by SuperadminDavos 2020
For the fifth time Dr Samir Abdelly is guest of honor at the world economic forum of Davos by various international think tanks as international expert speaker
by SuperadminMonthly Newsletter The Draft Finance Law for the year 2020
Abdelly & Chaary and Partners are delighted to make available to their dear Clients and Partners, for any useful purpose, a summary of the main provisions of the Draft Finance Act for the year 2020, wishing you good reading.
This Newsletter has been prepared solely for information purpose.
Our Firm remains at your service for any further clarification.
The main Provisions of the Draft Finance Act
1/ Creation of a new tax audit called “Punctual audit” which concerns the fiscal situation of a taxpayer or a part of this situation for a period less than one year. Such verification benefits from simplified procedures and shortened deadlines to expand the number of Taxpayers involved in the tax audits.
2/ Possibility for Tax Department to base, during a preliminary Tax audit, on the on-site visits ,inspections, material findings and this or the control and the verification of the advantages, deductions, and privileged regimes in fiscal matter with authorization of the controllers to obtain copies of the documents necessary for the tax audit.
3/ Increase of the amount paid for the suspension of the execution of the tax decrees of arbitray assessment due to a failure to file tax returns to 20% of the tax due (instead of 10%) or the payment of a bank guarantee 15% that are applicable in case of disagreement between the administration and the taxpayer .
4/ Possibility of registration of contracts and other documents and payment of tax stamps by reliable electronic means. The modalities will be fixed by Ministrial Order.
5/ Determination of the oil services provided to the companies operating under the hydrocarbons legislation and which are concerned by the CIT rate of 35% by submitting the part of the profits from the services provided for in article 130.1 of the hydrocarbons code to the CIT at the rate of 35%.
6/ Relaxation of the conditions of the flat rate regime in the category “industrial and commercial benefits” for individual persons established within the country (outside municipal areas).
7/ The granting of tax benefits and suspensive regimes to companies and individuals with custom debts for more than two years is subject to the regularization of such debts or the signing of a payment schedule.
8/ VAT suspension of certain products for the encouragement of the fishing industry (woven polyester, nylon and polyamide yarns for the manufacture and repair of fishing nets and metallic yarns for the manufacture of metal ropes for fishing).
9/ Extension until December 31st , 2024 of the period of reduction of the rate of CIT to 20% for 5 years for companies making IPO with a public offering of at least 30% , the same measure applies to companies subject to corporate tax at a rate of 25% and which are listed on the stock market from 01/01/2017 and which benefit from a reduction of the corporate tax rate to 15 %.
10/ Increase in family deductions for dependent parents from 150 TND to 450 TND per year for each dependent parent.
11/ Clarification of the terms and conditions for the submissions of certain activities that do not meet the condition of substantial activity at the tax rate of 13,5% under certain conditions (to be fixed by Decree) . This measure mainly concerns :
– innovative services in information technology, software development and data processing
– International trading companies
– Logistics services provided in a grouped way
12/ Tax measures supporting the Tunisian Association of Children’s Villages.
13/ Determination of the tax regime for Islamic insurance and mainly the extension of the scope of corporate income tax (CIT ) to cover Islamic insurance companies at a rate of 35% .
14/ Generalization of the reduction of withholding tax from 15% to 5% for remuneration paid to film artists and owners of copyright.
15/ Registration of secret public contacts on the basis of a specific declaration according to the sample prepared by the Tax Administration.
16/ Late payment penalties for customs debts are aligned with the penalties applied to tax debts, which are set at 0.75% per month or fraction of a month’s delay.
17/ Application of a contribution of 10 TND on each judgment, judicial decision , addition of payment, and authorization on request, from all the courts for the benefit of the justice support fund which will be created for the improvement of the court infrastructure and working conditions.
18/ Possibility of exchange of tax notifications and letters between the Tax Authorities and Taxpayers by reliable electronic means. ./.
by SuperadminDossier Télécom : Les opérateurs contre-attaquent
Sur le continent, la criminalité numérique n’épargne ni les entreprises ni les particuliers. Les géants de la téléphonie mobile et de l’internet l’ont bien compris, qui ont fait de la protection des données une activité à part entière.
by SuperadminJeune Afrique : Avis d’experts Défis actuels de la politique énergétique tunisienne
Sur la base de notre étude de la réglementation régissant …
by SuperadminClassement : Les 50 avocats d’affaires les plus influents en Afrique
Maître Samir Abdelly parmi Les 50 avocats d’affaires les plus influents en Afrique
by SuperadminDR. SAMIR ABDELLY
Martindale-Hubbell has been the world’s leading source of information for the legal profession for more than 140 years. Its flagship products Lawyers.com and martindale.com®, are the most complete sources of information on lawyers available anywhere.
by SuperadminCompany Overview of Abdelly & Associates
Dr. Samir Abdelly is the Founder and Managing Partner of Abdelly & Associates since 1994. He is currently Lawyer at the Supreme Court of Tunis.
by SuperadminMergers and Acquisitions Report: Tunisia
Samir Abdelly of Abdelly & Chaary and Partner assesses the M&A regulatory framework in Tunisia
Section 1: GENERAL OUTLOOK
1.1 What have been the key recent M&A trends or developments in your jurisdiction?There are no key recent M&A developments in our jurisdiction.1.2 What is your outlook for public M&A in your jurisdiction over the next 12 months?
Section 2: REGULATORY FRAMEWORK
2.1 What legislation and regulatory bodies govern public M&A activity in your jurisdiction?The following legislation principally governs public M&A activity: the Tunisian Commercial Companies Code; law no. 91-64 of July 29 1991, addressing competition and prices, as subsequently amended; law no. 94-117 of November 14 1994, adressing reorganisation of the financial market, as subsequently amended; and the General Regulation of the Stock Market of Tunis, as subsequently amended.The primary regulatory bodies are: the Financial Market Council (Conseil du Marché Financier); the Tunisian Competition Council (Conseil de la Concurrence); and the Ministry of Commerce.2.2 How, by whom, and by what measures, are takeover regulations (or equivalent) enforced?The Financial Market Council supervises takeover bids.The Tunisian Stock Exchange Market (Bourse des Valeures Mobilières de Tunis) monitors trading on all regulated markets.
Section 3: STRUCTURAL CONSIDERATIONS
3.1 What are the basic structures for friendly and hostile acquisitions?
Hostile acquisitions of a Tunisian public target are generally structured as a tender offer by the bidder to all or part of the target’s shares at the same price in cash and/or shares. A friendly acquisition is often preceded by the purchase of one or several blocks of shares. When the acquisition is paid in shares, it may be structured as a merger, subject to the approval of a two-thirds majority of an extraordinary general meeting of the two companies.
3.2 What determines the choice of structure, including in the case of a cross-border deal?
The acquisition is often preceded by an acquisition of share blocks in the framework of an acquisition on a cash deal basis. In a share deal, the acquirer may structure its acquisition as a merger operation. The acquisition is preceded by a takeover bid to squeeze out minority shareholders, after which the company can execute the merger.
In a cross-border deal, the target company’s activity must be considered. Certain sectors restrict foreign ownership and require prior authorisation of the Ministry of Trade and/or the Central Bank of Tunisia.
3.3 How quickly can a bidder complete an acquisition? How long is the deal open to competing bids?
An acquisition can take two to three months to complete. A higher offer or a competing offer may be filed with the Financial Market Council up to five trading days before the closing of the previous offer. The timeline can be extended when regulatory approval or antitrust proceedings are required.
3.4 Are there restrictions on the price offered or its form (cash or shares)?
A public offer can be made in cash, shares or a combination of the two. The Financial Council Market may need to review the price offered, depending on objective assessment criteria or the characteristics of the target’s company.
3.5 What level of acceptance/ownership and other conditions determine whether the acquisition proceeds and can satisfactorily squeeze out or otherwise eliminate minority shareholders?Minority shareholders have the right to withdraw from the capital of the target company through a public repurchase offer or mandatory public tender offer.
3.6 Do minority shareholders enjoy protections against the payment of control premiums, other preferential pricing for selected shareholders, and partial acquisitions, for example by mandatory offer requirements, ownership disclosure obligations and a best price/all holders rule?
The general principle is that the bidder must treat all shareholders of the same class of a target’s company the same. Minority shareholders do not enjoy specific protections against the payment of control premiums, or other preferential pricing for selected shareholders.
However, any person who, alone or in concert exceeds (even unintentionally) the 40% threshold of the shares or voting rights in the target must file an offer for 100% of the target’s share capital and equity-linked securities.
Any person who, alone or in concert exceeds (even unintentionally) the 95% threshold of the shares or voting rights in the target must file a public repurchase offer.
3.7 To what extent can buyers make conditional offers, for example subject to financing, absence of material adverse changes or truth of representations? Are bank guarantees or certain funding of the purchase price required?
Except for certain limited conditions for voluntary offers, public offers cannot be conditional and are irrevocable upon filing. The banks filing the offer on the bidder’s behalf guarantee payment.
Section 4: TAX CONSIDERATIONS
4.1 What are the basic tax considerations and trade-offs?
The basic tax is for stamp duty and registration at the charge of the purchaser. Value added tax is also applicable.
4.2 Are there special considerations in cross-border deals?
For cross-border deals, tax treaties with the Tunisian Republic will be applied.
Section 5: ANTI-TAKEOVER DEFENCES
5.1 What are the most important forms of anti-takeover defences and are there any restrictions on their use?
The most common anti-takeover defences that a company can use to resist a hostile takeover bid is to separate the power of the company from its share capital.
This means that the power of the company could be focused at the level of the reference shareholders, whereas the other shares are deprived of their voting rights. The company can also make a statutory ceiling for participations.
5.2 How do targets use anti-takeover defences?
The target can use anti-takeover defences to invalidate a transaction. However, in most cases the target will use such defences to obtain a higher price or postpone the acquisition until competing bidders are involved.
5.3 Is a target required to provide due diligence information to a potential bidder?
The target company may (but is not required to) allow a due diligence review. The existence of the due diligence review, as well as any privileged information disclosed though the due diligence process, must be disclosed in the offer prospectus.
5.4 How do bidders overcome anti-takeover defences?
Bidders can overcome anti-takeover defences by offering a higher price.
5.5 Are there many examples of successful hostile acquisitions?
Section 6: DEAL PROTECTIONS
6.1 What are the main ways for a friendly bidder and target to protect a friendly deal from a hostile interloper?
It is difficult to prevent an interloper from filing a competing offer because any competing offer must be approved by the Financial Council Market.
However, in practice, the acquirer may use break fees and undertakings from the target not to actively seek counter bidders.
6.2 To what extent are deal protections prevented, for example by restrictions on impediments to competing bidders, break fees or lock-up agreements?
As indicated in section 6.1, any competitor has the right to make a public offer as long as the offer remains open. Break fees are not provided for under Tunisian laws and as such, are not prohibited.
However, general principles regarding the liability of the directors to act in the target’s interests make break fees rare in practice.
Section 7: ANTITRUST/REGULATORY REVIEW
7.1 What are the antitrust notification thresholds in your jurisdiction?
In accordance with article 7 of the Competition Law, antitrust review will apply only if:
the concerned companies have together achieved at least 30% of the sales, purchases or other transactions during the three fiscal years over a national market of substitutable goods, products or services or over a substantial part of such market;
the global turnover achieved in the local market reaches at least TND 20 million (approximately $10 million).
7.2 When will transactions falling below those thresholds be investigated?
7.3 Is an antitrust notification filing mandatory or voluntary?
Antitrust notification filing is mandatory if the transactions meet the conditions indicated in section 7.1.
7.4 What are the deadlines for filing, and what are the penalties for not filing?
Any project of concentration or concentration operation shall be subject to the prior authorisation of the Ministry of Commerce by the concerned parties. This must be filed no later than 15 days from the date of conclusion of the concentration act, merger, and publication of the purchase offer of exchange of rights or obligation or acquisition of control participation.
Without prejudice to the sanctions stated by courts, the Competition Council may order the concerned operators in breach of these requirements to pay a fine of no more than five percent of their pre-tax turnover as achieved in Tunisia during the last financial year.
7.5 How long are the antitrust review periods?
No response from the Ministry of Commerce for three months from the date of a transaction’s referral can be taken as the Ministry’s tacit acceptance of the deal.
7.6 At what level does your antitrust authority have jurisdiction to review and impose penalties for failure to notify deals that do not have local competition effect?
The Ministry of Trade and/or the Competition Council do not have jurisdiction to review or impose penalties for failure to notify deals that do not have local competition effect.
7.7 What other regulatory or related obstacles do bidders face, including national security or protected industry review, foreign ownership restrictions, employment regulation and other governmental regulation?
Bidders established in Tunisia must comply with all Tunisian laws and regulations.
In connection with the labour law, the change in control of a company (being an employer) does not have any effect on the employment contracts made between the parties.
Foreign ownership restrictions apply in certain sectors (such as commercial, financial and real estate). These require majority ownership (at least 51%) by Tunisian investors.
Section 8: ANTI-CORRUPTION REGIMES
8.1 What is the applicable anti-corruption legislation in your jurisdiction?
The relevant legislation includes: the Tunisian Penal Code; the Framework Decree (Décret-Cadre) of November 14 2011 pertaining to the fight against embezzlement; and Decree of February 18 2011, creating the National Commission on Investigation into Corruption and Embezzlement.
Article 91 of the Penal Code provides that:
a breach will occur where any person has bribed or attempted to bribe by donations or promises of donations, or presents or advantages of any kind to a public officer (and any person to be treated as a public officer within the meaning of the Penal Code) to perform any act related to his function, even a rightful act related to the function of the public officer, but not subject to a consideration, or to facilitate the achievement of an act related to his function, or to refrain from doing any act that it is his duty to do.
There is no offence for bribing either a private person or company under the Tunisian Penal Code.
The Framework Decree introduced criminal sanctions for corruption within the private sector. However, the laws criminalising corruption in the private sector have not been enacted.
8.2 What are the potential sanctions and how stringently have they been enforced?
Violation of the prohibition on giving gifts or hospitality to government officials and/or public servants is punishable by five years imprisonment and a fine of TND 5,000.
Section 9: OTHER MATTERS
9.1 Are there any other material issues in your jurisdiction that might affect a public M&A transaction?