up properties generally represents between 0.2% and 0.5% of the cadastral value (theoretical rental value), with significant variations depending on municipalities and the nature of the property.
This mechanism can be illustrated with a commonly used numerical example.
| Example Data | Value |
|---|---|
| Cadastral value of the apartment | 300,000 TND |
| Property tax rate applied by the municipality | 0.3% |
| Annual property tax amount | 900 TND |
To this property taxation may be added, for properties used for professional purposes, the well-known TCL (tax on premises used for industrial, commercial, or professional purposes), calculated at 0.2% of local turnover and 0.1% of export turnover, with a minimum equal to the amount of property tax paid on the premises used.
Unlike other countries, there is no general wealth tax specifically targeting the entire real estate assets of expatriates. However, since 2023, a specific contribution on real estate wealth (often likened to a tax) targets very high real estate assets.
Significant Real Estate Assets: The Wealth Contribution
The 2023 finance law introduced a real estate wealth tax affecting individuals holding net real estate assets (after deduction of certain debts) with a market value of at least 3 million dinars. The single rate is 0.5%.
This threshold is assessed taking into account all real estate assets, whether held directly or through real estate companies, both in Tunisia and abroad for Tunisian residents. For non-residents, only assets located in Tunisia are included in the tax base.
Primary residences are expressly excluded, as are properties used for a professional activity when actually carried out by the owner. However, secondary residences and rental properties are fully included in the calculation.
The tax must be declared and paid before June 30 of each year to the competent tax collector. It also applies to assets belonging to dependent minor children. For a wealthy expatriate owning several properties in Tunisia, this measure can represent a significant charge and deserves in-depth estate analysis.
Buying and Holding Real Estate in Tunisia as an Expatriate
For an expatriate wanting to invest in real estate in Tunisia, several levels of rules combine: exchange regulations, financing conditions, registration fees, property tax, taxation of income and capital gains. The situation differs depending on whether the investor is a foreigner, a TRE, or a “classic” Tunisian resident.
Exchange Regulations and Investment Declaration
Any investment made in Tunisia by a non-resident individual and financed in foreign currency must be declared to the Central Bank of Tunisia, via an “investment bulletin.” This document certifies that the financing indeed comes from a foreign currency contribution – wire transfer from abroad, debit from a foreign currency or convertible dinar account, or physical import of banknotes declared to customs.
The investment bulletin is essential for repatriating income (dividends, net rental income) and the proceeds from the disposal or liquidation of the investment in foreign currency. Without this document, transferring funds abroad becomes much more complex.
In the case of a real estate purchase, the non-resident must generally open a convertible dinar account with a Tunisian bank, funded by a Swift transfer from abroad. The payment of the sale price to the seller is then made in dinars, but the foreign currency origin is traced, guaranteeing, in theory, the possibility to reconvert and repatriate the funds upon resale.
Tunisians Residing Abroad: Specific Real Estate Benefits
Tunisians Residing Abroad benefit from favorable treatment for acquiring real estate in Tunisia, provided they comply with certain formalities and register with the Tunisian consulate in their country of residence.
When a TRE purchases a built property (housing or premises for economic use, excluding agricultural land) and finances the acquisition in foreign currency, they benefit from the following regime:
The proportional registration fees on the deed of sale are replaced by a fixed fee of 30 dinars per page. Only a land conservation fee of 1% on the property value remains. Finally, the transaction is excluded from the complementary fees of 2% or 4% applicable to transactions amounting to 500,000 dinars or more.
In practice, the combination of a low fixed fee and the exemption from proportional fees can represent significant savings compared to the standard regime, where the sale of a property is normally registered at 5% of its price.
To benefit from the TRE regime, the file must be particularly complete. It must include full copies of the passport and foreign residence permit, the sales contract, a travel record justifying non-residence in Tunisia, a bank statement proving the transfer of the price in convertible foreign currency, and proof of transfer of the amount to the seller in Tunisian dinars. For a purchase intended for an economic project, a copy of the investment declaration is also required.
Registration Fees and VAT on Acquisitions
Outside this preferential regime, real estate acquisitions remain subject to the registration fees provided by Tunisian law. The sale of a property is, in principle, taxed at 5% of its price. Certain special cases benefit from reduced rates or derogatory regimes.
For acquisitions of new housing from property developers, VAT at the rate of 18% may be due on the sale price, increasing the overall bill. Conversely, some buildable land or properties intended for economic activities under an investment regime can benefit from reduced registration fees of a fixed fee of 20 dinars per page or mitigated progressivity.
For expatriates, the issue is not only the level of fees but also the ability to resell and repatriate the proceeds to their country of residence, which refers back to the non-resident status recognized by the Central Bank and the traceability of the initial financing.
Case of Tunisians Residing Abroad: Non-Taxation of Foreign Income and Non-Taxation Certificates
Political and media debate in Tunisia has focused a lot in recent years on the fear of double taxation of TREs on their foreign-source income. Rumors of a “hunt for expatriates” pushed the Ministry of Finance and several experts to clarify the official doctrine.
A Tunisian Residing Abroad (TRE) who meets the conditions for non-tax residence and declares their income in their host country, providing the necessary proof (tax assessments, tax certificates), is not subject to double taxation in Tunisia. They also have no obligation to file an annual income tax return in Tunisia for this income received abroad.
To secure their situation, TREs can request a non-taxation certificate from the relevant tax control office, based on the address indicated on their national identity card. A model of this certificate is available on the Ministry of Finance website. This document can be useful to prove to banks or foreign authorities that Tunisia does not claim additional tax from them on their foreign income.
Tunisians Residing Abroad (TRE) remain subject to Tunisian tax on their local-source income (e.g., rental income, real estate capital gains). This income is generally not covered by double taxation treaties. The expatriate must therefore declare this income to the Tunisian authorities, regardless of their obligations in their country of residence.
Between Tunisian Taxation and Host Country: Practical Articulation for Expatriates
The complexity of expatriate taxation does not come only from Tunisian texts; it lies mainly in the articulation with the tax systems of host countries and international treaties.
A French expatriate established in Tunisia, for example, must navigate the Franco-Tunisian treaty of 1973, as amended by the multilateral instrument to combat base erosion. This treaty essentially provides that:
Salaries are taxable in the state where the activity is exercised, except for short stays if the remuneration is not borne by a local employer. Public pensions are taxable in the paying state, and private pensions in the state of residence. Real estate income is taxed in the country where the property is located. Dividends, interest, and royalties may be taxed in both states, with a tax credit applied by the state of residence.
In practice, this means that a French tax resident in Tunisia who receives a French private pension must generally declare it in Tunisia, while benefiting from a tax credit corresponding to any withholding tax applied in France. If they also receive rental income from a property located in France, this rental income is taxable in France, and Tunisia only takes it into account to determine the effective rate to apply to other income, or grants a tax credit, according to the method provided by the treaty.
To understand the taxation of international income, it is essential to distinguish: the country of tax residence, the country of origin of the income, the applicable tax treaties, and specific allowance regimes, such as the one concerning foreign pensions transferred to Tunisia.
For a Tunisian expatriate in a country without a treaty, vigilance is even more necessary: they must be able to prove to the Tunisian administration, if considered a resident, that their foreign income has already been taxed, to avoid any form of economic double taxation.
Practical Advice for Expatriates and Tunisians Residing Abroad
Given the density of texts and the increasing importance of automatic exchange of information between tax administrations (Tunisia has committed to applying the OECD’s automatic exchange of information standard), some practical reflexes are essential for expatriates.
First, clarify your tax residence and filing obligations. A prolonged stay in Tunisia, a permanent return, or conversely a long-term departure abroad can radically change the scope of taxation. The center of economic interests (activity, main assets, family) weighs heavily in the analysis, beyond the simple 183-day criterion.
It is crucial to keep and centralize all supporting documents (foreign tax assessments, bank statements, customs declarations, acquisition/sale deeds, Central Bank investment bulletins). In case of an audit, these documents often determine whether the procedure will be a simple regularization or a heavy reassessment.
It is just as crucial to comply with filing obligations: even when a taxpayer benefits from an exemption (for example, a newly created business or certain export activities), Tunisian law often requires filing an annual return under penalty of a 1% fine on undeclared amounts.
For real estate or entrepreneurial investments in Tunisia, it is strongly recommended to rely on local advice (lawyer, accountant, or tax specialist in international taxation). Favorable schemes for Tunisians Residing Abroad, such as registration fee exemptions, benefits for importing a vehicle, or special regimes for the equipment of an economic project, apply only after scrupulous compliance with the procedures established by law and the Central Bank.
In an environment where exchange regulations are gradually moving closer to international standards and cooperation between tax administrations is intensifying, a good understanding of Tunisian taxation – particularly income tax and property tax – becomes a decisive asset for any expatriate wishing to benefit from Tunisia’s advantages without being exposed to unpleasant tax surprises.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
