Regulatory Alerts2010-06-07
Law No. 2010-29 of June 7, 2010, on Encouraging Companies to List Their Shares on the Stock Exchange
The Tunisian Parliament enacted Law No. 2010-29 to incentivize companies to list their ordinary shares on the Tunis Stock Exchange by reducing their corporate tax rate from the standard level to 20%, or 15% for companies taxed at 25%, provided a public float of at least 30% is maintained for five years. The legislation mandates that delisting during the incentive period triggers forfeiture of the tax benefit and payment of the rate differential plus late penalties, with limitation periods restarting from January 1 following delisting unless non-attributable reasons are certified by the Financial Markets Council. Furthermore, companies listing on the Alternative Market may deduct a graduated portion of their operating and exceptional profits over four years, subject to social security regularization and valid exchange certification.
Law No. 2010-29 of June 7, 2010, on Encouraging Companies to List Their Shares on the Stock Exchange.
In the name of the people, Having been adopted by the Chamber of Deputies and the Chamber of Councillors, The President of the Republic promulgates the law as follows:
Article 1 - The corporate tax rate provided for in the first and fourth paragraphs of Section I of Article 49 of the Personal Income Tax and Corporate Tax Code is reduced to 20% for companies that list their ordinary shares on the Tunis Stock Exchange, provided that the public float rate is at least 30%, for a period of five years from the year of listing.
This reduction is granted to companies that list their ordinary shares on the Tunis Stock Exchange during the period from January 1, 2010, to December 31, 2019 (amended by Article 25 of Law No. 2014-54 of August 19, 2014, establishing a supplementary finance law for the year 2014).
The 20% rate provided for in the first paragraph of this Article is reduced to 15% for companies subject to corporate tax at a rate of 25% that list their ordinary shares on the Tunis Stock Exchange as from January 1, 2017 (added by Article 12 of Law No. 2016-78 of December 17, 2016, establishing the finance law for the year 2017).
1 As amended and supplemented by Law No. 2014-54 of August 19, 2014, establishing a supplementary finance law for the year 2014; Law No. 2016-78 of December 17, 2016, establishing the finance law for the year 2017; and Law No. 2019-78 of December 23, 2019, establishing the finance law for the year 2020.
The provisions of this Article do not apply to the enterprises referred to in the sixth, seventh, eighth, and ninth sub-paragraphs of the fourth paragraph of Section I of Article 49 of the Personal Income Tax and Corporate Tax Code.
Article 2 - The delisting of shares of companies covered by Article 1 of this Law from the Tunis Stock Exchange during the five years benefiting from the incentive results in the forfeiture of the benefit and the payment of the difference between the tax due at the rates provided for in the first and fourth paragraphs of Section I of Article 49 of the Personal Income Tax and Corporate Tax Code and the tax due at the rate of 20% or 15%, as applicable, plus late payment penalties assessed under the prevailing fiscal legislation.
In such cases, the limitation periods provided for in Article 19 of the Code of Tax Rights and Procedures begin to run from January 1 of the year following the year in which the delisting occurred.
However, if the company provides a certificate issued by the Financial Markets Council justifying that the delisting occurred for reasons not attributable to it, the forfeiture of the benefit takes effect from the year of delisting.
Article 3 - Notwithstanding the provisions of Article 12 of Law No. 89-114 of December 30, 1989, promulgating the Personal Income Tax and Corporate Tax Code, companies that list their ordinary shares on the Alternative Market of the Tunis Stock Exchange and are subject to corporate tax at a rate not exceeding 25% deduct a portion of their operating profits from the first four years following the year of listing, as well as exceptional profits provided for in Section I bis of Article 11 of the Personal Income Tax and Corporate Tax Code, fixed as follows:
- 100% for the first year following the year of listing,
- 75% for the second year,
- 50% for the third year,
- 25% for the fourth year.
The benefit of the provisions of this Article is subject to the submission, together with the annual corporate tax return, of a certificate issued by the Tunis Stock Exchange confirming admission to the Alternative Market, as well as the regularization of the concerned company's status with social security funds.
The delisting of shares of companies covered by this Article from the Tunis Stock Exchange during the four years subject to the deduction results in the forfeiture of the benefit and the payment of unpaid corporate tax resulting from said deduction, plus penalties assessed under prevailing fiscal legislation; in such cases, the limitation periods provided for in Article 19 of the Code of Tax Rights and Procedures begin to run from January 1 of the year following the year in which delisting occurred.
However, if the concerned company provides a certificate issued by the Financial Markets Council justifying that delisting occurred for reasons not attributable to it, the forfeiture of the benefit takes effect from the year of delisting.
The provisions of this Article apply to companies that list their ordinary shares on the Alternative Market of the Tunis Stock Exchange during the period from January 1, 2020, to December 31, 2024. (added by Article 38 of Law No. 2019-78 of December 23, 2019, establishing the finance law for the year 2020).