THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF BELARUS AND THE GOVERNMENT OF TURKMENISTAN ON THE PRINCIPLES OF COLLECTION OF INDIRECT TAXES DURING THE EXPORTING AND COMMODITY IMPORT (WORKS, SERVICES)
of May 17, 2002
The government of the Republic of Belarus and the Government of Turkmenistan which are hereinafter referred to as with the Parties
aiming at development of the mutually beneficial economic relations and deepening of economic integration, establishment of equal opportunities for business entities and to creation of conditions for fair competition,
being guided by the commonly accepted rules of international trade,
agreed as follows:
For the purpose of this agreement the following terms are used:
"indirect taxes" - the value added tax and excises (the excise tax or the excise duty);
"zero rate" - taxation on value added at the rate zero percent that means for the taxpayer the right to offsetting or compensation from the budget of the tax amounts on value added which are earlier paid;
"goods" - any property (including all types of energy), intangible assets, and also vehicles, except for any vehicles used for international carriages of passengers and goods including containers and other transport equipment;
"work" - activities which results have material expression and can be implemented for requirements satisfaction of the organization and (or) physical persons;
"service" - activities which results have no material expression are implemented and consumed in the course of implementation of these activities, and also the right to intellectual property items;
"export" - commodity exportation (works, services) from customs areas of the states of the Parties without obligation about the return import, implementation of works, services on customs area of the state of other Party;
"import" - commodity importation (works, services) on customs areas of the states of the Parties without obligation about the return export, implementation of works, services on customs area of the states of the Parties;
"pseudo-export" - dummy documentary registration of goods (works, services) as the state of the Party exported from customs area under which there is no actual commodity exportation (works, services) out of limits of customs area of the state of this Party;
"the principle of the country of destination" - not taxation by excises and application of zero rate in case of taxation on value added when exporting from customs area of the state of one Party and taxation by indirect taxes when importing on the effective rate established by the legislation of other Party;
from the Belarusian Side - the Ministry of Finance, the State Customs Committee, the Ministry of Taxes and Tax Collection;
from the Turkmen Side - the Ministry of Economics and finance, the Main State Tax Service.
Any of the Parties will not assess with indirect taxes the goods exported on customs area of the state of other Party.
This rule means taxation on value added on zero rate, and also release from excises of the exported goods.
The states of one Party imported on customs area goods which are exported from customs area of the state of other Party are assessed with indirect taxes in the country of the importer by the principle of the country of destination according to its legislation. Collection of indirect taxes is performed by customs authorities in case of commodity importation on customs area of the state of this Party.
1. The procedure for application of indirect taxes when rendering works (services) is drawn up by the separate Protocol which is integral part of this agreement. Before enforcement of this Protocol of work (service) are assessed with indirect taxes according to the legislation of the states of the Parties, except for the following works (services):
a) works (service) in transportation and servicing of the goods which are exported from customs area of the state of one Party on customs area of the state of other Party including works (services) in forwarding, loading, unloading and overload;
b) works (service) in transportation and servicing of goods in transit provided that the points of departure or purposes of goods are located in the territory of the states of the Parties, including works (services) in their forwarding, loading, unloading and overload;
c) services in transportation of passengers and baggage from customs area of the state of one Party on customs area of the state of other Party in the direct and opposite direction.
2. Works (service) listed in subitems and, and in Item 1 of this Article are assessed with the value added tax on zero rate in the state which taxpayers render such works (services), in case of the confirmation of the fact of their rendering according to the procedure established by the Parties.
For the purpose of ensuring completeness of collection of indirect taxes in case of commodity import (works, services), and also in order to avoid pseudo-export customs and tax authorities of the Parties will be developed and will enact the mechanism of control of movement of goods (works, services) through customs borders of the states of the Parties.
All disputes and disagreements between the Parties concerning interpretation or application of provisions of this agreement will be solved by negotiations and consultations between competent authorities. In the consent of the Parties changes and additions which will be drawn up by the Protocols which are integral part of this agreement can be made to this agreement.
The parties will communicate about changes and amendments in their domestic legislation concerning the taxes specified in this agreement.
This agreement does not affect the rights and obligations of the Parties following from other international treaties which participants are the Parties.
This agreement is signed sine die and becomes effective for the fifteenth day from the date of receipt of the last written notice of accomplishment of all interstate procedures by the Parties necessary for entry into force of this agreement.
The agreement will stop the action in six months after receipt of one of the Parties of the notification on intention to terminate this agreement if only this notification is not withdrawn under the agreement between the Parties before the expiration of this term.
This agreement is applied to goods (works, services) delivered after its entry into force.
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