Retirement in the sun in Tunisia
Chatt Meriem

Retirement in the sun in Tunisia

great tax advantages for those who move to Tunisia

For British/European pensioners who move to Tunisia, the law grants important tax advantages, which lead to an increase in the net pension received.

An opportunity to be taken seriously, also because the increase in net pension is accompanied by a much lower cost of living, so the pensioner who moves to Tunisia will see his income increase substantially.

The Tunisian law n. 2006-85 of December 25, 2006 established, starting from 2007, a regime to reduce the 80% tax on pensions received by citizens of various countries, including U.K, with which Tunisia has a tax convention of so-called "non-double taxation". In short, the mechanism is as follows: the retired British citizen must apply for a residence permit, effectively living in Tunisia most of the year (so for at least 6 months + 1 day a year). It must also have a bank account, on which the pension received by the UK will be credited. Given these conditions, the pension will be paid by the British body gross, then without withholding taxes, because, by virtue of the tax convention, it will be taxed no longer by the British State but by the Tunisian one. On this gross, the Tunisian State grants a deduction of 80%, thus taxing only the remaining 20%.

Let's take a practical example, based on a gross pension of 1,000 euros per month:

Monthly Gross revenue: 1,000 euros
80% deduction: 800 euros
Taxable income: 200 euros
Tax to be paid: 75 euros
On a gross of 1,000 euros, then, the pension received becomes 925 euros, as 800 were originally taxed by the Tunisian State, while the remaining 200 euros, constituting the taxable, became 125 after taxation.

It is clear that the higher the pension the more the benefits become interesting, but it is also true that for a small pension the differential taxation becomes even more valuable, especially considering that the cost of living in Tunisia is equal to about half compared to UK.

As mentioned, in order to obtain and keep the residence permit in Tunisia, you must stay there for a minimum of 6 months + 1 day per year, even if not continuous.

For more information do not hesitate to contact us.

On behalf of our clients we also deal with the procedures relating to residence permits and pension transfers, making available to British who wish to do this