There are no rules permitting grouping for tax purposes in Tajikistan.
Starting from 1 January 2023, new transfer pricing rules will be in force in Tajikistan.
Transfer pricing rules impact the transactions or a series of transactions where all of the following conditions are met:
- if the purpose of the transaction is the supply or acquisition of property, services, handling of intangible or tangible assets, the allocation of loans;
- if the transaction is carried out between related parties;
- if the transaction is cross-border.
The principle of concluding a contract on market terms is applied if the income, expenses, profit or loss formed on the basis of a transfer pricing agreement of related parties differ from the income, expenses, profit or loss of unrelated persons formed in real market conditions.
If an entity does not determine the income, expenses, gains and losses arising under the transfer pricing agreement in accordance with the market conditions principle, the tax authority may make the necessary adjustments to ensure that the income, expenses, profits and losses arising under the transfer pricing agreement pricing, consistent with the principle of market conditions.
Interest deductibility is generally limited to three times the refinancing rate of the National Bank of Tajikistan (the refinancing rate is currently 13.25%).
If during the reporting period the ratio of the average loan of a resident under the control of a non-resident to the average authorized capital exceeds two times, the permitted deduction of interest to such a person for this period is limited.
For a company with more than 25% of the authorised capital (shares) directly or indirectly owned by non-residents or legal entities exempt from CIT, the maximum amount of interest for each loan used within a tax period that can be deducted shall be limited to the amount of interest not exceeding the maximum interest rate. The maximum interest rate is determined by dividing the interest rate on loans by the average authorised capital ratio. The average authorised capital ratio is calculated by dividing the outstanding debt at the end of the reporting period by the average value of the share of the non-resident entity in the authorised capital and dividing that by three.
Controlled foreign companies (CFCs)
If a resident's direct or indirect interest in a foreign legal entity located in a low-tax jurisdiction is more than 25% during a tax year, that resident's income for that year includes an amount calculated using the following formula:
where: A - percentage of a resident's share in a foreign legal entity; and
B - taxable profit of a foreign person for the year, reduced by any foreign tax or tax in Tajikistan paid by a foreign legal entity on taxable profit.
A legal entity is considered a resident of an offshore zone - a country with low tax rates, if one of the following conditions is met:
- the enterprise is established and registered in a country with a low level of taxation; or
- control and management of a legal entity is carried out from a country with low tax rates.