Income tax is assessed on taxable income, which is the difference between gross income and allowed exemptions and deductions.
Professional participants who carry out activity on the Tajikistan stock exchange are exempt from 50% of income tax.
Inventory accounting for tax purposes follows inventory accounting for financial reporting purposes. Public companies are required to apply International Financial Reporting Standards (IFRS). Other legal entities may apply IFRS or National Accounting Standards.
For tax purposes, the first in first out (FIFO) and weighted average inventory methods are permitted.
In general, capital gains on securities are taxed as business profits.
An exemption is available for capital gains on the sale of securities on the Tajikistan stock exchange.
In general, dividends are subject to 12% income tax withheld at source. WHT exemption can only be applied to dividends paid as part of net income distribution to the government budget. Dividends taxed at source are not included in aggregate annual income.
In case dividends were not taxed at source, then such dividends should be included in annual aggregate income of a person receiving the dividends and taxed at the standard CIT rate.
The Tax Code defines interest income as any amount expressed in the form of interest, discounts, bonuses, and other funds, as well as remuneration for the use of money, paid simultaneously or periodically, including a penalty for failure to pay taxes on time. Interest income is subject to CIT in Tajikistan and should be included in annual aggregate income. Interest income paid to a non-resident is subject to 12% income tax withheld at source.
Interest paid by resident entities, except for credit financial institutions, to controlled foreign companies (CFCs) is subject to 18% WHT.
Royalty income received by a resident entity should be included in the aggregate annual income and taxed at the standard CIT rate.
Royalty income received by a non-resident from a Tajikistan source is subject to WHT at the rate of 15%.
Tajik residents are taxed on their worldwide income. Non-residents are subject to CIT in Tajikistan only on Tajikistan-source income. There are no provisions in the Tax Code for tax deferral.
For information about Controlled foreign company (CFC) provisions, see the Group taxation section.