Harmonisation of transfer pricing regulations with international standards
Following the adoption by Tunisia of the minimum OECD standards relating to the BEPS (Base Erosion and Profit Shifting) Project, and following the implementation of Action 13 relating to the documentation of transfer pricing and country-by-country reports, the 2019 and 2021 Finance Laws have introduced declarative and documentary transfer pricing obligations for cross-border controlled transactions applicable to Tunisian companies having a dependency or control relationship with other entities established abroad.
It should be noted that companies are considered to have dependency or control relationships with other companies if one of them owns more than 50% of the share capital or voting rights in the other company, or has an effective decision-making right, or are controlled by the same company/person (control is defined under the same conditions).
This new regulation is applicable for fiscal years starting on 1 January 2020 and the obligations are summarised as follows:
- An obligation to file an annual transfer pricing declaration within the same deadlines as the corporate tax return, for established companies in Tunisia, having a dependency or a control relationship with other entities established abroad and which have an annual non-consolidated turnover excluding VAT higher or equal to TND 200 Million (approximately EUR 60 million).
The transfer pricing annual declaration includes, in particular, transfer pricing policy information applied by the group, and information relating to transactions with companies having a dependency or control relationship.
Sanctions: Administrative tax fine equal to TND 10,000 (approximately EUR 3,000). Any information not provided, or provided in an incomplete or inaccurate manner, gives rise to the application of a fine equal to TND 50 (approximately EUR 15) per item, up to a maximum of TND 5,000 (approximately EUR 1,500).
- An obligation to present, if subject to a Tax audit, supporting documents, the local file and the Master file (if applicable), justifying the transfer pricing policy applied for cross-border transactions higher than or equal to TND 100,000 dinars (approximately EUR 30,000).
Sanction: Administrative tax fine equal to 0.5% of the amount of transactions, with a minimum of TND 50,000 (EUR 15,000) per fiscal year.
- An obligation to file, within twelve months of the fiscal year end, a country-by-country declaration (CbCR), according to a model established by the Tunisian tax authorities. This obligation applies to any company that :
- Is required to prepare consolidated financial statements;
- Owns or controls one or more companies established abroad, or has direct or indirect subsidiaries abroad;
- Has in the previous year a consolidated annual turnover excluding taxes higher or equal to TND 1,636 million (approximately EUR 750 million);
- Is not owned by a company resident in Tunisia having to file this declaration, or by a company resident or established abroad having to file a similar declaration under foreign legislation.
Sanctions: Administrative tax fine equal to TND 50,000 (EUR 15,000). Any information not provided, or provided in an incomplete or inaccurate manner, gives rise to the application of a fine equal to TND 100 (approximately EUR 30) per item, up to a maximum of TND 10,000 (approximately EUR 3,000).
- Companies having a dependence or a control relationship with other entities established abroad may ask the Tunisian tax authorities to conclude an Advance Pricing Agreement (APA) on the Transfer pricing method relating to specific cross-border controlled transactions for a period ranging from three to five years.