1. What are the current tax rates in Turkmenistan?

As of 2021, the current tax rates in Turkmenistan are:

1. Personal income tax: 10%
2. Corporate income tax: 20%
3. Value-added tax (VAT): 15%
4. Social security contributions:
– Employee contribution: 6% of gross salary
– Employer contribution: 24% of gross salary

2. Are there any additional taxes or fees in Turkmenistan?

Aside from the aforementioned taxes, there may be some additional taxes or fees that businesses and individuals may need to pay in Turkmenistan, such as:

1. Property tax: This applies to both individuals and entities who own property in Turkmenistan.
2. Excise tax: This is a type of consumption tax on certain products, such as tobacco products, alcoholic beverages, and luxury goods.
3. Environmental tax: This applies to entities that cause environmental pollution or use natural resources.
4. Customs duties: These are taxes imposed on goods imported into the country.

3. Is there a flat tax rate in Turkmenistan?

No, there is no flat tax rate in Turkmenistan for either individuals or corporations. The personal income tax rate for residents is 10%, but non-residents may be subject to different rates based on their income level and type of income.

Similarly, the corporate income tax rate is set at a flat rate of 20%, but certain industries may have different rates.

4. What is the standard deduction for personal income tax in Turkmenistan?
There is no specific amount for a standard deduction for personal income tax in Turkmenistan. However, certain expenses and deductions can be taken into account when calculating taxable income, such as medical expenses, donations to charitable organizations, and education expenses for dependents.

5. How often do I need to file my taxes in Turkmenistan?

Individuals must file their annual personal income tax return by March 20th of the following year. Corporate tax returns must be filed on a quarterly basis, with final annual tax returns due by April 30th of the following year.

6. Are there any tax incentives in Turkmenistan?
There are several tax incentives available in Turkmenistan, including:

1. Tax holidays: Certain industries and regions may be eligible for a period of exemption from corporate income tax.
2. Investment credits: Investors can receive a credit against their corporate income tax liability for investments in specific sectors.
3. Income tax exemptions: Certain categories of employees, such as disabled individuals, may be eligible for an income tax exemption.
4. Reduced rates: Small businesses with annual revenues below a certain threshold may qualify for reduced income tax rates.

It is important to note that these incentives may vary and have specific qualification criteria, so it is best to consult with tax authorities or a local expert for more information.

2. How does Turkmenistan determine income tax for individuals and businesses?

The income tax in Turkmenistan is determined by the country’s Tax Code and is administered by the State Tax Service.

For individuals, income tax is calculated based on a progressive tax system, with higher-income earners being subject to higher tax rates. The current individual income tax rates are as follows:

– 8% for annual incomes up to TMT 250,000
– 12% for annual incomes between TMT 250,000 and TMT 1 million
– 17% for annual incomes between TMT 1 million and TMT 2 million
– 20% for annual incomes above TMT 2 million

Taxable income includes all forms of income, such as wages, salary, bonuses, commissions, rental income, interest income, and capital gains. Deductions may be allowed for certain expenses such as social security contributions and charitable donations.

For businesses, the corporate income tax rate is a flat rate of 15%. This applies to both domestic and foreign companies carrying out business in Turkmenistan.

In addition to income tax, there are also other taxes and fees that individuals and businesses may be subject to depending on their activities. These include value-added tax (VAT), property taxes, environmental fees, and others.

It is important for taxpayers in Turkmenistan to stay informed about any changes or updates to the country’s taxation system to ensure compliance with the law.

3. Are there any tax relief programs or deductions available for taxpayers in Turkmenistan?

There are currently no specific tax relief programs or deductions available for taxpayers in Turkmenistan. However, certain expenses related to business and investments may be deducted from taxable income. Taxpayers can consult with a qualified tax advisor or the State Tax Service of Turkmenistan for more information on tax deductions and potential tax benefits.

4. What are the major types of taxes collected in Turkmenistan, and how much revenue do they generate?

The major types of taxes collected in Turkmenistan are income tax, value-added tax (VAT), excise tax, and corporate tax. These taxes generate the majority of the country’s revenue.

1. Income Tax: Turkmenistan has a progressive income tax system with four different tax rates ranging from 10% to 20%. Individuals who earn less than 500 Turkmen Manat (TMT) per month are exempt from paying income tax. In 2020, income tax generated approximately TMT 2.5 billion in revenue.

2. Value-Added Tax (VAT): VAT is applied to the sale of goods and services within the country at a standard rate of 15%. Some items such as basic food products and medicine are exempt from VAT. In 2020, VAT revenue was approximately TMT 11 billion.

3. Excise Tax: Excise tax is levied on specific goods such as alcohol, tobacco, fuel, and luxury items at various rates depending on the type of product. In 2020, excise tax brought in around TMT 1 billion in revenue.

4. Corporate Tax: The corporate tax rate in Turkmenistan is a flat rate of 8%. Companies must also pay a unified social payment equal to 32% of employee wages. In 2020, corporate taxes accounted for approximately TMT 2 billion in revenue.

In addition to these major types of taxes, Turkmenistan also collects property taxes, customs duties, and other miscellaneous taxes which contribute to overall government revenue.

5. How does sales tax and value-added tax (VAT) work in Turkmenistan?

Sales tax and value-added tax (VAT) are both forms of consumption-based taxes in Turkmenistan. Sales tax is applied to the final sale of goods or services, while VAT is applied at each stage of the production and distribution process.

The current standard rate for both sales tax and VAT in Turkmenistan is 15%, with reduced rates of 5% and 0% applied to certain products and industries.

Businesses that have an annual turnover above a certain threshold are required to register for VAT. Registered businesses can claim back VAT paid on their purchases, which helps to mitigate the impact of the tax on their bottom line.

Sales tax is collected by the State Tax Service at the point of sale, while VAT is collected by businesses at each stage of production and distribution. Businesses are responsible for reporting and remitting VAT they have collected to the State Tax Service.

Both sales tax and VAT revenue contribute significantly to the Turkmenistan government’s overall budget. However, there have been criticisms of the country’s opaque tax system, as well as concerns about potential corruption or mismanagement within the State Tax Service.

6. Are there any tax treaties in place between Turkmenistan and other countries to avoid double taxation for individuals and businesses?

Yes, Turkmenistan has signed tax treaties with several countries to avoid double taxation for individuals and businesses. These include:

1. Russia: This treaty aims to prevent double taxation and fiscal evasion between the two countries. It covers income taxes on individuals, corporations, and joint ventures.

2. Belarus: This treaty covers both income and capital taxes for individuals, corporations, and other entities residing in either country.

3. Kazakhstan: The tax treaty between Turkmenistan and Kazakhstan aims to eliminate double taxation on income and property taxes for individuals and corporations.

4. Uzbekistan: This treaty covers income taxes for individuals and corporations residing in either country.

5. China: The tax treaty between Turkmenistan and China addresses issues of double taxation on income, profits, dividends, interest, royalties, capital gains, etc.

6. United Arab Emirates (UAE): The tax treaty between Uzbekistan and the UAE aims to avoid double taxation on income taxes for individuals and corporations.

7. Qatar: The tax treaty between Turkmenistan and Qatar focuses on eliminating double taxation on income taxes for individuals and corporations

8. Turkey: This treaty aims to avoid double taxation of income taxes for individuals, companies, partnerships, etc., operating in either country.

9. Iran: The tax agreement between Turkmenistan and Iran seeks to prevent any cases of double taxation or tax discrimination between the two countries.

10. Korea: The purpose of this agreement is to promote mutual economic cooperation by providing relief from double taxation in terms of income taxes for individuals residing in either country.

7. What is the process for filing taxes in Turkmenistan? Is it mandatory for all citizens/residents to file a tax return?

The tax filing process in Turkmenistan varies depending on the type of taxpayer. For individuals, taxes are withheld by employers and remitted to the State Tax Service, so most individuals do not need to file a tax return. However, self-employed individuals or those with other sources of income must file a personal income tax return.

For businesses, they must file a corporate income tax return annually.

It is mandatory for all citizens/residents of Turkmenistan who have taxable income to file a tax return. Failure to do so may result in penalties and fines.

8. How does payroll or employment taxation work in Turkmenistan? Are employers responsible for paying certain taxes on behalf of employees?

Employers in Turkmenistan are required to withhold and pay certain taxes on behalf of their employees. These include:

1. Personal Income Tax (PIT): Employers must withhold personal income tax from their employees’ wages at progressive rates ranging from 5% to 20%, depending on the employee’s income level.

2. Social Security Contributions: Employers are also responsible for withholding social security contributions from their employees’ wages, which are set at a flat rate of 22% of the employee’s gross salary.

3. Pension Fund Contribution: Employers must contribute a percentage of their employees’ salaries to the state pension fund, which is currently set at 6% of an employee’s gross salary.

4. Health Insurance Contributions: Employers are required to contribute 3% of an employee’s gross salary to the state healthcare system.

All these taxes and contributions must be paid monthly to the relevant authorities by the employer. In addition, employers are also responsible for submitting monthly reports detailing their employees’ taxable income and amounts withheld for each type of tax or contribution.

Employees in Turkmenistan do not have any direct tax obligations as all taxes and contributions are paid by their employer on their behalf. However, individuals earning income from other sources, such as rent or investments, may need to file a tax return and pay any applicable taxes directly to the tax authorities.

It is important for employers in Turkmenistan to stay compliant with payroll and employment taxation regulations, as failure to do so can result in penalties and legal consequences. Consulting with a local accounting or HR firm can help ensure that employers are meeting all their obligations related to payroll and employment taxation in Turkmenistan.

9. Are there any specific tax incentives offered by the government to encourage certain industries or investments in Turkmenistan?

Yes, the government of Turkmenistan offers tax incentives to encourage certain industries and investments in the country. These incentives may vary depending on the specific industry or investment project.

Some of the common tax incentives offered by the government include:

1. Investment Tax Credit: Companies investing in new projects or expanding existing ones can receive a tax credit of up to 20% of their total investment.

2. Exemption from Value Added Tax (VAT): Certain industries, such as agriculture and exports, are exempt from VAT on their sales.

3. Customs Duty Exemption: Companies importing machinery, equipment, and raw materials for production purposes may be exempt from customs duties.

4. Corporate Income Tax Incentives: The government provides corporate income tax exemptions for companies operating in designated priority areas such as agriculture, manufacturing, and IT sectors.

5. Property Tax Incentives: The government offers exemptions or reduced rates for property taxes for companies engaged in production activities.

6. Employment Incentives: Companies that hire local labor and meet certain employment targets are eligible for reduced social security contributions and other employment-related benefits.

7. Infrastructure Development Incentives: The government offers various incentives to companies investing in infrastructure development projects, such as roads, airports, ports, and telecommunications networks.

It is important to note that these tax incentives may be subject to certain conditions and may vary depending on the location of the investment project. It is advisable to consult with a local tax expert before making any investment decisions in Turkmenistan.

10. Is there a progressive or flat tax system in place in Turkmenistan? How do different income levels affect the amount of taxes paid?

Turkmenistan has a progressive tax system in place, with different income levels being subject to varying tax rates.

Individuals earning up to 10 times the average monthly salary are taxed at a rate of 10%, while those earning more than 10 times the average monthly salary are taxed at a rate of 20%.

For corporations, the tax rate is also progressive and ranges from 8% to 22%, depending on the amount of annual profits. Small and medium-sized enterprises with annual profits less than 1 million Turkmen manat are exempt from corporate taxes.

There are also certain tax exemptions for specific industries, such as agriculture and small businesses in rural areas.

Overall, lower income individuals and smaller businesses may pay proportionately less in taxes compared to higher-income individuals and larger corporations.

11. What is the role of the national tax authority in collecting and enforcing taxes in Turkmenistan?

The national tax authority in Turkmenistan is the State Tax Service (STS), which is responsible for collecting and enforcing taxes. Its main roles include:

1. Registration of taxpayers: The STS is responsible for maintaining a database of all individuals and businesses that are required to pay taxes in Turkmenistan. This includes issuing taxpayer identification numbers (TINs) and registering taxpayers for specific types of taxes.

2. Collection of taxes: The STS collects various forms of taxes, including income tax, value-added tax (VAT), excise tax, property tax, and land tax. It is responsible for calculating the amount of tax owed by each taxpayer and collecting it in a timely manner.

3. Enforcement of tax laws: The STS is responsible for ensuring that taxpayers comply with all relevant tax laws and regulations. This includes conducting audits and investigations to identify potential cases of tax evasion or fraud.

4. Providing guidance and assistance to taxpayers: The STS provides guidance to taxpayers on how to properly calculate and file their taxes. It also offers online resources, such as electronic filing systems, to make the process easier for taxpayers.

5. Issuing penalties for non-compliance: If a taxpayer fails to comply with their tax obligations or submits inaccurate information on their tax filings, the STS has the authority to impose penalties. These penalties may include fines or interest payments on late payments.

6. Collaboration with other government agencies: The STS works closely with other government agencies, such as the Ministry of Finance and the Customs Service, to ensure effective coordination in taxation matters.

7. Monitoring economic activity: In order to accurately collect taxes, the STS monitors economic activity within Turkmenistan through data collection and analysis, as well as collaboration with other agencies.

Overall, the national tax authority plays a crucial role in generating revenue for the government by collecting taxes from individuals and businesses in Turkmenistan while also ensuring compliance with tax laws.

12. How often do tax laws change in Turkmenistan, and how can individuals/businesses stay updated on new regulations?

Tax laws in Turkmenistan can change frequently, and it is important for individuals and businesses to stay updated on any new regulations. The changes are usually announced by the State Tax Service of Turkmenistan through official publications and notices on their website. Additionally, consulting with a local tax advisor or accountant can also help individuals and businesses stay updated on any changes to tax laws in Turkmenistan.

13. Are there any special considerations for foreign investors or expatriates living/working in Turkmenistan regarding taxation?

Yes, foreign investors and expatriates may be subject to different tax regulations and rates compared to Turkmenistan nationals. They may also have additional reporting requirements for their income and assets. It is important for them to consult with a qualified tax advisor or the local tax authority to understand their specific tax obligations in Turkmenistan.

14. Can taxpayers appeal their tax assessments or challenge any errors made by the national tax authority?

Yes, taxpayers have the right to appeal their tax assessments or challenge any errors made by the national tax authority. This process is known as filing a tax objection or dispute, and it allows taxpayers to present evidence and arguments to support their case against the tax assessment. Taxpayers can also request a review of any penalties or interest charges that were imposed by the national tax authority.

The first step in this process is usually to file an administrative complaint with the tax authority explaining why the taxpayer disagrees with the assessment. If this does not resolve the issue, taxpayers may be able to appeal to an independent review board or tribunal. In some cases, taxpayers may need to take their case to court if they are still dissatisfied with the outcome.

It is important for taxpayers to keep accurate records and documentation to support their objections or disputes. They should also seek assistance from a tax professional or lawyer who is knowledgeable about local tax laws and procedures.

15. Are capital gains taxed differently than regular income in Turkmenistan? If so, what are the rules and rates applied?

Yes, capital gains are taxed differently than regular income in Turkmenistan. The tax rules and rates applied to capital gains are as follows:

1. Exemptions: Capital gains from the sale of personal assets such as a primary residence or personal vehicle are exempt from tax.

2. Taxable capital gains: All other capital gains are subject to taxation.

3. Tax rate: The tax rate on capital gains is 10%.

4. Holding period: If an individual holds a property or asset for more than two years before selling it, the profits earned from the sale may be considered as regular income rather than capital gains and will be taxed at the individual’s applicable income tax rate.

5. Calculation of taxable amount: The taxable amount of a capital gain is calculated by deducting the purchase price and any applicable expenses (such as legal fees, agent commissions, etc.) from the sale price.

6. Reporting and payment: Capital gains must be reported on a tax return and paid along with regular income taxes.

7. Inheritance tax: In case of inheritance, no taxes are payable on inherited property or assets unless they are sold for a profit within two years of receiving them; in this case, they will be subject to capital gains tax.

It is important to note that these rules and rates may change over time and it is advisable to consult with a tax professional for up-to-date information on taxation of capital gains in Turkmenistan.

16. Does inheritance or gift taxation exist in Turkmenistan, and if yes, what are the applicable rates?

There is no specific inheritance or gift tax in Turkmenistan. However, any assets inherited or gifted may be subject to income tax at the same rates as regular income (see question 13 for income tax rates). The taxable amount will depend on the value of the inherited or gifted assets and any applicable exemptions or deductions. It is recommended to consult with a local tax professional for further information on how inheritance and gift taxes are applied in Turkmenistan.

17. How is property taxed in Turkmenistan, both residential and commercial? And are there any exemptions available?

Property tax in Turkmenistan is levied on both residential and commercial properties. The tax rate for residential properties is 0.1% of the property’s assessed value, while the tax rate for commercial properties is 1% of the property’s assessed value.

There are certain exemptions available for property tax in Turkmenistan. These include:

1. Newly built or renovated buildings that have not been put into operation yet are exempt from property tax for a period of three years after completion.

2. Buildings owned by state-owned entities, as well as religious organizations and non-profit institutions, are exempt from property tax.

3. Agricultural land used for agricultural purposes is also exempt from property tax.

4. Property used by individuals with disabilities, war veterans, and certain other groups may be eligible for a reduced property tax rate or exemption.

5. Some local municipalities may offer additional exemptions or incentives for specific types of properties, such as new developments or environmentally-friendly buildings.

It is important to note that these exemptions may vary depending on the location and type of property, and it is advisable to consult with local authorities for specific details and eligibility requirements.

18. Are there any local or municipal taxes in addition to national taxes in Turkmenistan? How much do they contribute to overall tax revenue?

There are currently no local or municipal taxes in Turkmenistan. All taxes in the country are collected at the national level. Therefore, the contribution of these taxes to overall tax revenue is zero.

19. How do individual states/provinces within Turkmenistan handle taxes, and is there a uniform tax code across the entire country?

Individual states/provinces within Turkmenistan do not handle taxes separately. The country has a uniform tax code that applies to all regions and is implemented by the central government. Taxes are collected by the State Tax Service, which is responsible for administering and enforcing tax laws throughout the country. This includes both national taxes and local taxes, such as property taxes or sales taxes. There may be variations in tax rates for certain industries or types of businesses, but overall there is a standardized tax system across the entire country.

20. What are the plans for future tax reforms in Turkmenistan, and how will they impact taxpayers?

As of now, there are no specific plans for future tax reforms in Turkmenistan. However, the government is continually reviewing and evaluating the current tax system to make it more efficient and fair for taxpayers.

One potential reform that has been discussed is the introduction of a progressive income tax system. Currently, Turkmenistan has a flat income tax rate of 10%, but there have been calls for a more progressive system that would see higher earners pay a higher percentage of their income in taxes.

Another potential reform could be the simplification and streamlining of the tax code to make it easier for taxpayers to understand and comply with their tax obligations. This could involve reducing the number of taxes and introducing electronic filing systems.

It is difficult to say how these potential reforms would impact individual taxpayers without knowing the specifics of any proposed changes. However, in general, any changes that result in a more equitable and efficient tax system would likely be welcomed by taxpayers.