Tax Treaties and Cross-Border Taxation in Turkmenistan

Cross-border taxation in Turkmenistan covers how the country taxes foreign investments, income from abroad, and transactions between related parties. Turkmenistan has a limited network of tax treaties, primarily with CIS countries.

Withholding Taxes

Turkmenistan imposes withholding tax on payments to non-residents:

Tax Treaties (DTTs)

Turkmenistan has a limited network of double tax treaties, primarily with CIS countries including Russia, Belarus, Kazakhstan, Uzbekistan, Azerbaijan, Armenia, Kyrgyzstan, Tajikistan, and Ukraine. Where treaties apply, they may reduce withholding tax rates and provide mechanisms for resolving double taxation disputes. The treaty network is limited compared to OECD standards.

Transfer Pricing

Turkmenistan follows the arm's length principle for related-party transactions. Transfer pricing documentation may be required for:

• Transactions exceeding certain thresholds with related parties
• Intellectual property transactions
• Financing arrangements

Foreign Tax Credit

Resident taxpayers can claim a foreign tax credit for taxes paid abroad on foreign-source income. The credit is limited to the Turkmenistan tax payable on that income.

Exchange of Information

Turkmenistan participates in limited international tax cooperation. The country has signed bilateral agreements for exchange of information with certain treaty partners.

Inbound Investment

Foreign investors in Turkmenistan are subject to:

• CIT on Turkmenistan-source income at 20% (8% for small businesses)
• Withholding taxes on distributions
• Free economic zones offer 0% CIT for 5-10 years
• State approval required for investment in certain sectors

Outbound Investment

Turkmenistan residents investing abroad are taxed on their worldwide income, with foreign tax credits available under applicable treaties.