Turkmenistan - Taxation



Turkmenistan has significantly lowered income tax rates in 2002. The top rat is 11%, down from 25% in 2000, and 40% in the 1990s. The marginal rate for the average taxpayer is also 11%. The top corporate rate is 25%, down from 45%. A 15% rate is charged on income from dividends, copyrights, licenses, leases, royalties and other forms of passive income, although investors holding more than 30% of hard currency shares in an enterprise's capital fund are exempt from the dividend tax. Enterprises are not required to pay the profit tax until investors have fully recovered their original investment. Also, companies that reinvest profits are exempt from tax payments on the reinvested capital. Equipment contributing to the capital of joint ventures is exempt from import duties. Free economic zones have been created to attract foreign capital. There us a value-added tax (VAT) imposed on all goods and services, sold or bartered, of 10% for foodstuffs and 20% for all other items. In March 1994, the president exempted from the VAT registered foreign investors, private enterprises (other than Turkmenpotrelsoyuz enterprises) and businesses importing and selling consumer goods.

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