Tunisian Inheritance Tax
Giambrone’s Inheritance Tax lawyers looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Tunisia: what restrictions there are and whether making a will is advisable.
Inheritance tax is levied on the transfer of Tunisian real estate property through inheritance. The tax is levied at varying rates; depending on the relationship of the heir to the deceased.
What inheritance laws apply in Tunisia?
The principal laws which apply to inheritance issues of foreigners are:
Decree of 13 Aug.1956, promulgating the "code du statut personnel ". (Inheritance law).
Law n° 98-97 of 27 Nov.1998, promulgating the "code de droit international privé" (Tunisian international private law) which states that inheritance is governed by the law of the deceased´s nationality.
Decree of 4 June 1957, requiring the administration to authorize the ownership of property in Tunisia by a foreigner; completed by law 2005-40 of 11 May 2005: if a foreigner invests in a manufacturing or services company in Tunisia, which is governed by the investment incentives code (Law n°93-120 of 27 Dec.1993) then he/she is exempted from administrative authorization.
Law n°5-1964 of 12 May 1964, prohibiting a foreigner to own or purchase agricultural land.
Exchange and commercial relationships between Tunisia and foreigners are governed by:
Law n° 76-18 of 21 Jan.1976, promulgating the "code des changes et du commerce extérieur´´ (modified by the law n°93-48 of 3 May 1993).
Decree n°77-608 of 27 July 1977, and related law 76-18 (modified between 1987-2006) requiring the Tunisian Central Bank to authorize the acquistion of property by a foreigner, with an express exemption for inheritance.
The applicable law for inheritance is that of the deceased´s nationality.
If the foreigners´ national law states that, for inheritance issues, the relevant law is that of the country where the inherited property is located, then Tunisian Law applies.
A non-Muslim may probably not inherit from a Muslim
As a general principle, Tunisian laws, when applicable, apply to all Tunisian citizens, irrespective of religion. Article 174 of "code du statut personnel" expressly states that a legacy is valid irrespective of the religions of the testator and beneficiaries. Article 175 states that a legacy which benefits a foreigner is valid under the condition of reciprocity. However, the Court of Sousse decided in 1968 that a non-Muslim may not inherit from a Muslim. This decision was the ruling judicial precedent until Jan. 2007, when the First Degree Court of Tunis decided the contrary, i.e. that Tunisian law does not provide for religious discrimination. This decision has been appealed, but it may take a few years to reach final decision.
Foreigners who cannot legally own Tunisian property may be compensated by the State
A foreigner may own property in Tunisia; however he/she needs administrative authorization to buy or sell property in a non agricultural zone. Such authorization is rarely refused. An agricultural estate or residence located in a non-agricultural zone may not be owned by a foreigner.
If an inheritor cannot, by law, own property in Tunisia (for example, perhaps he/she belongs to a nationality for which Tunisia does not have reciprocal property-owning arrangements) then no special Tunisian law is applicable. When a foreigner cannot be an inheritor, he/she does not have the rights of a proprietor, and cannot even sell the property. The solution would be compensation from the Tunisian State, which becomes the proprietor instead of the foreigner.
A reserved portion applies in Tunisian law
When inheritance follows Tunisian law, the reserved portion is expressed in terms of proportions (or ratios) of the total inheritance to which certain family members are entitled. This proportion varies according to the number of inheritors of the same degree, and also depends on whether there are inheritors of different degrees. In this case one inheritor may lose his rights. The inheritors who ´displace´ those who would otherwise receive an inheritance are indicated in the right hand column, below
If the sum total of the inheritors´ entitlements adds up to more than 1, then the inheritance is shared between inheritors in proportion to their respective ratios.
A will is sometimes made in Tunisia, but this is unusual.
A will made abroad following foreign formalities is valid in Tunisia. The will must be written and signed by the testator in the presence of a civil officer (i.e. notary or municipality) to certify its authenticity. The signature of the civil officer must be certified by the ministry of justice of the state, the foreign affairs ministry, and the Tunisian Embassy of the country where the will is made. However, after death, a will made abroad may lead to conflicts between the beneficiaries and third parties concerning the applicable inheritance laws for the execution of the will.
To avoid conflicts, it may be advisable to make a will in Tunisia. The will requires the presence of the testator in Tunisia, and it must be signed near two notaries or other civil officers who can certify the signature of the testator.
According to Tunisian law a will may not apply to more than 1/3 of the total inheritance, and may not benefit the legal inheritors of the reserved portion or residue. A will which applies to more than 1/3 of the heritage may, however, be executed with the consent of all the legal inheritors.
In the absence of a will, Tunisian law, if applicable to a foreigner, provides for a mandatory legacy. The deceased´s grandparent is legally reputed to have made a legacy for the benefit of his/her grand children when their father/mother (son or daughter of the deceased) died prior to or at the same time as the grandparent. The ratio to the father/mother of the beneficiary children, is up to 1/3 of the heritage. The mandatory legacy is not applicable if the children are legally entitled to inherit from the grandparent, or if they already have an effective legacy from the deceased, or if they have received a gift for the same value (1/3) during his/her lifetime. Otherwise the mandatory legacy is applicable for the difference. If the children have already received more than 1/3 of the legacy, the difference will be considered as a consensual legacy.
Property can be given freely by the owner to anyone, prior to death.
According to Tunisian law, there are no legal restrictions on gifts to third parties during the lifetime of the owner; however the circumstances may be challenged by the legal inheritors, who are entitled to claim that the gift was unfair to them, and was designed to thwart the legal inheritance rules. They may introduce an action to cancel the gift, but to be succesful, they must prove that the gift was made maliciously. There are no advance procedures or steps to avoid such a challenge.
Tunisian law looks at the title deeds to determine ownership of property
All property in Tunisia must be registered at the cadastral administration under the name of the owner. To determine ownership of real property, the Civil Court looks at the title deeds. A spouse may produce documents proving that, according to applicable marriage law, he/she is the co-owner of the property in question, and he/she may request the court to order transcription of the co-property in the title deeds. If other inheritors have already sold their portion of the property to third parties, the claimant cannot oppose the third parties, who have an absolute right not to be affected by what was not registered in the title deeds.
Property may be inherited by minors.
If property, or part of it, goes on death to a child or children not of legal age, or to others not legally adult, then a guardian can be appointed in the Will. In the absence of a guardian in the Will, the guardian may be the legal tutor if he/she exists; otherwise the court may appoint a guardian.
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