Main changes in tax legislation of Turkmenistan starting from the beginning of the current year

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Changes made by Law

Article of the Tax Code

Amendments and addendums

Notes

Value added tax

1

Dated May 4, 2013

Part 1 article 106

In the list of goods, free from VAT has been included - sale of the textile goods by manufacturers to the organizations authorized in compliance with legislation of Turkmenistan to export goods on the border territories through trade stations and (or) directly

This benefit is not related to construction activity

2

Dated March 2, 2013

Part 2 of article 110

For implementation of the right of the taxpayer to offset VAT, withheld at the source of payments (as tax agent) issuance of tax invoice by foreign supplier or contractor is not required.

Earlier for offset of VAT such tax invoice was required.

Income (profit) tax of legal entities

3

Dated March 2, 2013

part 3 of article 149

Into gross revenue for determination of income tax is not included positive difference of re-estimation of fixed assets, in compliance with legislation of Turkmenistan and international standards of financial reporting.

Earlier this information was given in explanations of MFT and MSTST, but was not prescribed by the Code.

4

Dated March 02, 2013

Part 2 of article154

In composition of deductions, applicable for determination of taxable income indication of contributions to the state social security has been changed to pension contributions for mandatory pension security and obligatory professional pension security.

Changes made due to effectiveness of the Law of Turkmenistan "On state pension security".

5

Dated March 2, 2013

part 7 of article 154

In composition of deductions, not applicable for determination of taxable income, has been included negative difference from re-estimation of fixed assets, in compliance with legislation of Turkmenistan and international standards of financial reporting.

These changes are related to changes in part 3, article 149 of the Code.

6

Dated March 2, 2013

Part 1 article 157

Into expenses (costs) of the taxpayer are not included depreciation charges, related to positive difference, occurring due to re-estimation of fixed assets in accordance with legislation of Turkmenistan and international standards of financial reporting..

These changes are related to changes in part 3, article 149 and part 2 of article 154 of the Code. I.e. presently depreciation applicable for deductions is calculated from the amount of value of fixed assets without consideration of re-estimation.

7

Dated March 2, 2013

Part 2 of article 169

As in composition of deductions, applicable for determination of taxable income indication of contributions to the state social security has been changed to pension contributions for mandatory pension security and obligatory professional pension security, so amendment to the article has technical character and does not make significant difference.

Amendments are made due to effectiveness of the Law of Turkmenistan "On state pension security".

8

Dated March 2, 2013

Part 6 of article 180

Amendments are related to those cases, when tax agents have all grounds not to withhold tax at the source of payments (withholding tax) after expiration of the term of tax payment. This part was added with the list of grounds not to withhold tax indicated in part 4 article 179 of the Code-confirmation of tax service on the fact that paid to foreign legal entity income is related to its activity, carried out in Turkmenistan. In compliance with these amendments tax agent may not to pay to the budget withholding tax, not withheld earlier, even if such confirmation is received from the taxpayer with delay (after established payment term).

Earlier part 6 of article 180 of the Code was applicable with respect of those cases, when tax agent was not provided with form 25 in time.