GSL / International Taxation / Turkmenistan


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Taxes of Turkmenistan

Сorporate tax
Capital gains tax
15% (dividend), 15% (interest), 15% (royalty)
Withholding tax
Exchange control

Basic taxes (briefly)

Personal tax
Corporate tax (in detail)
Branches of foreign companies are taxed at a 20% rate, whereas Turkmen legal entities are taxed at an 8% rate (or a 2% rate if the company qualifies as a small or medium-sized enterprise)
Capital gains tax. Details
Regular rate
VAT. Details
VAT is normally paid at a 15% rate. Zero rate applies to exported goods (except for oil and gas) and international transportation services
Other taxes
Property tax, payroll tax, mining tax, car sales tax, etc.
Government fee
Stamp duty

Taxation of individuals

The general income tax rate is 10% and applies to income from employment, business and professional income, interest, royalties, real estate income and capital gains. The tax is normally charged at source. In the case of business and professional income, the tax is charged based on self-assessment.

Income tax

Turkmen legal entities are imposed with an 8% corporate income tax (or 2% if the company qualifies as a small or medium-sized enterprise).

Branches of foreign legal entities are imposed with a 20% corporate income tax.

Enterprises where the state owns over 50% of shares are imposed with a 20% profit tax.

Value-added tax

VAT rate is normally 15%. Zero rate applies to exported goods (except for oil and gas) and international transportation services.

Withholding tax

Income from sources in Turkmenistan received by a foreign legal entity that has no permanent establishment in Turkmenistan is usually imposed with a 15% withholding tax (6% for income from ship and airplane lease).

Exemption from withholding tax may be granted if the foreign legal entity is resident in a country that has an effective double taxation treaty (DTT) with Turkmenistan and the foreign legal entity follows certain administrative procedures.

Turkmenistan is an assignee of a number of DTTs entered into by the USSR, and some treaties have been entered into and ratified by the government of Turkmenistan.

Real estate tax

Real estate tax in Turkmenistan normally applies at the rate of 1% of the average annual net book value of fixed assets and average annual value of tangible assets used for commercial purposes and located in Turkmenistan.

Stamp duty

Even though some actions (for instance, registration of a branch) may result in the application of state duties of different sizes set by the government, there is no single mechanism for stamp duty/tax, which is usually practiced in other countries.

Social contributions

Employers pay for pension insurance at the rate of 20% of the aggregate amount of remuneration paid to local employees.

Additional 3,5% compulsory professional pension insurance shall be paid by employers in respect of employees who work in harmful conditions.

Workers may participate in voluntary pension insurance the minimum rate for which is set at 2% of the total amount of remuneration.

Income paid to foreign employees must not be subject to pension insurance payments.

Environmental tax

The Tax Code does not provide for an environmental or green tax in Turkmenistan. In Turkmenistan, however, there are environmental pollution charges that are imposed based on a separate decree and apply to legal entities that release pollutants into the environment. Rates vary depending on the type and toxicity of each released pollutant.

Advertising fee

Advertising fee is charged on the amount of advertising expenses and paid quarterly at a 3% to 5% rate depending on the payer’s location in Turkmenistan.

Controlled foreign company rules


Transfer pricing

The Tax Code of Turkmenistan contains provisions regarding state supervision of transfer pricing. According to those rules, tax authorities monitor and control transfer pricing for separate kinds of transactions, including related party transactions, foreign trade transactions and transactions where tax authorities, after tax inspections, state a significant deviation from the market price (i.e. over 20%).

International tax treaties

Turkmenistan has entered into 39 Double Tax Conventions (DTCs) with the following jurisdictions:

39 DTCs: Armenia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, China, Croatia, Czech Republic, Estonia, Finland, France, Georgia, Germany, Hungary, India, Iran, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Malaysia, Moldova, Pakistan, Romania, Russia, Saudi Arabia, Singapore, Slovakia, South Korea, Switzerland, Tajikistan, Turkey, Ukraine, United Arab, Emirates, United Kingdom, United States, Uzbekistan.

Turkmenistan has not yet singed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).

Foreign exchange controls

Foreign exchange controls matters in Turkmenistan are regulated by the Law “On Foreign Exchange Regulation and Foreign Exchange Controls in Foreign Economic Relations”.

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