Taxes in Turkmenistan

The main legal basis is the unified Tax Code of Turkmenistan, Salgytlar hakynda Türkmenistanyň bitewi Kanuny, also referred to as the Nalogovyy kodeks. The Ministry of Finance and Economy, the Tax Directorate, local tax offices in welaýat, şäher and etrap areas, the State Customs Service and financial authorities administer different parts of the system. National tax rules are generally uniform, although the distribution of tax revenue between regional budgets differs. Electronic services are available through e.fineconomic.gov.tm mainly for legal entities and individual entrepreneurs. Online registration uses passport and telephone details, identity confirmation normally takes place in person at a tax office, and an inspector activates access. The portal is mainly operated in Türkmençe and supports electronic filing after activation. The tax year runs from 1 January through 31 December. Foreign-currency amounts are converted using the official exchange rate of Türkmenistanyň Merkezi banky. International tax agreements take priority where their conditions apply. Taxpayers generally have to keep records of income, deductions, costs and taxable objects, file the required returns and pay amounts due. Legal entities and individual entrepreneurs must report the opening or closing of foreign bank accounts within three days. Payments transferred to the state budget by bank are not subject to a bank transfer fee. Individuals are generally taxed at 10% on taxable income. A tax agent normally withholds the amount at each payment and transfers it on the payment day for money payments or no later than the following day for benefits in kind. The agent's annual report is generally due by 20 January of the following year. Non-agent income and foreign income follow separate rules, and a foreign national generally files the relevant declaration by 1 April of the following year. Dividends and other equity income received by an individual are taxed at 10%. Individual entrepreneurs may use the general system, which applies 10% to income less documented costs, or a simplified or patent-based system when the activity is one of those designated by the Cabinet of Ministers. Under the patent system, one fixed payment applies to each activity and, where several activities are carried out, the highest applicable payment is used. A further 2% tax on gross income can apply, with no deduction of costs. Simplified returns are typically due by the 15th of the following month and payment by the 25th; under the general system, the return is typically due by the 25th and payment by the 10th of the following month. Resident legal entities and permanent establishments calculate profit tax from profit after permitted deductions. The standard rate for a resident legal entity is 8%. A 50% rate applies to state credit institutions, state insurers and activities involving telecommunications, standardization, metrology or certification, while 20% applies to other legal entities. Private small legal entities may fall under a special 2% gross-income regime with limited deductions. Youth enterprises can receive a reduction of 50% in the first year and 25% in the second and third years. Dividends and other equity income received by a legal entity are taxed at 15%. Hydrocarbon activities are governed by special rules under the Law on Hydrocarbon Resources. A nonresident without a permanent establishment generally faces 15% withholding tax on gross income from Turkmenistan, excluding value added tax. The rate for renting a ship or aircraft without crew is 6%. A tax agent normally reports such withholding by the 20th of the following month and pays it under the applicable withholding procedure. Value added tax, called goşulan baha üçin salgyt, generally applies to taxable turnover of legal entities and individual entrepreneurs at 15%. The tax base is the price without value added tax. A zero rate applies to specified transactions under Article 105. The Central Bank, certain hydrocarbon contractors and subcontractors carrying out petroleum work, private-form legal entities and individual entrepreneurs under the simplified system are among the categories identified as not being value added tax payers. Legal entities and partnership members generally report by month, while individual entrepreneurs and partnerships have special half-year or annual reporting arrangements. Returns are typically due by the 20th of the following month and payment by the 25th. A reverse-charge or withholding mechanism may apply to payments to nonresidents. A tax invoice, or hasap-faktura, supports the transaction, and input tax can be deducted only when the deduction is legally allowed and can be allocated to the taxable activity. Excise applies to the production or import of specified goods by legal entities and individuals. Examples include alcohol and beer, tobacco, petrol and diesel. The recorded rate schedule lists beer at 34.5%, wine or alcohol up to 20% at 44.85%, alcohol above 20% and up to 30% at 70.15%, alcohol above 30% at 88.55% and petrol or diesel at 40%. Import treatment can differ; examples in the schedule include beer at 66% with a minimum of 6 TMT per litre and tobacco at 59% with a minimum of USD 2.5 per pack. Filing and payment deadlines depend on the Tax Code and the customs procedure. The subsoil-use tax applies to legal entities and individual entrepreneurs extracting minerals other than groundwater, except for hydrocarbon contractors covered by a special contract. The rate is 22% for gas and 10% for crude oil. Other minerals use a profitability scale from 0% at up to 15% profitability to 50% above 25%, with intermediate rates of 30%, 32%, 35%, 40% and 45%. The reporting period is quarterly, with the return generally due by the 20th of the following month and payment by the 25th. Hydrocarbon contractors can also face advance payments due on the 25th of each month. Property tax generally applies to legal entities and foreign legal entities holding production property in Turkmenistan. The base is the average annual value of fixed assets and inventories, and the rate is 1%. Accounting is made at 0.25% for the first quarter, 0.5% for the first half-year, 0.75% for nine months and 1% for the year. The return is generally due by the 20th and payment by the 25th of the following month. The supplied rule excludes private-form legal entities from this property-tax payer category. Exemptions include certain education, health, agricultural, religious and public organizations and specified free-zone property. Turkmenistan also uses local and purpose-specific levies. The advertising levy is 5% in Ashgabat and Arkadag, 4% in regional centers and 3% elsewhere. A territory-improvement fee, a levy on parking providers, a vehicle-sale levy payable before completing the transaction and a vehicle-holder levy payable before technical inspection may also apply. A housing or house levy is 0.3% of gross income after value added tax for individual entrepreneurs, with a minimum of 5 TMT per month; other employees pay 5 TMT per month, agricultural legal entities pay 0.5% and other legal entities pay 1.5%. A contribution to the Agriculture Fund is 3% of invoiced profit, and an Ashgabat special-account charge is 0.5% of its taxable base. Regional budget distribution is not the same as the taxpayer's rate. For 2026, the shares of value added tax, profit tax and subsoil-use tax assigned to local budgets differ among Ashgabat, Arkadag, Ahal, Balkan, Dashoguz, Lebap and Mary. For example, Dashoguz and Lebap receive 100% of the listed shares, while Ashgabat receives 5.1% of value added tax, 5% of profit tax and 6% of subsoil-use tax. Turkmenistan's official tax portal lists 30 active agreements for avoiding double taxation. Treaty relief generally requires an application and an official residence certificate from the other state. The certificate may be submitted before payment or within three years after the end of the relevant period. A foreign tax credit for income, profit or property tax is generally limited to the Turkmen tax amount and requires evidence from the foreign authority. The Tax Directorate can issue a certificate showing tax paid in Turkmenistan for a nonresident. An overpayment is first applied against another tax or sanction debt, generally from the following day. If no debt exists, the taxpayer can submit a written refund request; the tax office generally prepares a recommendation within 10 days and the financial authority refunds the amount within 20 days. A late refund carries a stated charge of 0.03% per day, and the refund claim is generally available for five years. Tax checks can be desk-based or documentary. A documentary check normally covers no more than the five preceding tax years, subject to exceptions where the tax base spans several periods. The tax office generally gives at least five working days' notice, but a suspected violation can permit a check without advance notice. A check normally lasts no more than two months; a higher tax authority can extend it up to one year. Cross-checks are possible, and corrections during a check can be restricted. A written complaint first goes to the head of the responsible tax office. A further complaint is generally filed within one month after the decision, and the authority normally decides within one month. Filing a complaint generally does not suspend enforcement. Court proceedings are available under Turkmen law. Unpaid liabilities can lead to interest, financial sanctions, account measures and securing or selling property; an undisputed debt of a legal entity can be collected without a separate lawsuit.