In connection with incoming requests for withholding from citizens of Turkmenistan working at foreign diplomatic missions and representations of equivalent status accredited in our country, and transfer of the individual income tax to the State Budget, the Main State Tax Service and the Ministry of Finance of Turkmenistan commits the following.
The provisions contained in Paragraph 2, Article 195 of the Tax Code of Turkmenistan do not provide for the recognition as a tax agents of diplomatic missions and representations of equivalent status of foreign countries in Turkmenistan. In this regard, in accordance with Article 196 of the Code, individuals who derive income under civil law contracts, as well as those who earn an income from which the tax was not withheld by a tax agent. The tax I such revenues is calculated and paid on one’s own. According to Part 5, Article 24 of the Tax Code, such individuals are subject to registration as a taxpayer in the tax services in the place of residence, respectively.
Under Article 191 of the Tax Code, a tax period for such individuals is the tax year, and declaration during the tax year is submitted for the first half-year and the tax year. According to Part 1, Article 197 of the Code, a tax declaration shall be submitted by such individuals not later than the 25 th day of the month following the reporting period.
In connection with the foregoing, citizens of Turkmenistan who work at foreign diplomatic missions and representations of equivalent status accredited in our country must calculate and pay individual income taxes on their own.
In accordance with Article 6 of the Tax Code, if international treaties of Turkmenistan establish other provisions than those contained in this Code, then the provisions of international treaties shall be applied.
In compliance with the established procedural regulations of internal tax legislation, local employees – citizens of Turkmenistan who work at foreign diplomatic missions and representations of equivalent status accredited in our country can use the provisions contained in the relevant articles of the double taxation avoidance agreements concluded between Turkmenistan and any foreign state.
In virtue of Part 1, Article 198 of the code, the amount of income tax paid by a resident of Turkmenistan outside Turkmenistan in accordance with the tax legislation of other states, is reckoned towards payment of in come tax in Turkmenistan.
The deductible amount of tax cannot exceed the amount of income tax calculated in accordance with this Code, regarding the revenues derived outside Turkmenistan.
The reason for an offset can be documents of the tax or other authorized agencies of foreign states that confirm the fact that the tax was paid outside Turkmenistan.
This applies to the amount of individual income tax, which by virtue of double taxation avoidance contract (agreement), and subject to the established procedural regulations, cannot be returned to a taxpayer.
Thus, local employees-citizens of Turkmenistan who work at diplomatic missions and representations of equivalent status of foreign countries accredited in Turkmenistan, can use the provisions contained in the relevant articles of a double taxation avoidance agreement concluded between Turkmenistan and any foreign country. In virtue of the foregoing, employees, -citizens of Turkmenistan who work at diplomatic missions and representations of equivalent status of foreign countries accredited in Turkmenistan, must comply with the provisions specified in Article 196 of the Tax Code, which establishes that “individuals gaining income under civil law agreements as well as when the tax was not withheld by tax agents from revenues earned by them, these citizens must calculate and pay the individual income on their own”.
This note prepared by Tax Office of Turkmenistan, published magazine `Tax system of Turkmenistan` N 2/2017, page 18-19.
Source : Atavatan Turkmenistan News Agengy (ATHA) and www.turkmenlawyer.com
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