Distribution of Profits in Community Companies Is Governed by Specific Rules
“The allocation of profits realized by community companies is not completely free as it is in a typical commercial company, but it is governed by precise rules,” explained Mohamed Salah Ayari, tax advisor and university lecturer.
Profit Allocation Rules
In a televised interview with the TAP Agency, Ayari clarified that a community company does not have a purely profit‑driven purpose, unlike commercial entities governed by the Commercial Companies Code (e.g., limited‑liability companies – SARL – or sole proprietorships).
The creation of community companies primarily aims to:
- Promote local and regional development.
- Encourage the social and solidarity economy.
- Generate wealth for the community and its participants through participatory collective action and the valorisation of local resources.
Consequently, profits are first earmarked for collective and local development before any distribution to participants.
Re‑investment Priorities
A substantial portion of the profits must be reinvested in the company rather than paid out to members, ensuring project continuity and supporting local development. Ayari added that the priority is to build reserve funds that:
- Strengthen the company’s financial solidity.
- Finance reinvestment in projects or activities.
Only after these reserves are established does the distribution phase begin, following the modalities approved by the General Assembly.
Legal Framework (Decree‑Law No. 2025‑3)
According to Article 55 of Decree‑Law No. 2025‑3 of 2 October 2025 (amending Decree‑Law No. 2022‑15 of 20 March 2022 on community companies), profit distribution is as follows:
| Allocation | Percentage of Profits | Purpose |
|---|---|---|
| Mandatory reserves | 15 % | Accumulated until reserves reach 50 % of the company’s share capital. |
| Social, cultural & environmental activities | 20 % | Funding of community‑oriented programmes. |
| Distribution to participants | Up to 35 % | Decided by the General Assembly. |
| Company development | 30 % | Re‑investment (e.g., activity expansion, equipment acquisition) at local or regional level. |
Tax Advantages for Community Companies
Ayari highlighted the fiscal incentives granted under Articles 70 and 70‑bis of Decree‑Law No. 3 / 2025 (amending Decree‑Law No. 15 / 2022):
- Full tax exemption (corporate tax, personal income tax, and related taxes) for ten years from the company’s incorporation.
- The exemption applies both to the legal entity and to individuals who hold shares in the community company.
“This tax benefit is a strong incentive for investing in community companies, as it is not offered to conventional commercial firms,” Ayari noted.
VAT Suspension
- Article 70‑bis also suspends Value‑Added Tax (VAT) in line with Article 13 septies of the VAT Code, introduced by the 2025 Finance Law.
- Importation and local acquisition of equipment, materials, and raw materials needed for community‑company activities enjoy a 10‑year VAT suspension from the date of creation.
Ayari clarified that this suspension is not a permanent exemption but a preferential fiscal regime designed to lower start‑up investment costs. Similar mechanisms already exist in Tunisian tax law for other investment‑focused entities.
Mandatory Tax Reporting
Even with these incentives, community companies must comply with declarative tax obligations:
- They must file returns reporting income, profits, and operations, and disclose the amounts benefiting from tax advantages, as required by Article 85 of the Tax Rights and Procedures Code.
- Failure to file on time triggers a penalty of 1 % of the exempted income or profit.
Ayari emphasized that this reporting ensures fiscal transparency, prevents abuse of incentives, and allows tax authorities to verify the proper use of benefits.
Organizational Provisions
The Decree‑Law No. 2025‑3 of 2 October 2025 (amending Decree‑Law No. 2022‑15) was published in the Journal Officiel de la République Tunisienne on 3 October 2025. Key organizational rules include:
| Aspect | Local Community Companies | Regional Community Companies |
|---|---|---|
| Participants | Minimum 10 persons residing in the same delegation. | Minimum 15 persons from multiple delegations within the same governorate. |
| Minimum share capital | 5,000 TND | 10,000 TND |
| Acceptable contributions | Can receive donations and legacies under current legislation. | Same as local. |
| Governance | Board of Directors: 3–10 members (size depends on company scale), elected for 3 years, renewable twice. | Same structure. |
| National Register | A National Register of Community Companies (managed by the Ministry responsible for community companies) is hosted on an electronic platform, granting each entity legal personality and a unique identifier. | |
| Termination of participation | A participant’s membership ends if they no longer meet eligibility criteria or breach fundamental principles of the company’s activity and management. |
Bottom Line
Community companies in Tunisia operate under a strict profit‑allocation framework, prioritising reserves, social impact, and reinvestment before any profit distribution. They enjoy significant tax incentives (10‑year corporate‑tax and VAT exemptions) but must still fulfill mandatory reporting to maintain transparency. The 2025 decree also clarifies organizational structures, minimum capital, participant thresholds, and governance rules, reinforcing the sector’s role in fostering local and regional development and the social‑solidarity economy.
