Tax
Arm's length principle, annual transfer pricing return from TND 20 million of turnover, master file and local file from TND 200 million, country-by-country reporting, penalties: what a foreign group must organise for its Tunisian subsidiary.
22 August 2026 · 4 min read · By MGI BFC
Long marginal in Tunisia, transfer pricing has been a fully fledged tax obligation for financial years opened from 1 January 2020. Any Tunisian company belonging to a group, national or multinational, that transacts with related companies must be able to justify its intragroup prices. For a foreign-owned subsidiary, it is now the first topic of any tax audit.
It is the price at which a company invoices goods, services, royalties or financing to a related company of the same group. The tax stake: these prices must not shift profit artificially from one entity to another. The guiding rule, drawn from OECD work, is the arm's length principle: intragroup transactions must be priced as they would be between independent parties.
Two companies are related when there is dependence or control between them: direct or indirect majority shareholding, decision-making power, or de facto dependence. The link may be Tunisian or cross-border.
In line with the OECD standard: a master file on the group (structure, activities, intangibles, financing and overall transfer pricing policy) and a local file on the Tunisian entity (intragroup transactions, amounts, method retained and comparability analysis justifying arm's length pricing).
Five OECD-recognised methods: comparable uncontrolled price, resale price, cost plus, transactional net margin, profit split. The choice depends on the nature of the transaction and the availability of reliable comparables.
Failure to file the annual return: TND 10,000 fine. Incomplete or inaccurate documentation: TND 50 per missing or incorrect item, capped at TND 5,000. Beyond fines, the main exposure is the reintegration of profits deemed transferred, and the challenge of withholding taxes applied to intragroup payments.
Documentation cannot be improvised during an audit: comparability analysis, choice of method and data collection take time. Preparing it in advance secures compliance and gives a solid argument in case of audit. It is also a point of attention in any due diligence on the group. Management fees without substance are the first adjustment requested: agreement, evidence, allocation key.
MGI BFC supports foreign groups and Tunisian groups in their transfer pricing compliance: diagnosis, policy, return, documentation, defence. See transfer pricing in Tunisia and tax advisory.
Sources: Tunisian income tax code (transfer pricing provisions), Code of tax rights and procedures, OECD transfer pricing guidelines. Thresholds and penalties may evolve with finance laws. Article written by the MGI BFC teams; it is not personalised advice.