The Presidential Decree No. 30 of May 10, 2020, issued by the Tunisian government, raised the withholding tax rate on interest earned from deposits with financial institutions from 20% to 35%.

This decision took immediate effect as of June 10, 2020, and applies to interest not yet paid by banks or financial institutions.

The withholding tax rate in Tunisia has thus been increased to the maximum rate of income tax or corporate tax applicable under general law. In fact, this withholding tax has now surpassed the rate of final income tax.

The 35% withholding tax applies to the following types of deposits :

• Term deposits ranging from 3 months to 5 years
• Cash bonds with maturities between 3 months and 5 years
• Certificates of deposit ranging from 10 days to 5 years
• All similar deposit interests

It should be noted that this withholding tax applies only to interest rates exceeding TMM-1 point.

Interest rates below TMM-1 remain subject to a 20% withholding tax.

With this increase in the interest rate, the government aims to direct capital toward investment and the creation of wealth and employment, rather than keeping it in savings or locked in banks.

As a result, financial investments should be converted into physical investments in Tunis and major cities (Sfax, Sousse, Bizerte, Mahdia, Monastir, Ksar Helal, Nabeul, Hammamet, etc.), as well as in regional development zones that benefit from various fiscal and financial incentives to encourage investment.