VAT and Sales Tax in Turkmenistan

Turkmenistan imposes a Value Added Tax (VAT) at a standard rate of 15%. Certain goods and services, including exports, are zero-rated. The registration threshold is TMT 1,000,000 in annual taxable turnover.

VAT Rates

Turkmenistan applies the following VAT rates:

• Standard Rate: 15% on most goods and services
• Zero Rate (0%): Exports and certain international services
• Exempt Supplies: Certain financial services, education, and healthcare

Registration Threshold

Businesses with annual taxable turnover exceeding TMT 1,000,000 are required to register for VAT. Voluntary registration is permitted for businesses below the threshold. Non-resident businesses supplying digital services may also require registration.

VAT Compliance

Filing

• VAT Returns: Quarterly, due by the 20th of the month following the quarter
• Electronic Filing: Mandatory for registered taxpayers
• Record Keeping: VAT records must be maintained for at least 5 years

Input VAT Recovery

Registered businesses can recover input VAT on purchases related to taxable supplies. Input VAT on exempt supplies and non-business expenses is not recoverable. Input VAT on capital goods may be recovered over multiple periods.

Reverse Charge

A reverse charge mechanism applies to certain cross-border services and imports, shifting the VAT liability from the foreign supplier to the domestic recipient.

Exports and Imports

Exports from Turkmenistan are zero-rated, allowing exporters to recover input VAT. Imports into Turkmenistan are subject to VAT at the standard rate, collected at customs along with any applicable customs duties.

Penalties

• Late registration: Fines
• Late filing: Penalties per month of delay
• Late payment: Interest charges
• Incorrect returns: Penalties based on understated tax