WORLD TRADE  
ORGANIZATION  G/SCM/N/123/TUN 
19 September 2006 
 
 (06-4469) 
Committee on Subsidies and 
Countervailing Measures Original:   French 
 
 
 
SUBSIDIES 
 
New and Full Notification under Article XVI:1 of the GATT 1994  
and Article 25 of the SCM Agreement  
 
TUNISIA 
   The attached communication, dated 1 September 2006, is being circulated at the request of 
the delegation of Tunisia. 
 
_______________ 
 
 
TABLE OF CONTENTS
 
 
 
Page  
 
I. BENEFITS GRANTED FOR REGI ONAL DEVELOPMENT ...........................................3  
II. INCENTIVES FOR POLLUTION CONTROL AND ENVIRONMENTAL 
PROTECTION..................................................................................................................... .....4 
III. PROMOTION OF TECHNOLOGY, RESEARCH AND DEVELOPMENT 
AND ENERGY SAVING .........................................................................................................5  
IV. ENCOURAGEMENT OF NEW ENTREPRENEURS, LIGHT INDUSTRIES AND SMALL AND MEDIUM-SIZED ENTERPRISES ......................................................8
 
V. EXPORT PROMOTION .......................................................................................................11  
VI. OTHER ADVANTAGES GRANTE D UNDER LAW NO. 93-120 OF 
27 DECEMBER 1993 ENACTING THE CODE OF INVESTMENT INCENTIVES..................................................................................................................... .....12
 
VII. NATIONAL UPGRADING PROGRAMME.......................................................................13  
VIII.  INDUSTRIAL COMPETITIVENESS DEVELOPMENT FUND (FODEC)....................14  
IX. AMOUNTS OF THE INCENTIVES GRANTED ...............................................................15  
 G/SCM/N/123/TUN 
Page 2  
 
  PURPOSE OF THE NOTIFICATION 
 The following notification updates the latest notification by Tunisia and covers the three-year 
period 2001-2003, pursuant to Article 25.1 of the Agreement on Subsidies and Countervailing 
Measures and in the interests of transparency.  It  reviews the various tax and financial incentives for 
investment in Tunisia. 
 
OVERVIEW OF TUNISIA'S INVESTMENT PROMOTION POLICY 
 
 Since the 1970s, Tunisia has been implementi ng an active policy of encouraging investment 
to ensure the country's economic a nd social development, boost private initiative, attract foreign direct 
investment and create jobs for a growing labour force, consisting inter alia  of young graduates. 
  All these incentives are governed by the Single Code of Investment In centives, enacted by 
Law No. 93-120 of 27 December 1993.  
 Investment incentives in the different spher es of activity cover all investment operations 
(those involving creation, expansion, replacement, re habilitation and conversion).  The criteria for the 
granting of incentives are set horizontally and do no t favour any enterprises or activities over others.  
Applications for these incentives are examined by  different committees whose make-up guarantees 
the strict application of the rules in force, on th e basis of objective data (project studies, financing 
plans involving a minimum of equity assets, the level of which is set by decree, preliminary 
diagnoses, etc.).  G/SCM/N/123/TUN 
 Page 3 
 
 
  I. BENEFITS GRANTED FOR REGIONAL DEVELOPMENT 
1. Investment incentives to industrial activiti es taking place in regional development areas 
comprise tax rebates, capital grants, payment by the government of employer contributions to the statutory social security scheme and certain infrastructural expenses. 
2. This notification covers the period 2001-2003. 
3. These incentives come within the overall regiona l development programme aimed mainly at 
the central and southern regions of Tunisia, which are still at a disadvantage compared to the coastal 
areas where economic activity is heavily concentr ated.  They are designed to encourage the 
establishment of small and medium-sized ente rprises in these regions and reduce interregional 
disparities. 
4. The legal texts governing regional development incentives are as follows: 
- Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives; 
- Law No. 73-82 of 31 December 1973 estab lishing the Industrial Promotion and 
Decentralization Fund (FOPRODI); 
- Decree No. 99-483 of 1 March 1999 delimiting regional development areas; 
- Decree No. 94-539 of 10 March 1994 setting out the capital grants, lists of activities and 
infrastructural and community facility projects eligible for regional development incentives, 
as amended by Decrees No. 99-486 of 1 Marc h 1999 and No. 2002-1363 of 11 June 2002; 
- Decree No. 94-494 of 28 February 1994 setti ng out the procedures for payment by the 
government of employer contributions to the statutory social security scheme, as amended by Decree No. 95-1729 of 25 September 1995. 
 The areas for the promotion of regional de velopment were designated in Annex I and I bis of 
Decree No. 99-483 of 1 March 1999 on the basis of objective standards, principally the level of 
economic and social developmen t of the regions concerned. 
5. Incentives to investments made in regional development areas take the following form: 
(a) Deduction of all income or pr ofits ploughed back into equity or used to increase the 
initial capital of the enterprise from personal income tax or company tax subject to a 
minimum tax payment; 
(b) deduction of income or profits from these investments from personal income tax or 
company tax for the first ten years, and deduction of 50 per cent of such income or profits for the following the ten years; 
(c) full deduction of profits reinvested in the company from net profits subject to 
company tax; 
(d) waiver of contributions to the low-income housing development fund for the first five 
years of operation; 
(e) an investment grant of 15 or 25 per cent of the cost of the project, excluding working 
capital, but including the cost of studies, up to a ceiling of D 450,000 and D 750,000, 
respectively; G/SCM/N/123/TUN 
Page 4  
 
  (f) a grant by way of government participation in the infrastructural expenditure 
necessary to the implementation of the project.  This grant could cover half to three-quarters of expenditure on infrastructur e within or outside the enterprise. 
6. All investors in the manufacturing activities set out in Decree No. 94-492 of 
28 February 1994, establishing the lists of activities by sector covered by the Code of Investment 
Incentives, located in regional development areas are eligible for the benefits foreseen in the Code. 
 The tax advantages mentioned in paragraphs 5(a) , (b), (c) and (d) are accorded directly by the 
responsible departments of the Ministry of Fina nce upon presentation of an investment declaration 
certificate.  
 The capital grant and the grant by way of government participation in the cost of 
infrastructure necessary for the proj ect, described in paragraphs 5(f) and (g) above, are made available 
by the government through the I ndustrial Development and Decentralization Fund (FOPRODI), set up 
under Law No. 73-82 of 31 December 1973.  
 Any company wishing to benefit from these in centives must submit an application supported 
by a project feasibility study.   Applications are studied by a committee chai red by a representative of the Ministry of 
Industry and made up of representatives from the depa rtments concerned as well as a representative of 
the profession. 
 
 The amounts of the grants are based on the i nvestment project as approved by the Incentives 
Committee.  Grants are made by decision of the Mini ster for Industry.  The grants are disbursed in 
three instalments, as follows:  
- 40 per cent at project start-up; 
- 40 per cent upon completion of major infrastructure work; 
- 20 per cent when production begins. 
 The benefit of government payment of employer contributions to the statutory social security 
scheme is granted by decision of the Minister fo r Social Affairs on the proposal of the above-
mentioned committee. 
 
7. See Section IX. 
8. See paragraph 5. 
9. The incentives accorded for th e establishment of enterprises in the regional development 
areas do not lead to an expansion of exports by  the beneficiaries.  These incentives are given only 
once, at the time when the investment is made and not during the production phase. 
II. INCENTIVES FOR POLLUTION CONTROL AND ENVIRONMENTAL 
PROTECTION 
 Unchanged.  G/SCM/N/123/TUN 
 Page 5 
 
 
  III. PROMOTION OF TECHNOLOGY, RESEARCH AND DEVELOPMENT AND 
ENERGY SAVING 
A. RESEARCH AND DEVELOPMENT  
1. The incentives provided for investments made by companies in research and development 
comprise tax rebates for investors, exemption fro m certain duties and charges, capital grants and 
government payment of certain expenditure on in frastructure and social security costs if young 
graduates are employed. 
2. This notification covers the period 2001-2003. 
3. These incentives fall under the national policy to promote industrial research and 
technological advancement.  They are intended to encourage research and development within 
companies, the acquisition of technological know- how and technological development to enhance 
productivity and foster relations between enterprises and research centres. 
4. The legal texts governing incentives for r esearch and development are as follows: 
- Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives; 
- Decree No. 94-536 of 10 March 1994 establishing the amount and procedures for according 
capital grants for investment in research a nd development activities by enterprises in the 
industrial, agricultural and fisheries sectors; 
- Decree No. 94-494 of 28 February 1994 setting out the procedures for government payment 
of employer contributions to the statutory social security scheme; 
- Decree No. 94-1191 of 30 May 1994 establishing the conditions of eligibility for the tax 
benefits provided for in Articles 37, 41, 42 a nd 49 of the Code of Investment Incentives and 
granted for facilities for energy saving, research  into, production and ma rketing of renewable 
energy and research into geothermal energy , equipment for pollutio n control and waste 
collection, processing and treatment a nd research and development facilities; 
- Decree No. 98-868 of 20 April 1998 establishing the conditions and procedures for benefiting 
from government payment of employer contributions to the statutory social security scheme 
provided for in Article 43 bis of the Code of Investment Incentives. 
5. Investments made in research and developm ent in the industrial sector are entitled to: 
(a) Exemption from customs duties and waiver of VAT and the consumption tax on 
purchases of capital goods needed for the investment; 
(b) payment by the government of the following: 
1- 50 per cent of social security contributions over fi ve years, for foreign pe rsonnel brought in to 
optimize production capacities and for Tunisian nationals holding certificates of higher 
education; 
2- 100 per cent over five years of the employer's contribution for graduate recruitment; 
(c) a capital grant for research and developmen t activities representing 50 per cent of the 
cost, up to a limit of D 100,000, of the creation and technical testing of prototypes, 
field experiments and the acquisition of sci entific laboratory equipment needed for 
research and development projects, and 10 per cent of the cost, up to a limit of D 25,000, of original studies necessary for developing new products or processes. G/SCM/N/123/TUN 
Page 6  
 
   This grant is charged to the budget of the State Secretariat for Scientific Research and 
Technology. 
6. All investments in industrial activities aimed at promoting research and development and 
enterprise - research centre links are eligible for the benefits provided  under the Code in respect of 
research and development. 
 The tax advantages for the purchase of capita l goods needed for research and development 
projects are granted to enterprises by decision of th e Minister for Finance, based on an opinion by the 
committee attached to the Ministry of Finance.   The capital grant for research and development me ntioned in paragraph 5(c) is given by the 
State Secretariat for Scientific Research and Technology on the b asis of a performance contract 
setting out the investment and financing plan, a lis t of the equipment need ed, a timetable for the 
operations to be carried out, the amount of the grant as well as the procedures for its disbursement and 
the undertakings given by the beneficiary enterprise.  
 The incentive of government payment of contri butions to the statutor y social security scheme 
mentioned in paragraph 5(b) 1 is accorded by d ecision of the Minister for Social Affairs, on the 
proposal of a committee chaired by the representa tive of the Ministry of Social Affairs. 
  Government payment of contributions to the statutory scheme mentioned in paragraph 5(b) 2 
is accorded by decision of the governor having geog raphical jurisdiction, based on the opinion of an 
advisory panel attached to the regional vocational training and employment offices.  
7. See point IX. 
8. See paragraph 5. 
9. The incentives granted for investments in research and development do not lead to the 
expansion of exports by the beneficiary sectors. 
B. P
ROMOTION OF TECHNOLOGY AND TECHNOLOGICAL EXPERTISE  
1. Incentives for investments to acquire technology and technological expertise take the form of 
direct financial assistance paid from the Industria l Competitiveness Development Fund (FODEC) and 
payment by the government of human resource training costs. 
2. This notification covers the period 2001-2003. 
3. The objective of the aid is to help industrial companies to finance the acquisition of 
technology and technological know-how in orde r to increase their local content and boost 
productivity.  
4. The legal texts governing incentives for the ac quisition of technology and technological 
expertise are as follows: 
- Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives; 
-  Law No. 90-111 of 31 December 1990 containing the Finance Law for the 1991 budget year; 
-  Decree No. 94-540 of 10 March 1994 estab lishing the conditions and procedures for 
benefiting from government payment of human resource training costs in connection with investment in technology;  G/SCM/N/123/TUN 
 Page 7 
 
 
  -  Decree No. 99-2741 of 6 December 1999 est ablishing the organizational and operational 
regulations and working procedures of the FODEC. 
5. The incentives granted to investments made to acquire technology and technological expertise 
include: 
(a) Financial assistance paid from FODEC funds; 
(b) payment by the government of up to 50 per cent of the cost of human resource 
training in connection with technological investment, up to a ceiling of D 125,000. 
 Training expenses includes registration fees,  transport and accommodation costs and other 
training-related outlays.  They are paid from the budgeted funding of the Ministry for Vocational Training and Employment. 
6. All industrial enterprises may benefit from FO DEC assistance, which is granted by decision 
of the Minister of Industry, based on a study and report by an advisory committee. 
 As regards payment of human resource training costs, any enterprise wishing to benefit from 
this measure must submit to the National Ce ntre for Continuing Education and Vocational 
Advancement a training plan along the lines of a mode l drawn up by the responsible department in the 
Ministry for Vocational Training and Employment. 
 7. See Section IX. 
8. See paragraph 5. 
9. Incentives granted for investment s in the acquisition of technology and technological know-
how do not increase exports by the beneficiary sectors. 
C. E
NERGY SAVING  
1. Incentives accorded to enterp rises making energy-saving investments take the form of 
exemption from duties and taxes on capital goods  and financial assistance from the National 
Renewable Energy Agency (ANER). 
2. This notification covers the period 2001-2003. 
3. These incentives come under the national prog ramme for the management of energy 
consumption designed to prepare for the post-petr oleum phase when Tunisia will have an energy 
deficit.  They are meant to en courage companies to make energy  savings and conduct research into 
and develop renewable sources of energy as well as geothermal energy. 
4. The legal texts governing incentives for energy saving are as follows: 
-  Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives; 
-  Law No. 90-62 of 24 July 1990 on energy management; 
-  Decree No. 87-50 of 22 November 1987 in stituting compulsory energy audits; 
-  Decree No. 94-537 of 10 March 1994, setting th e amounts and criteria for the capital grants 
for investments in energy management; 
-  Decree No. 94-1191 of 30 May 1994 establishi ng the conditions of eligibility for the tax 
benefits provided for in Articles 37, 41, 42 a nd 49 of the Code of Investment Incentives and 
granted for facilities for energy saving, research  into, production and ma rketing of renewable G/SCM/N/123/TUN 
Page 8  
 
  energy and research into geothermal energy , equipment for pollutio n control and waste 
collection, processing and treatment a nd research and development facilities. 
5. Investment incentives in the field of energy  management take the following forms: 
(a) Exemption from customs duties and reduction to 10 per cent of VAT on purchases of 
capital goods needed for the investment; 
(b) a specific grant for energy management projects, including those relating to 
renewable and geothermal energy;  this grant covers: 
• 50 per cent of the cost of conducting energy  audits, up to a ceiling of D 20,000; 
• 50 per cent of the cost of demonstration projects, up to a ceiling of D 100,000; 
• 20 per cent of the cost of investments in rational energy use and renewable 
energies, up to a maximum of D 100,000. 
6. All industrial enterprises wishing to make ener gy-saving investments are eligible for the 
incentives mentioned in paragraph 5. 
 Tax advantages for the purchase of capital goods needed for research and development 
projects are accorded to enterprises by decision of the Minister for Finance, based on the opinion of 
the Technical Committee attached to the Ministry of Finance. 
  The specific grant is accorded by decision of the Minister fo r Industry, based on an opinion 
by the committee chaired by the managing direct or of the National Renewable Energy Agency 
(ANER). It is provided under a performance c ontract between the ANER and the enterprise 
concerned, setting out all the technical, economic a nd financial aspects of the investment project, as 
well as the amount of the aid granted, the el igibility conditions and the procedures for its 
disbursement. 
7. See point IX. 
8. See paragraph 5. 
9. The grants given for investments in energy- saving projects do not lead to an increase in 
exports from the sectors concerned. 
IV. ENCOURAGEMENT OF NEW ENTREPRENEURS, LIGHT INDUSTRIES AND 
SMALL AND MEDIUM-SIZED ENTERPRISES 
A. N
EW ENTREPRENEURS  
1. Incentives to new entrepreneurs comprise capita l grants, grants by way of government 
participation in the cost of studies, technical assi stance fees and expenses relating to the acquisition of 
serviced sites or premises necessary to the impl ementation of industrial projects, and equity 
participation. 
 Those considered as new entr epreneurs include natural pers ons of Tunisian nationality, 
whether or not grouped together in a company, und ertaking their first investment project, managing 
and taking responsibility for the project personally  on a full-time basis and having the requisite 
experience and qualifications, but in sufficient capital of their own.  G/SCM/N/123/TUN 
 Page 9 
 
 
  2. This notification covers the period 2001-2003. 
3. These incentives are designed to encourage the creation of micro, small and medium-sized 
enterprises, foster the spirit of private enterprise, combat unemployment and encourage the renewal of 
the production apparatus. 
4. The legal texts governing th ese incentives are as follows: 
-  Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives, as 
amended by Law No. 99-4 of 11 January 1999 amending and supplementing the Code of Investment Incentives; 
-  Decree No. 94-538 of 10 March 1994 granting investment incentives to new 
entrepreneurs, as amended by Decrees No s. 99-482 and 99-483 of 1 March 1999 
delimiting regional development areas; 
-  Law No. 73-82 of 31 December 1973 establishing the Industrial Promotion and 
Decentralization Fund (FOPRODI); 
-  Decree No. 94-494 of 28 February 1994 establishing the procedures for government 
payment of employer contributions to the statutory social security scheme. 
5. New entrepreneurs who make investments in industry not exceeding a total cost of 
D 3 million may receive the following benefits: 
(a) A capital grant of 10 per cent of the cost  of the equipment, up to a ceiling of 
D 100,000; 
(b) a government grant towards defraying the cost of the project study;  this grant is set at 
70 per cent of the cost of the project and may not exceed D 20,000; 
(c) a minimum equity participation granted to manufacturing and service sector projects 
on the following basis: 
• for the first part of the investment and up to D 1 million, total equity 
participation paid from FOPRODI funds shall not exceed 60 per cent of minimum equity;  the investor shall also provide evidence of a personal contribution equal to at least 10 per cent of the said capital and of participation 
of a venture capital investment company; 
• for the balance of the investment and up to D 4 million, total equity 
participation paid from FOPRODI funds sh all be limited to 30 per cent of the 
additional minimum equity;  the invest or shall also provide evidence of a 
personal contribution equal to at least 20 per cent of the said capital and of 
participation of a venture capital investment company; 
(d) payment by the government of a third of the price of the land or premises required for 
the project, up to a ceiling of D 30,000. 
 In all instances, the participation paid from  Industrial Promotion and Decentralization Fund 
funds corresponds to that of the venture capital investment company. 
6. The capital grants and loans mentioned in para graph 5 are made available by the Industrial 
Promotion and Decentralization Fund (FOPRODI) fo r industrial projects, following examination and 
study by the technical committee and on the basis of a project feasibility study. G/SCM/N/123/TUN 
Page 10  
 
   The incentive of government payment of employer contributions to the statutory social 
security scheme is accorded by decision of the Minister for Social Affairs on the proposal of a committee chaired by the representative of the Ministry of Industry. 
7. See Section IX. 
8. See paragraph 5. 
9. The grants accorded for inv estments by new entrepreneurs do no t lead to increased exports by 
the beneficiary sectors, as the incentives are given u pon establishment of the enterprise and not during 
the production phase. 
B. L
IGHT INDUSTRY AND CRAFTS AND TRADES  
1. Incentives to light industry and crafts and trades ta ke the form of an equity participation and a 
grant by way of government participation in the cost of studies and technical assistance. 
2. This notification covers the period 2001-2003. 
3. Incentives for investment in craf ts and trades and light industries come within the strategy 
launched over ten years ago to prom ote handicraft projects and encourage the trades, considering their 
impact on employment. 
4. The legal texts governing th ese incentives are as follows: 
- Law No. 81-76 of 9 August 1981 creating the National Fund for the Promotion of 
Crafts and Trades and Light Industries (FONAPRAM); 
- Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives, as 
amended by Law No. 99-4 of 11 January 1999 amending and supplementing the Code of Investment Incentives; 
- Decree No. 94-814 of 11 April 1994 defining small businesses, establishing their 
spheres of activity and the criteria and pro cedures for granting the benefits for which 
they are eligible, as amended by Decree No. 96-1444 of 12 August 1996. 
5. Light industries and crafts and trades engagi ng in the activities specified by decree are 
eligible for the following: 
(a) A capital loan not exceeding 90 per cent of equity assets corresponding to the part of 
the investment up to D 10,000 and 80 per cent of equity assets of the part of the investment between D 10,000 and D 50,000.  This sum is repayable free of interest 
over four years as of the eighth year; 
(b) a capital grant of 6 per cent of the total cost  of the investment;  the grant is increased 
to: 
- 21 per cent for projects located in non-priority regional development zones; 
- 25 per cent for projects located in priority regional development zones. 
 Any person wishing to invest in the crafts and tr ades or engage in any of the activities referred 
to in Decree No. 96-1444 of 12 August 1996 is entitl ed to the advantages listed in paragraph 5.  G/SCM/N/123/TUN 
 Page 11 
 
 
  6. The grants and equity participation mentione d in paragraph 1 are paid out of FONAPRAM 
funds, which are managed by banks. 
7. See Section IX. 
8. See paragraph 5. 
9. The grants given to small and medium-sized enterprises do not lead to increased exports by 
the beneficiary sectors. 
C. ENCOURAGEMENT OF SMALL AND MEDIUM -SIZED ENTERPRISES  
1. Incentives to small and medium-sized enterprises comprise equity participation and a grant by 
way of government participation in the cost of studies and technical assistance. 
2. This notification covers the period 2001-2003. 
3. The legal texts governing th ese incentives are as follows: 
- Law No. 93-120 of 27 December 1993 enacting th e Code of Investment Incentives, as 
amended by Law No. 99-4 of 11 January 1999 amending and supplementing the Code of Investment Incentives; 
- Law No. 73-82 of 31 December 1973 establishing the Industrial Promotion and 
Decentralization Fund (FOPRODI); 
- Decree No. 99-484 of 1 March 1999 granting incentives to small and medium-sized 
enterprises. 
4. Small and medium-sized enterprises are e ligible for the following assistance from the 
Industrial Promotion and Decentralization Fund: 
(a) Minimum equity participation in acco rdance with the following criteria: 
• For the first part of the investment and up to D 1 million, the participation paid 
from FOPRODI funds shall not exceed 30 per cent of the minimum equity; 
• for the balance and up to D 3 million, the participation paid from FOPRODI 
funds shall not exceed 10 per cent of the additional minimum equity; 
(b) a studies and technical assistance grant representing 70 per cent of the total cost, up to 
a ceiling of D 20,000. 
9.  The incentives granted within the framework  of the encouragement of small and medium-
sized enterprises do not affect the growth of exports  by the beneficiaries.  These incentives are given 
once only, at the time when the investment is made and not during the production phase. 
 
V. EXPORT PROMOTION 
1. Unchanged. 
2. This notification covers the period 2001-2003. G/SCM/N/123/TUN 
Page 12  
 
  3. Unchanged. 
4. Law No. 93-120 of 27 December 1993 enacting the Code of Investment Incentives, as 
amended or supplemented by s ubsequent texts and in particular by Law No. 2002-101 of 
17 December 2002 containing the Finance Law for the 2003 budget year. 
5. Total export regime:  Total export companies ma y apply for full tax deduction of income or 
profits derived from exports, for company or personal income tax purposes, for a period of 10 years as 
from the first export operation.  This deduction is re duced to 50 per cent as of the 11th year for an 
indefinite period. 
 Article 29 of Law No. 2002-101 of 17 Decem ber 2002 extends the time-limit for full 
deduction of income and profits de rived from exports.  Full deducti on of income and profits from 
exports continues to apply, under the tax legislation in force, to export companies for which the period 
of full deduction of income and profits from exports  expires before 2007, in respect of income and 
profits made up to 31 December 2007. 
 Partial export regime : 
(a) Unchanged. 
(b) Full tax deduction of income and profits from e xports for a period of 10 years.  After 
this period, the deduction is reduced to 50 per cent. 
 Article 29 of Law No. 2002-101 of 17 Decem ber 2002 extends the time-limit for full 
deduction of income and profits de rived from exports.  Full deducti on of income and profits from 
exports continues to apply, under the tax legislation in force, to export companies for which the period 
of full deduction of income and profits from exports  expires before 2007, in respect of income and 
profits made up to 31 December 2007. 
VI. OTHER ADVANTAGES GRANTED UNDER LAW NO. 93-120 OF 
27 DECEMBER 1993 ENACTING THE CODE  OF INVESTMENT INCENTIVES 
1. Tax and financial advantages may be accorded to  investments of particular importance or 
interest to the national economy or for the development of border areas. 
 Additional incentives and advantages may be granted for investments in the areas of 
education, higher education, including univers ity housing, vocational training and investments 
relating to preparatory years. 
2. This notification covers the period 2001-2003. 
3. Unchanged. 
4. These incentives are provided for in Law No. 93-120 of 27 December 1993 enacting the Code 
of Investment Incentives, as amended by Law No. 99-101 of 31 December 1999 containing the 
Finance Law for the year 2000 and by Law No. 2001-82 of 24 July 2001. 
5. The advantages are accorded by decree, based on the opinion of the High-Level Investment 
Committee, in the form of: 
(c) A capital grant not exceeding 5 per cent of th e amount invested;  the grant may be as 
high as 20 per cent for projects involving promising activities;  G/SCM/N/123/TUN 
 Page 13 
 
 
  (d) a waiver of taxes and duties on the purchase of capital goods needed for the purposes 
of investment. 
 For investments in the areas of education, hi gher education, including  university housing, 
vocational training and investments relating to prepar atory years, the advantages are accorded in the 
form of: 
• A capital grant not exceeding 25 per cent of the cost of the project; 
• payment by the government of part of the salaries paid to Tunisian teaching or 
training personnel recruited on a permanent basis, up to a limit of 25 per cent and for a period not exceeding ten years;  
• government payment of the employer contri bution to the statutory social security 
scheme in respect of salaries paid to Tunisian teaching or training personnel recruited on a permanent basis, up to a limit of 25 per cent and for a period not exceeding 
ten years; 
• government payment of the employer contri bution to the statutory social security 
scheme in respect of salaries paid to Tunisian teaching or training personnel recruited on a permanent basis for a period of five years, which may be extended once only for an equal length of time; 
• provision of land for investors under concession agreements in accordance with the 
legislation in force.  
VII. NATIONAL UPGRADING PROGRAMME 
1. The national upgrading programme initiated in 1996 provides financial assistance to industrial 
companies carrying out restructuring.   Such restructuring includes: 
(a) Physical investments, in particular inve stments in the technical and technological 
modernization of the production process, conve rsion in order to adapt to markets and 
improvement of company competitiveness; 
(b) intangible investments, in particular th ose covering diagnostic studies prior to the 
upgrading and those fostering greater company competitiveness. 
2. This notification covers the period 2001-2003. 
3. The opening up of the economy and the establishmen t of a free-trade area with the European 
Union calls for upgrading of the industrial sector by setting up a programme and structures for 
modernizing the economy and strengthening the capaciti es of firms to adapt to the demands of the 
international market. 
 Upgrading entails a package of actions within the company and its environment.  It therefore 
affects aspects such as technology, organization, financial balance, vocational training, etc. 
 
 With regard to the company's environment, upgrading affects basic infrastructure, support 
structures and the range of production and service entities related to the industry. 
 G/SCM/N/123/TUN 
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   Initial cost estimates for the first phase of  this programme (1996-2000) stand at around 
D 2.5 billion, 60 per cent of which is allocated for upgrading and modernizing enterprises and 40 per 
cent for upgrading and reinforcing their infrastructural environment.   The programme is financed by both the enterp rises and the financial sector.  Government 
assistance complements market mechanisms and is  designed to foster and support efforts by 
enterprises, in view of the cost of the operation.  4. Government assistance is fina nced from the Industrial Competitiveness Development Fund 
(FODEC), established by Law No. 94-127 of 27 D ecember 1994.  The organization, working and 
operating procedures of FODEC are laid down in Decree No. 99-2741 of 6 December 1999 
establishing the rules governing the organization, working and operating procedures of the Fund. 
5. Government assistance takes the form  of capital grants set as follows: 
* Physical investments
: 
- 20 per cent of physical investments financed from equity assets; 
- 10 per cent of investments financed with other resources; 
- 50 per cent of the cost of priority equipm ent purchased in the context of upgrading, 
up to a ceiling of D 100,000; 
* Intangible investments : 
- 70 per cent of the cost of diagnostic studies preliminary to upgrading, up to a ceiling 
of D 30,000; 
- 70 per cent of the cost of any other non- tangible investment designed to improve the 
company's competitiveness. 
6. The upgrading programme covers private-sector industrial enterprises and industry-related 
service companies, regardless of size, category or location. 
 Government assistance is granted by decision of the Minister for Industry, based on an 
opinion by the steering committee of the upgrading programme.  To that end, an agreement is 
concluded between the Ministry of Industry and the enterprise, setting out the rights and duties of 
each of the parties.  7. See Section IX. 
8. See paragraph 5. 
9. The upgrading programme has no direct impact on exports by the beneficiary enterprises. 
VIII.  INDUSTRIAL COMPETITIVENESS DEVELOPMENT FUND (FODEC) 
1. The Industrial Competitiveness Development Fund provides funding for programmes for 
improving the quality of industrial products, industrial restructuring processes and strategic sectoral 
studies. 
2. This notification covers the period 2001-2003. 
3. FODEC assistance takes the form of funding.  G/SCM/N/123/TUN 
 Page 15 
 
 
  4. FODEC was created by Law No. 94-127 of 26 December 1994 containing the Finance Law 
for the 1995 budget year, and its operations were established by Decree No. 99-2741 of 
6 December 1999. 
5. FODEC funding takes the following forms: 
(a) Financial assistance of up to 50 per cent of the cost of priority equipment, up to a 
ceiling of D 100,000 for each enterprise; 
(b) financial assistance of up to 70 per cent of th e cost of isolated, intangible and priority 
investments, up to a ceiling of D 70,000 for each enterprise; 
(c) financial assistance of up to 70 per cent of the cost of diagnostic studies prior to the 
restructuring of enterprises in financial difficulties, up to a ceiling of D 30,000. 
 Such assistance is accord ed by decision of the Minister for Industry. 
 6. FODEC assistance is intended for private-sect or industrial enterprises and industry-related 
service companies. 
7. See Section IX. 
8. See paragraph 5. 
9. FODEC has no direct impact on exports by the beneficiary enterprises. 
IX. AMOUNTS OF THE INCENTIVES GRANTED 
 The following is a breakdown of the amounts of  the incentives accorded to enterprises for the 
period 2001-2003: 
1. Tax incentives for all categories of investment: 
-  Company tax:  
 . 2001:  D 298.722 million;  . 2002:  D 392.709 million;  . 2003:  D 340.602 million. 
-  Personal income tax: 
 . 2001:  D 12.674 million; 
 . 2002:  D 13.000 million;  . 2003:  D 13.000 million. 
-  Waiver of duties and taxes on capital goods purchases:  
 . 2001:  D 6.489 million;  . 2002:  D 8.567 million; 
 . 2003:  D 9.868 million. 
2. Financial incentives for all categories of investment: 
(a) Industrial capital grants: 
-  Agriculture: G/SCM/N/123/TUN 
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   . 2001:  D 68.900 million; 
 . 2002:  D 73.800 million;  . 2003:  D 62.300 million. 
-  Pollution control: 
 . 2001:  D 2.18 million; 
 . 2002:  D 1.77 million; 
 . 2003:  D 0.84 million. 
-  Industrial Competitiveness Development Fund (FODEC): 
 . 2001:  D 29.3 million;  . 2002:  D 43.8 million; 
 . 2003:  D 43.5 million. 
(b) Contribution to cost of basic infrastructure: 
 . 2001:  D 2.29 million; 
 . 2002:  D 2.04 million;  . 2003:  D 1.95 million. 
(c) Government payment of the employer contri bution to the statutory social security 
scheme: 
 . 2001:  D 17.90 million; 
 . 2002:  D 21 million;  . 2003:  D 22.21 million. 
(d) Export promotion (FOPRODEX): 
 . 2001:  D 15.84 million; 
 . 2002:  D 14.27 million;  . 2003:  D 14.13 million. 
 
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