The object of taxation of value added tax is taxable transactions performed by taxpayers on the territory of Turkmenistan in accordance with articles 98 and 99 of the Tax Code of Turkmenistan.
Following transactions are recognized as taxable:
- sale of goods, performance of works, provision of services, as well as transfer of property rights;
- execution of construction and installation works for their own needs. This does not include the performance of works related only to the installation and (or) installation of purchased or manufactured equipment, as well as its repair;
- receiving compensation for damage caused by theft or damage to goods from the perpetrators, as well as insurance compensation;
- use of goods, the performance of works, the provision of services for their own consumption, if the corresponding costs are not included in the deductions taken for calculating income tax (including through depreciation deductions).
Following transactions are not recognized as taxable:
a) circulation of currency, money, banknotes, which are legal means of payment, if such operations do not have numismatic purposes, are not related to the sale of currency by a legal entity that produced it by order of the Central Bank of Turkmenistan, are not the subject of services for the storage, collection of currency;
b) circulation of securities (alienation of the right of share participation in the enterprise), except for brokerage and intermediary services on them; issuance of a loan and receipt of interest on them;
c) gratuitous transfer:
- fixed assets, intangible assets and (or) other property of a legal entity to its legal successor (legal successors) during the reorganization of this legal entity;
- objects of social and industrial purposes (residential buildings, holiday homes, factories and other similar facilities) by decision of state authorities, local executive authorities and local self-government bodies;
- goods (gratuitous performance of works and services) by charitable organizations;
- goods (gratuitous performance of works and services) as humanitarian and (or) charitable assistance;
d) alienation of property:
- located on a land plot subject to seizure by decision of state authorities, local executive authorities and local self-government bodies for state or public needs, or due to improper use of land, cultural values;
- as a result of the requisition, confiscation or transfer of ownership of inherited property, as well as the acceptance by the state of ownerless property or treasures;
e) sale of goods, performance of work, provision of services within the framework of projects and programs of international humanitarian, financial and technical assistance and credits (loans) provided to Turkmenistan by foreign states or international organizations or individuals. The above applies to parties:
- authorized by foreign states, international organizations or individuals to carry out such sale of goods (works, services);
- identified as recipients of such assistance and (credits) loans;
- suppliers (performing work and providing services) under an agreement with the above authorized persons and recipients of such assistance and credits (loans), payment for which is made at the expense of these funds;
f) sale of goods, performance of work, provision of services by non-entrepreneurial legal entities on not for profit basis;
g) performance of work (provision of services) by state authorities, local executive authorities and local self-government bodies within the framework of the exercise of their exclusive powers in a certain field of activity, if the obligation to perform these works (provision of services) is established by the legislation of Turkmenistan. The above, in particular, includes the services of the state fire service, customs services, services for the certification of goods (works, services), other similar works and services;
h) the initial assignment of the right of claim arising from the contract for the sale of goods (work, services), or the transfer of the specified claim to another person on the basis of law;
i) transfer of property as a contribution to the authorized capital of other legal entities and partnerships;
j) the sale to its subordinate institutions and enterprises of goods purchased on the basis of foreign trade contracts concluded by public authorities on not for profit basis.
k) performance of work, provision of services within the framework of international agreements on the joint use of freight cars, containers and the provision of services.
For the purposes of the Tax Code of Turkmenistan, a commodity is recognized as property sold or intended for sale. Electricity and heat, gas, water are considered as commodities.
Source: Tax Code of Turkmenistan
