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LETTER OF THE MAIN STATE TAX SERVICE OF TURKMENISTAN AND MINISTRY OF FINANCE OF TURKMENISTAN

of February 16, 2010 No. 374/1

To the State Tax Services on welayats and Ashgabat

To head departments of finance of welayats and Ashgabat

The main State Tax Service of Turkmenistan and the Ministry of Finance of Turkmenistan, in connection with single questions on application of provisions of article 139 of the Tax Code of Turkmenistan concerning the tax discharge on property, report the following.

In case of determination of size of tax base for calculation of tax on property concerning the construction object which is not put into operation in accordance with the established procedure it is necessary to consider following provisions of the Tax code of Turkmenistan.

First of all it is necessary to pay attention that the specified property at the contractor began to join in the taxation object only with entry into force of part 4 of article 139 of the Tax Code of Turkmenistan in the edition changed by the Law of Turkmenistan of April 18, 2009 to No. 40-IV. In the given part of this Article, in particular it is specified that as a part of material current assets at the taxpayers performing accomplishment of installation and construction works the project cost of the construction which is not put into operation in accordance with the established procedure is considered.

Also we pay attention that the specified property only for the purpose of the taxation is considered in a way stated above. Therefore, as we understand, for the purposes of the taxation the rules of assessment applicable to assessment of material current assets shall be applied to such property.

As it is determined regarding 1 article 140 of the Tax Code of Turkmenistan concerning material current assets:

* tax base for the property tax is their annual average cost; and

* their cost is determined on the basis of accounting data and other documentary confirmed data on the taxation objects.

Part 2 of this Article specifies that the tax base is determined separately by each taxation object as average cost of the specified taxation objects for each corresponding accounting period.

The tax base for the first quarter, the first half of the year, nine months and tax year is determined respectively as one fourth, one seventh, one tenth and one thirteenth amounts, received in case of addition of costs of the taxation objects on the first day of every month of the accounting period and the first following the accounting period.

The law of Turkmenistan "About modification and amendments in the Tax code of Turkmenistan" of April 18, 2009 No. 40-IV concerning amendments of part 4 in article 139 of the Tax Code of Turkmenistan does not specify date of the introduction them in force. Therefore provisions of part 2 of article 3 of the Tax Code of Turkmenistan where it is said that the laws of Turkmenistan making changes to this Code which establish new or change the operating taxes, become effective after one month from the date of their official publication, but not earlier than 1 date following the end of the next accounting period on the corresponding tax are applied.

Therefore such property can be considered as the taxation object since July 1, 2009. Therefore, for calculation of tax base average cost of the specified taxation objects for each corresponding accounting period, namely in 2009 - in 9 months and year shall be determined.

So for calculation of tax base in 9 months the cost of such property for dates shall not be considered from January 1 to June 1, 2009 (it during this period was not the taxation object) and therefore to be accepted in the amount 0 manat, and for July 1, on August 1 and on September 1 - as the cost determined on the basis of accounting data and other documentary confirmed data.

As that follows from Item 2.15 of the Instruction for filling of the state statistical reporting under the form No. 2-ks "Report on commissioning of objects, fixed assets and investments into fixed capital" approved by the order Turkmenmillikhasabat of 18.11.2003 No. 90 objects belong to the objects which are in construction in progress: which construction proceeds; which construction is suspended, preserved or finally stopped, but not written off in accordance with the established procedure; the acceptance acts which are in operation, on which are not drawn up in accordance with the established procedure.

In the same Item of the Instruction it is said that construction in progress actually made costs on objects under construction since the beginning of construction before input constitute them in operation. These costs develop of the cost of the performed construction, installation and other works, the cost of the equipment in place and the equipment which is in installation on these objects, costs on development of the territory of building and other expenses connected with construction of the specified objects.

In case of determination of tax base this cost shall not include tax amounts on value added, except as specified, specified regarding the 4th article 155 of the Tax Code of Turkmenistan.

The tax rate in this case in 9 months 2009 and in calculation in general for this year shall be applied respectively in the amount of 0,75 and 1 percent.

Inform the above and managements of subordinated Tax Services and departments of finance, and also interested persons.

 

Deputy chief Glavnoy

State Tax Service of Turkmenistan

P. Pryanichnikov

Deputy minister

finance of Turkmenistan

D. Sadykov

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info

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