Industry and Commerce

Energy Use and Production

State Taxes

President Saparmurat Niyazov emphasised that development of small-scale business was the matter of national importance. This theme was discussed at the epoch-making XVI Halk Maslakhaty. In October 2005, the People’s Council adopted the Law of Turkmenistan envisaging introduction of the amendments and changes to the Tax Code of Turkmenistan stipulating the simplified taxation system

The new taxation system establishes payment of fixed amount of income tax (fixed patent fee) as well as tax on proceeds of entrepreneurial activities (additional patent fee) without being reduced for the amount of deductions stipulated by the relevant articles of the Tax Code.

A fixed patent fee is paid ahead of the period during which a taxpayer is going to carry out entrepreneurial activities. Henceforth, this period is not to be less than three months.

The new rates of a fixed patent fee seem to be quite nominal almost for all kinds of entrepreneurial activities. For example, the rate of a fixed patent fee for foodstuff producers is to make up between 50,000-1,000.000 manats per month, for entrepreneurs rendering consumer services – 20,000-400,000 manats per month, private traders –20,000-3,000.000 manats per month, etc.

The tax rate on proceeds of entrepreneurial activities (additional patent fee) is to make up 2 per cent of gross income. The terms of submitting the tax declarations were also changed.

Thus, in Turkmenistan another step towards successive improvement of the relationships formed between the state and small-scale business has been made. The measures taken to improve the national taxation system and promote developing the private sector of national economy will have the most favourable impact on enhancement of the country’s economic power. It is known that the growth of private sector has immediate influence on such sphere of human life as saturation of domestic market in various goods, employment and increase of the nation’s well being.

Article 1. General provisions
A value-added tax is a procedure for a part of an added value, being created at all stages to produce goods (works, services) to be assigned to budget.
A value-added tax is to be assigned in the currency of Turkmenistan.
Article 2. Tax payers
1. Entities as follows are considered to be value-added tax payers:
- legal entities, including enterprises with foreign investments, which exercise production and other commercial business;
- branches, affiliates, representative offices of legal entities and other enterprise individual divisions, located at the territory of Turkmenistan, being individually engaged in selling goods (works, services);
- international associations and foreign legal entities, exercising production and other commercial business at the territory of Turkmenistan;
- entities, being engaged in entrepreneur business free of forming a legal entity, provided that proceeds thereof, resulted from selling goods (works, services) is over 10 minimum salaries per year.
2. Enterprises and organizations, specified in paragraph 1, are hereinafter referred to as the enterprise.
Article 3. Taxation objects
The taxation objects are turnovers for goods (works, services), export-import operations inclusive, to be sold at the territory of Turkmenistan.
Items as follows are to be taxed:
- turnovers to sell all goods( works, services) related to own production and purchased aside;
- turnovers to sell goods( works, services) inside enterprise for own consumption, which costs are not to be treated as production and trading costs , as well as for the staff;
- turnovers to sell goods( works, services) free of paying cost by being exchanged for other goods (works, services);
- turnovers to take over goods (works, services) free of charge to other legal or physical entities;
- turnovers to sell pledge items, including transfer thereof to a mortgagee, provided that a pledge obligation has not been fulfilled


State Information Agency of Turkmenistan (TDH)

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