Clarification on Tax Exemptions for External Financing
The General Directorate of Tax Studies and Legislation has issued a clarification, through its Common Note No. 9 published on March 18, 2026, on a major development introduced by the finance law. This measure aims to correct a disparity in the tax treatment of external financing for Tunisia's development.
Background
Until last year, the favorable regime of VAT suspension was strictly reserved for acquisitions financed by donations within the framework of international cooperation. In contrast, projects relying on foreign loans were subject to the common law regime, bearing VAT, consumption tax, and various taxes on turnover.
New Development
Article 44 of the 2026 finance law marks a turning point by extending this suspension mechanism to purchases financed by foreign loans. This refers to any financing concluded to support development-related expenses, whether it involves large infrastructure projects like bridges and dams or the acquisition of equipment and services related to investment.
Beneficiaries
This measure directly benefits public structures, including the state, local authorities, and public enterprises. It also applies to maintenance and management groups of industrial zones, provided their projects are recognized as being of public utility by decree.
Conditions
However, it is essential to note that this tax advantage exclusively targets investment. Expenses related to current operations, such as the purchase of raw materials or general expenses, remain excluded from this suspension, even when financed by these loans.
Key Points
- The General Directorate of Tax Studies and Legislation has clarified the tax exemption for external financing.
- The measure aims to correct a disparity in tax treatment for development projects.
- The suspension mechanism now applies to purchases financed by foreign loans.
- Public structures, including the state and public enterprises, are direct beneficiaries.
- The tax advantage is limited to investment-related expenses.
