Accounting Outsourcing and
Tax compliance in Tajikistan

Tajikistan– Accounting Outsourcing and Tax Compliance

When accounting for Taxation in Tajikistan, it is a paramount that you understand the facts laid-out by the laws of the land. The state demands it, as a legal requirement, as a provision within the confinements of the tax laws.
Global Expansion Plus provides accounting outsourcing and tax compliance in Tajikistan. We provide services with support of our local accountants and tax specialists. We will perform bookkeeping, accounting and filling tax return on your behalf bearing all associated compliance risks.
Every state will put in place a tax system, to raise revenue. Tajikistan is no different. Whether a resident or a non-resident, individual or corporate, there is the need to understand taxation in Tajikistan. Otherwise, you are bound to get on the wrong side of the law.

Tajikistan in facts

  • Location: Central Asia
  • Territory: 143,100 square kilometers
  • Capital: Dushanbe
  • Official language: Tajik
  • Currency: Somoni (TJS)
  • Population: 9,27 million

Corporate income tax (CIT)

Corporate covers both resident and non-resident companies in Tajikistan. For the residents, a normal 23% rate applies for both incomes generated locally and aboard. However, non-residents, operating in Tajikistan, will only be taxed for incomes within the country. There is a special 13% CIT for corporates involved in production. The special, low, rate encourages growth by lowering the cost of production for companies. When accounting for corporate income tax in Tajikistan, allowable expenses or deductions help to reduce the taxable income. Also, losses carried forward from the previous financial year lower the same.

Simplified Tax System

Small business entities are already at a disadvantage in terms of the financial muscle. As a result, the state offers a special rate of 6% for such entities. The requirements to qualify for this is that the small business must register at most, 1 million in annual revenue. To encourage production in Tajikistan, small businesses in the line of production attract a 5% tax rate. It is a special tax system favoring small businesses in Tajikistan that make up a huge part of the economy in the country.

Value-added Tax (VAT)

VAT applies to all goods and services locally sold. The rate is 18% for the normal goods. However, there are goods and services exempt and they include those not provided under the supply rules of Tajikistan, such as:
  • Financial services;
  • Real estate property sale, rent or transfer, and
  • Various medical services, among others.

Personal Income tax (PIT)

In Tajikistan, PIT system varies depending on the range of income, activity, and the residence status of an individual. It ranges from 0% to 13%, but a 25% rate applies to non-residents for the employment income in the country
There is a simplified tax system under the PIT that aims to lower the personal income tax for individuals earning at most TJS 1 million per year. Income due to production activities attracts a 5% tax rate and 6% rate for other activities.

Withholding tax

All windfalls or incomes that are not subject to PIT or corporate tax systems, fall under WHT. Different rates apply depending on the source of the income. It could be due to royalties, insurance premiums, or dividends earned at the end of the financial year. Either way, it attracts different rates. Such rates and the source of incomes can be summarized as below:
  • International transport and communication 5% to 6%
  • Premiums from insurance companies 6%
  • Interest incomes and dividends 12%
  • Rent, leases, management fees, and royalties 15%
Even with the above rates for WHT, there are those incomes which are exempt from this tax. They include:
  • Interest income due to investment in government securities;
  • Interest due to tradable bonds;
  • Interest as a result of investing in Eurobonds-related coupons;

Payroll related taxation

The nature of taxation is in the form of social contribution. The state has set out taxation rules that help categorize employees based on how much they earn and the rate at which the tax applies. The employer is the one liable to remit or deduct a proportion of the employee’s salary in the form of social contribution. The social contributions and taxation of annual salaries, rules are set out as follows:
  • The medical insurance fund – attracts a rate of 1.5% for any amount of salary incomes.
  • The pension fund – 22% tax rate applies for the first RUB 1.15 million, and 10% for anything above that. This social contribution also covers foreigners living in Russia, temporarily, where the same rates apply.
  • The social insurance fund – attracts a rate of 2.9% for the first RUB 0.865 million.
Apart from the social contribution by employees, employers also owe a duty of care to their employees. On that light, they contribute a sizeable amount in the form of insurance to cover work-related risks such as injuries and diseases. The rate for such contributions ranges from 0.2% to 8.5%, depending on the nature of the work the employee engages in.

Import/ Export related taxation

Imports and exports also contribute to the revenue in the form of taxes. They are classified as follows:

Custom duty

When it comes to imports, goods have to go through certification or verification for clearance into the country. All goods crossing the customs border will be subject to a flat rate, which is the custom duty. However, it will depend on the value of the goods on the move.

Excise taxes

It applies to the locally manufactured goods, imports and exports. However, for the exports, they are usually exempt to help encourage favorable balance of payments. Harmful products imported or locally manufactured, such as cigarettes, tobacco, and alcohol are excisable. Also, cars and oils fall in this category of products. The rates may vary depending on one factor or the other.
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