Approved as the Vice-chairman of the state customs of Turkmenistan, the Deputy minister of economy and finance of Turkmenistan and the Deputy chief of the main State Tax Service of Turkmenistan on April 12, 2001

Regulations on procedure for application of resolutions of the President of Turkmenistan of September 8, 2000 No. 4828 "About measures for enhancement of the taxation system of Turkmenistan" and of April 10, 2001 No. 5207 "About additional benefits on the value added tax" concerning calculation and the tax discharge on value added

This Provision is developed according to resolutions of the President of Turkmenistan of September 8, 2000 No. 4828 "About measures for enhancement of the taxation system of Turkmenistan" and of April 10, 2001 No. 5207 "About additional benefits on the value added tax" regarding questions of calculation and tax discharge on value added on the goods imported on the territory of Turkmenistan, and also on collection of this tax on the foreign legal entities performing performance of works and rendering services in the territory of Turkmenistan, source of payments.

Section I. Calculation and the tax discharge on value added on imported goods

1. General provisions

1.1 The value added tax is paid from the goods imported by legal entities of Turkmenistan, foreign legal entities and their separate divisions (representations and branches) on the territory of Turkmenistan. The tax discharge on value added from the goods imported on the territory of Turkmenistan is made when implementing of customs clearance by them. This provision extends also to the companies which taxation is performed on the simplified system. Subjects of simplified taxation system are determined in article 61 of the Law of Turkmenistan "About the income tax".

1.2 The value added tax on imported goods is levied by customs authorities to or at the time of customs clearance.

1.3 The value added tax is levied in national currency of Turkmenistan and enlisted in the Centralized budget of Turkmenistan.

1.4 The tax amount on value added paid in case of customs clearance of imported goods (in the form of raw materials and materials) is set off in case of calculation of the value added tax on made from the specified raw materials and materials of products in generally established procedure. For the companies of wholesale and retail trade performing supplying and sales activities tax amount on value added on the goods imported by them also it is set off in case of calculation of the value added tax in case of the subsequent realization of imported goods, regarding the value added tax, falling on the realized goods. If the specified goods are tax-exempt on value added in case of their realization in the territory of Turkmenistan, then the paid value added tax falling on the realized goods belongs on distribution costs.

1.5 Earlier adopted legal acts providing tax benefits to certain taxpayers keep the force for action of such privileges.

2. Taxpayers on value added on imported goods

2.1 Taxpayers on value added on the goods imported into Turkmenistan are legal entities of Turkmenistan, foreign legal entities and their separate divisions (representations and branches) importing goods.

2.2 The legal entities who are contractors and subcontractors according to the Law of Turkmenistan "About hydrocarbonic resources" concerning the goods imported on customs area of Turkmenistan intended for oil works are not taxpayers on value added. In case the legal entities who are contractors and subcontractors according to the Law of Turkmenistan "About hydrocarbonic resources" perform import to customs area of Turkmenistan of goods of the oil works which are not intended for implementation, the value added tax is paid according to the procedure, established by this Provision.

2.3 In case of commodity importation by legal entities the value added tax is paid by the customs applicant or the other person responsible for the tax discharge on value added along with payment of other customs payments, that is to or at the time of customs clearance.

3. The taxation object on value added and tax base on imported goods

3.1 The taxation object on value added are the goods imported on customs area of Turkmenistan.

The value added tax is not paid in case of customs clearance imported on the territory of Turkmenistan:

- goods according to the established list (appendix No. 1 to this Provision);

- the goods delivered according to intergovernmental agreements, government decisions, and also delivered within projects and programs of the international humanitarian, financial and technical assistance;

- the goods received on clearing on account of commodity deliveries for natural gas and the electric power.

3.2 Tax base for calculation of the value added tax on the goods imported on customs area of Turkmenistan is customs value of these goods, taking into account subjects to payment on excise goods - excise.

The tax base for calculation of the value added tax on imported goods is estimated by each type of imported goods and represents cash amount, subject to payment for all imported goods.

Customs value for the goods imported under the contracts registered at the State commodity and raw exchange of Turkmenistan is the cost of goods determined on the basis of the price which is actually paid or subject to payment or compensated by counter deliveries of goods in accordance with the terms of the foreign trade transaction taking into account expenses on the goods delivery (transportations, loading, unloading, insurance) to customs area of Turkmenistan in accordance with the terms of delivery.

In case of lack of contracts for imported goods customs value is determined proceeding from the market (wholesale) prices of identical (uniform) imported goods.

Customs value of goods in foreign currency are converted into manats at the Central Bank rate of Turkmenistan for date of customs clearance of the goods imported on customs area of Turkmenistan.

4. Procedure for calculation and payment due dates of the value added tax

4.1 The tax amount on value added which is subject to payment in the budget for imported goods is determined estimated and established) by the customs authority making customs clearance proceeding from the tax base determined according to Item 3.2 of this provision and the established tax rate on value added - 20 percent.

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