Government Decree No. 2017-389 of March 9, 2017, on Financial Incentives for Investments under the Investment Law

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Page 1098 Journal Officiel de la République Tunisienne — 28 mars 2017 N° 25
The projected budget of the fund is submitted for approval by the council.
Art. 36 - The supervisory committee carries out, during the year and as appropriate, the reallocation of the current fiscal year's budget either at the request of the chairman of the supervisory committee or at the request of the general director. Art. 37 - Contracts concluded by the fund are subject to the principles of competition, transparency, and equal opportunity. The procedures and conditions for concluding and executing contracts are established by a specialized procedure manual approved by the supervisory committee. Art. 38 – The fund submits to the supervisory committee's approval:

• the fund's intervention strategy, during the first quarter of the year,
• the periodic evaluation of the fund's allocations quarterly,
• the annual activity report.

TITRE IV
Transitional and Final Provisions
Art. 39 - The General Directorate of Economic, Financial and Social Affairs at the Presidency of the Government is provisionally responsible for the permanent secretariat of the council until the relevant authority assumes its duties. Art. 40 - The authority may delegate supervision missions for investment operations costing fifteen million dinars or less to the relevant investment bodies, until the authority is established and exercises all its duties. Art. 41 - The remuneration and various bonuses granted to the authority's staff are fixed in accordance with those applied in the public banking sector by virtue of an order from the minister responsible for investment and upon proposal by the chairman of the authority, until the publication of their specific status. Art. 42 - The remuneration and various bonuses granted to the fund's staff are fixed in accordance with those applied in the public banking sector by virtue of an order from the minister responsible for investment and upon proposal by the fund's general director, until the publication of their specific status. Art. 43 - All prior provisions contrary to this government decree are repealed, notably Decree No. 2014-3629 of September 18, 2014, fixing the composition, powers, organization and operating procedures of the High Investment Commission, except for its Article 7 provisions. Art. 44 - This government decree enters into force from the date of entry into force of the Investment Law. Art. 45 - The Minister of Development, Investment and International Cooperation and the Minister of Finance are each responsible for executing this government decree, which will be published in the Official Journal of the Tunisian Republic. Tunis, March 9, 2017. For Counter-signature Minister of Finance Lamia Boujnah Zribi Minister of Development, Investment and International Cooperation Mouhamed Fadhel Abdelkefi Head of Government Youssef Chahed

Décret gouvernemental n° 2017-389 du 9 mars 2017, relatif aux incitations financières au profit des investissements réalisés dans le cadre de la loi de l’investissement.

The Head of Government,
On the proposal of the Minister of Development, Investment and International Cooperation, Having regard to the Constitution, Having regard to Law No. 60-30 of December 14, 1960, on the organization of social security schemes, as amended and supplemented by subsequent texts and notably Law No. 2007-51 of July 23, 2007, Having regard to Law No. 63-17 of May 27, 1963, encouraging State development in agriculture, as amended and supplemented by subsequent texts, Having regard to the Labor Code promulgated by Law No. 66-27 of April 30, 1966, as amended and supplemented by subsequent texts and notably Decree-Law No. 2011-51 of June 6, 2011,

N° 25 Journal Officiel de la République Tunisienne — 28 mars 2017 Page 1099 Having regard to the Public Accounting Code promulgated by Law No. 73-81 of December 31, 1973, as amended and supplemented by subsequent texts and notably Law No. 2015-53 of December 25, 2015, establishing the finance law for the year 2016, Having regard to Law No. 73-82 of December 31, 1973, establishing the finance law for the 1974 fiscal year and notably its Article 45, establishing the Industrial Promotion and Decentralization Fund, as amended and supplemented by subsequent texts, Having regard to Law No. 81-76 of August 9, 1981, establishing a National Fund for the Promotion of Crafts and Small Trades, as amended and supplemented by subsequent texts, Having regard to the Value Added Tax Code promulgated by Law No. 88-61 of June 2, 1988, as amended and supplemented by subsequent texts and notably Law No. 2016-78 of December 17, 2016, establishing the finance law for the year 2017, Having regard to Law No. 88-92 of August 2, 1988, on investment companies, as amended and supplemented by subsequent texts and notably Decree-Law No. 2011-99 of October 21, 2011, modifying legislation on venture capital companies and risk investment funds and easing intervention conditions, Having regard to the Personal Income Tax and Corporate Tax Code promulgated by Law No. 89-114 of December 30, 1989, as amended and supplemented by subsequent texts and notably Law No. 2016-78 of December 17, 2016, establishing the finance law for the year 2017, Having regard to Law No. 92-122 of December 29, 1992, establishing the finance law for the 1993 fiscal year and notably its Articles 35 to 37 on establishing the Pollution Abatement Fund, Having regard to Law No. 94-127 of December 26, 1994, establishing the finance law for the 1995 fiscal year and notably its Articles 37, 38 and 39 on establishing the Industrial Competitiveness Development Fund, Having regard to Law No. 96-112 of December 30, 1996, on the corporate accounting system, as amended and supplemented by subsequent texts, Having regard to Law No. 99-101 of December 31, 1999, establishing the finance law for the year 2000 and notably its Article 13 on establishing the National Employment Fund, as amended and supplemented by subsequent texts, Having regard to the Collective Investment Schemes Code promulgated by Law No. 2001-83 of July 24, 2001, as amended and supplemented by subsequent texts and notably Decree-Law No. 2011-99 of October 21, 2011, modifying legislation on venture capital companies and risk investment funds and easing intervention conditions, Having regard to Law No. 2005-15 of February 16, 2005, on the organization of the crafts sector, Having regard to Law No. 2016-71 of September 30, 2016, establishing the Investment Law, as amended and supplemented by Law No. 2017-1 of January 3, 2017, establishing the supplementary finance law for the year 2016, Having regard to Decree No. 78-578 of June 9, 1978, on the revision of
regulations regarding the Industrial Promotion and Decentralization Fund, as amended and supplemented by subsequent texts and notably Decree No. 2008-386 of February 11, 2008, Having regard to Decree No. 93-2120 of October 25, 1993, fixing the conditions and procedures for intervention by the Pollution Abatement Fund, as amended and supplemented by subsequent texts, Having regard to Decree No. 96-1563 of September 9, 1996, fixing the organization, operating rules and intervention methods for the Industrial Competitiveness Development Fund in agriculture and fisheries, as amended by Decree No. 2010-153 of February 1, 2010, Having regard to Decree No. 99-2741 of December 6, 1999, fixing the organization, operating rules and intervention procedures for the Industrial Competitiveness Development Fund, as amended and supplemented by subsequent texts and notably Decree No. 2008-2404 of June 23, 2008, Having regard to Decree No. 2005-1991 of July 11, 2005, on environmental impact studies and fixing categories of units subject to environmental impact studies and those subject to specifications, Having regard to Decree No. 2012-2369 of October 16, 2012, fixing programs for the National Employment Fund and their benefit conditions and procedures, as amended and supplemented by subsequent texts and notably Government Decree No. 2016-904 of July 27, 2016, Having regard to Government Decree No. 2016-1164 of August 10, 2016, on organizing the Ministry of Development, Investment and International Cooperation,

Page 1100 Journal Officiel de la République Tunisienne — 28 mars 2017 N° 25
Having regard to Presidential Decree No. 2016-107 of August 27, 2016, on appointing the Head of Government and its members, Having regard to Government Decree No. 2017-388 of March 9, 2017, fixing the composition and organizational procedures of the High Council of Investment, the administrative and financial organization of the Tunisian Investment Authority and the Tunisian Investment Fund, and its operating rules, Having regard to the opinion of the Administrative Court. Enacts the government decree as follows:

Titre premier
General Provisions
Article 1 - This government decree establishes:

• the rates, ceilings and conditions for benefiting from bonuses as well as the concerned activities provided for in Article 19 of the aforementioned Investment Law,
• national interest projects and the ceiling for the related investment bonus provided for in Article 20 of the aforementioned Investment Law,
• the rates, ceilings and conditions for benefiting from capital contributions provided for in Article 18 of the aforementioned Investment Law,
• the conditions and procedures for obtaining agricultural land loans in accordance with Article 27 of the aforementioned Investment Law,
• the model for the single declaration form, the list of "appendix" documents and the related procedures provided for in Article 15 of the aforementioned Investment Law.

Art. 2 - For the purposes of this government decree, the following terms shall mean:

• priority sectors: sectors characterized by their strategic vocation and capacity to increase the growth rate or high employability, enjoying priority in accordance with development plans,
• economic value chains: activities primarily based on valorizing useful and agricultural resources, natural and cultural heritage through industrialization and exploitation in production zones, contributing to value chain development by radically transforming the nature of products,
• small and medium-sized enterprises (SMEs): any enterprise as defined in Article 3 of the Investment Law with an investment volume not exceeding fifteen million dinars, including extension investments and working capital,
• clean technologies: any technique that rationally and efficiently uses raw materials, water or energy resources to limit pollutant emissions or significantly reduce waste from various industrialization stages or during the use of production materials.
• direct investment in agriculture, fisheries and aquaculture: investments in these sectors are classified as follows:

1. Category "A":

• investment in agriculture not exceeding two hundred (200) thousand dinars,
• investment in fisheries not exceeding three hundred (300) thousand dinars,
• investment in aquaculture not exceeding five hundred (500) thousand dinars,
• investments realized by agricultural service mutual societies and development groups in agriculture and fisheries.

2. Category "B":

• investment in agriculture exceeding two hundred (200) thousand dinars,
• investment in fisheries exceeding three hundred (300) thousand dinars,
• investment in aquaculture exceeding five hundred (500) thousand dinars,
• investments realized in services related to agriculture and fisheries, and primary processing of agricultural and fishery products.
  The list of services related to agriculture and fisheries, and primary processing activities is fixed in Annex No. 1 of this government decree.

N° 25 Journal Officiel de la République Tunisienne — 28 mars 2017 Page 1101 Titre II Rates, Bonus Ceilings and Concerned Activities Art. 3 - Direct investment operations benefit from the bonuses provided for in Article 19 of the Investment Law regarding the value-added and competitiveness bonus, regional development bonus, employability capacity development bonus, and sustainable development bonus as follows:

1. Value-added and competitiveness bonus:

• regarding direct investment operations in:
  • Priority sectors fixed in Annex No. 1 of this government decree: 15% of the approved investment cost with a ceiling of one (1) million dinars.
    This rate is reduced to 30% for Category "A" investments in agriculture, fisheries and aquaculture.
  • Economic value chains fixed in Annex No. 1 of this government decree: 15% of the approved investment cost with a ceiling of one (1) million dinars.
• regarding economic performance in the sector:
  • Material investments for mastering new technologies and improving productivity fixed in Annex No. 1: 50% of the approved investment cost with a ceiling of five hundred (500) thousand dinars.
    This rate is reduced to 55% for Category "A" investments in agriculture, fisheries and aquaculture, and to 60% for agricultural service mutual societies and development groups in agriculture and fisheries.
  • Intangible investments fixed in Annex No. 1: 50% of the approved intangible investment cost with a ceiling of five hundred (500) thousand dinars, including the studies bonus capped at twenty (20) thousand dinars.
  • Research and development fixed in Annex No. 1: 50% of approved R&D expenses with a ceiling of three hundred (300) thousand dinars.
  • Employee training leading to competency certification: 70% of the cost of training Tunisian employees leading to internationally standardized competency certification, with an annual ceiling of twenty (20) thousand dinars per enterprise.
    The material investment bonus for mastering new technologies and the intangible investment bonus are granted upon establishment. The material investment bonus regarding productivity improvement provided in Annex No. 1 is granted to direct investment operations as defined by Article 3 of the aforementioned Investment Law. The investment bonus granted for the agricultural sector is calculated based on the approved investment cost without taking land value into account.

2. Regional development bonus
   First group of regional development zones fixed in Annex No. 2:

• 15% of the approved investment cost with a ceiling of 1.5 million dinars.
• 65% of infrastructure works expenses in the industrial sector, limited to 10% of project cost with a ceiling of one (1) million dinars.
  Second group of regional development zones fixed in Annex No. 2:
• 30% of the approved investment cost with a ceiling of three (3) million dinars.
• 85% of infrastructure works expenses in the industrial sector, limited to 10% of project cost with a ceiling of one (1) million dinars.

Page 1102 Journal Officiel de la République Tunisienne — 28 mars 2017 N° 25
State participation in covering infrastructure expenses is granted to projects realized within designated zones and in accordance with approved development plans or urban planning documents, or projects possessing necessary authorizations from relevant authorities. These expenses do not include infrastructure costs related to normal activity and the prerogatives of national institutions operating in these fields. The list of activities excluded from benefiting from the regional development bonus is fixed in Annex No. 1 of this government decree.
3. Employability capacity development bonus regarding:
a. State coverage of the employer's contribution to the statutory social security scheme for salaries paid to Tunisian employees recruited permanently for the first time as follows:

• priority sectors: for the first three years from the effective start of activity,
• first group of regional development zones: for the first five years from the effective start of activity,
• second group of regional development zones: for the first ten years from the effective start of activity.
  b. State coverage of a portion of salaries paid to Tunisian employees based on management levels in all activities except those excluded from regional development incentives fixed in Annex No. 1 as follows:
• management rate between 10% and 15%: State coverage over a one-year period of 50% of the paid salary with a ceiling of two hundred fifty (250) dinars monthly for recruiting higher education graduates or holders of a superior technician certificate,
• management rate above 15%: State coverage over a three-year period of 50% of the paid salary with a ceiling of two hundred fifty (250) dinars monthly for recruiting higher education graduates or holders of a superior technician certificate,
  The aforementioned employability capacity development bonus is not cumulative with that provided by existing regulations benefiting private sector enterprises.

4. Sustainable development bonus regarding pollution control and environmental protection: 50% of the value of approved investment components with a ceiling of three hundred (300) thousand dinars.
   Investments benefiting from this bonus include:

• hydric and atmospheric pollution abatement projects caused by company activity,
• projects adopting clean and non-polluting technologies, enabling source pollution reduction or resource management,
• collective abatement equipment realized by public or private operators, on behalf of multiple companies performing the same activity or generating similar pollution.
  Art. 4 - The lists provided by this government decree are updated periodically upon proposal by the Tunisian Investment Authority and after approval by the High Council of Investment.
  Art. 5 - When benefiting from bonuses under the Investment Law and bonuses granted under other legislative texts, the total of these bonuses may not exceed one-third of the investment cost with a ceiling of five million dinars, excluding State participation in infrastructure expenses and the employability capacity development bonus. The same component may not cumulatively benefit from multiple bonuses. The cost of investment components benefiting from bonuses regarding economic performance and sustainable development is subtracted from the cost of direct investment operations realized for regional development, priority sectors, and economic value chains. An investor wishing to benefit from the bonuses provided by this government decree must inform, as applicable, the Tunisian Investment Authority or relevant investment structures of any request for incentives provided under other legislative texts.

N° 25 Journal Officiel de la République Tunisienne — 28 mars 2017 Page 1103 Structures responsible for granting incentives under the Investment Law or other legislative texts must also inform the Tunisian Investment Authority of incentive grant decisions within seven days from their signature date. Titre III Conditions and Procedures for Benefiting from Bonuses and Required Deadlines Art. 6 - The declaration of the direct investment operation and the legal constitution of enterprises is carried out according to the single declaration form model attached to this government decree. Art. 7 - Benefiting from the bonuses provided by Article 3 of this government decree is subject to the following conditions:

• submission of the investment declaration before commencing the direct investment operation,
• adoption of a project financing scheme comprising a minimum of 30% equity relative to the investment cost,
  This rate is reduced to 10% for Category "A" investments in agriculture, fisheries and aquaculture.
• maintaining regular accounting in accordance with the corporate accounting system, for both companies and natural persons exercising commercial or non-commercial activity as defined by current tax regulations,
• Realization of investments by employing new equipment or equipmen