The registrant must remain subject to VAT for a four-year period starting from the day the option becomes effective (see above) until 31 December of the fourth year following the one during which the registration for VAT took place. No deregistration is possible during this period.
In case of deregistration, a written request is to be filed with the relevant Tax Authorities three months before the expiry of the four-year period. Failing that, the registration will be tacitly renewable for four years each time.
Deregistration is not possible in the case of compulsory liability for VAT.
In case of voluntary registration, the deregistration is to be made by a written application to be filed with the relevant tax authorities within the three months before the end of the four-year registration period.
Output VAT is calculated on the basis of the amount of the invoice excluding VAT.
The VAT rate to be applied depends on the nature of the goods or services to be provided.
Exemptions and zero rating
The VAT exemptions include, but are not limited to:
retailing of foodstuffs, medicines, pharmaceuticals and products that are subject to the government homologation of prices;
education services and certain IT training services;
books, brochures and similar products (other than those made with leather);
certain agricultural products and equipment;
aircraft intended to be used in public air transport, and related equipment;
air and shipping transport, country- collective transport;
bank interest derived from deposits; and
sale by a property developer of apartment buildings exclusively intended for residential purposes.
VAT exemptions also apply to sales defined as exports, which means sales of goods and services to entities not located in Tunisia, as well as sales to wholly exporting entities governed by the Incentives Investment Code, to companies based in free zones, to offshore banks and to certain other entities benefiting from a VAT exemption.
Zero-rated supplies The zero rate does not apply in Tunisia.
Input tax allowed
Individuals and companies that are subject to VAT may deduct the input VAT incurred on the purchase of goods and services necessary to carry out activities subject to VAT.
Input tax expressly denied
VAT incurred on the following expenses may not be deducted as input VAT:
purchases of passenger cars other than those that constitute the main activity of the business;
expenses related to the functioning or maintenance of passenger cars;
VAT unduly charged (charged by mistake by a supplier who is not liable for VAT); and
VAT mentioned on invoices that do not comply with the VAT requirements, i.e. invoices that do not mention the compulsory information, such as the amount excluding VAT, rate and amount of the VAT, amount including VAT and the name and address of the client.
Partial exemption applies if the company is carrying on two or more activities and one or several activities are not subject to VAT. In this case, the input VAT to be deducted is a portion of the whole input VAT incurred. This portion is calculated by multiplying the total amount of the input VAT by a quotient where:
the numerator is the total amount of the turnover subject to VAT plus the turnover realised from exportations increased by the hypothetical VAT (due on the turnover derived from exportation), plus the turnover realised from sales made to persons allowed to acquire goods and services necessary for their activities VAT free, based on a certificate issued by the Tax Authorities, and
the denominator is the total amount of the numerator increased by the turnover realised from sales exempt from VAT and sales outside the scope of VAT.
During the course of the year, the company deducts the input VAT on a pro rata basis (as described above). The quotient applied is calculated by using the data of the previous year. At the end of the current year, the company must calculate the quotient to be applied and corresponding to that year. If the difference exceeds 5%, the company must adjust the input VAT.