Real Estate and Rental Income Taxation in Turkmenistan

Rental income from property in Turkmenistan is subject to income tax. This guide provides an overview of how rental income is taxed, what deductions are available, and the obligations for landlords and property investors.

Taxation of Rental Income

Rental income in Turkmenistan is generally treated as ordinary income and taxed at the applicable rates:

• Individuals: Net rental income taxed at 10% flat PIT rate
• Corporations: Included in business income, taxed at 20% (8% for small businesses)
• Non-Residents: 10% withholding tax on gross rental income

Allowable Deductions

Landlords can deduct expenses incurred in earning rental income, including:

• Property Management Fees: Fees paid to property management companies
• Maintenance and Repairs: Costs to maintain the property in good condition
• Insurance Premiums: Building and landlord liability insurance
• Mortgage Interest: Interest paid on property loans
• Property Taxes: Annual property taxes paid
• Utilities: If paid by the landlord
• Advertising: Costs to find tenants
• Legal and Professional Fees: Costs related to rental activity
• Depreciation: Building depreciation

Non-Deductible Expenses

• Capital improvements (must be depreciated)
• Personal use portion of expenses
• Principal repayment on mortgages

Depreciation of Rental Property

The building structure (not land) can be depreciated for tax purposes. The standard method is:

• Method: Straight-line depreciation
• Rate: Standard depreciation rates apply
• Basis: Construction cost or acquisition cost allocated to building

Property Acquisition Costs

When purchasing property, buyers pay registration duties of approximately 1-2% of the property value. These duties are not deductible but are added to the cost basis for capital gains purposes.

Filing Requirements

Landlords must report rental income in their annual tax return. The tax year follows the calendar year. Rental income is reported on a net basis.