Turkmenistan

Corporate - Withholding taxes

Last reviewed - 01 August 2022

Turkmenistan-source income generated by a foreign legal entity that has no PE in Turkmenistan generally is subject to WHT at the source of payment at 15% (6% for income from the lease of sea vessels and aircraft).

Relief may be available for WHT if a foreign entity is a resident of a country that has a valid DTT with Turkmenistan and if the foreign entity complies with certain administrative procedures.

Turkmenistan is a successor to a number of DTTs concluded by the USSR, while some treaties were concluded and ratified by the government of Turkmenistan. The countries listed below are considered to have valid tax treaties with Turkmenistan:

Recipient WHT (%)
Dividends Interest Royalties
Non-treaty 15 15 15
Treaty:      
Armenia 5/15 (1) 10 10
Austria 15 0/10 (17) 10
Azerbaijan 10 0/10 (10) 10
Bahrain 10 0/10 (6) 10
Belarus 15 0/10 (6) 15
Belgium * 15 0/15 (2) 0
China 5/10 (3) 0/10 (4) 10
Croatia 10 0/10 (6) 10
Czech Republic 10 0/10 (11) 10
Estonia 10 0/10 (6) 10
Finland 5/15 (3) 0/10 (4) 10
France * 15 0/10 (5) 0
Georgia 10 0/10 (6) 10
Germany 5/15 (3) 0/10 (15) 10
Hungary 5/15 (3) 0/10 (16) 10
India 10 0/10 (6, 7) 10
Iran 10 0/10 (8) 5
Japan * 15 0/10 (8) 10
Kazakhstan 10 0/10 (6) 10
Kyrgyzstan 10 0/10 (6) 10
Latvia 5/10 (3) 0/10 (11) 10
Lithuania 5/10 (3) 0/10 (11) 10
Malaysia 10 0/10 (6) 10
Moldova 10 0/10 (6) 10
Pakistan 10 10 10
Romania 10 0/10 (18) 15
Russia 10 5 5
Saudi Arabia 10 0/10 (12) 10
Singapore 0/10 (13) 0/10 (14) 10
Slovakia 10 0/10 (6) 10
South Korea 10 0/10 (19) 10
Switzerland 5/15 (3) 10 10
Tajikistan 10 0/10 (6) 10
Turkey 10 0/10 (6) 10
Ukraine 10 0/10 (6) 10
United Arab Emirates 0 0 10
United Kingdom 5/15 (3) 0/10 (6) 10
United States * 15 0 0
Uzbekistan 10 0/10 (9) 10

* USSR treaties honoured by Turkmenistan.

Notes

  1. 5% where the beneficial owner holds at least 25% of the authorised capital of the company paying the dividends.
  2. 0% where one of the following conditions is met: (i) interest paid to the government of the other contracting state or interest paid in respect of a loan guaranteed by that other state or by an institution authorised by that state; (ii) interest from commercial debt-claims relating to instalment payments for supplying merchandise, goods, or services; (iii) interest on loans, not represented by bearer instruments, from banks; or (iv) interest on cash deposits, not represented by bearer instruments, with banks, including public credit institutions.
  3. 5% where the beneficial owner is a company (other than a partnership) that directly holds at least 25% of the capital of the company paying the dividends.
  4. Interest arising in a contracting state and paid to, or on loans guaranteed or insured by, the government or a local authority thereof, the Central Bank, or any financial institution wholly owned by the government of the other contracting state, shall be exempt from tax in the first-mentioned state.
  5. Interest on bank credits and loans and interest on commercial credits arising from sources located in one of the states and received by a resident of the other state shall not be taxable in the first state.
  6. 0% where interest is paid to the government, Central Bank, or National Bank of the contracting states.
  7. 0% where interest is paid by the government, a political sub-division, or a local authority of the other contracting state.
  8. Interest paid by the government, ministries, other governmental institutions, municipalities, Central Bank, and other banks wholly owned by the government of the other contracting state shall be exempt from tax.
  9. 0% where the recipients of the interest are governments of contracting states or any governmental body, as well as the Central Banks ('the bank of banks' of a contracting state), a state export or import credit underwriting organisation, or another similar organisation to which, in accordance with the law of a contracting state, the relevant rights were delegated.
  10. Interest arising in Turkmenistan and paid to the government of Azerbaijan, a local authority, or The Central Bank or The State Oil Fund of Azerbaijan shall be exempt from tax in Turkmenistan. Interest arising in Azerbaijan and paid to the government of Turkmenistan, a local authority, or The Central Bank of Turkmenistan shall be exempt from tax in Azerbaijan.
  11. Interest arising in a contracting state and beneficially owned by a resident of the other contracting state if such interest is paid to, or loans or credits guaranteed by, the government of the other contracting state, including any administrative-territorial subdivision or local authority thereof, the Central Bank of the other contracting state, or any institution owned or controlled by that government shall be taxable only in that other state.
  12. Interest paid to the government, Central Bank, or to any financial institution wholly owned by the government of the other contracting state shall be exempt from tax.
  13. 0% where the beneficial owner is a company (other than a partnership) that directly or indirectly holds at least 25% of the capital of the company paying the dividends. Dividends arising in a contracting state and paid to the government of the other contracting state shall be exempt from tax in the first-mentioned state.
  14. Interest arising in a contracting state and paid to a resident of the other contracting state shall be exempt from tax in the first-mentioned state if one of the following conditions is met: (i) the payer of the interest is the government of the first-mentioned state, (ii) the interest is derived from loans guaranteed by the government of the first-mentioned state, or (iii) the interest is paid to the government of the other contracting state.
  15. Interest arising in the Federal Republic of Germany and paid to the Government of Turkmenistan, the Central Bank of Turkmenistan, or the State Bank for Foreign Economic Affairs of Turkmenistan shall be exempt from German tax. Interest arising in Turkmenistan and paid in consideration of a loan guaranteed by the Federal Republic of Germany in respect of exports or foreign direct investments, or paid to the Government of the Federal Republic of Germany, Deutsche Bundesbank, the Kreditanstalt für Wiederaufbau or the DEG — Deutsche Investitions- und Entwicklungsgesellschaft mbH shall be exempt from Turkmen tax.

    Interest shall be taxable only in the contracting state of which the recipient is a resident if the recipient is the beneficial owner of the interest and the interest is paid: (i) in connection with the sale of industrial, commercial or scientific equipment on credit, or (ii) in connection with the sale of goods by an enterprise to another enterprise on credit.

  16. Interest arising in a contracting state, derived and beneficially owned by the other contracting state, including its local authorities, the Central Bank or any financial institution wholly owned by that contracting state, shall be exempt from tax in the first-mentioned state.
  17. Interest shall be taxable only in the Contracting State of which the recipient is a resident if the beneficial owner of the interest is a resident of that State, and one of the following conditions is met: (i) is that State or the central bank, an administrative-territorial subdivision or local authority thereof; (ii) if the interest is paid by the State in which the interest arises or by an administrative-territorial subdivision, a local authority or statutory body thereof; (iii) if the interest is paid in respect of a loan, debt-claim or credit that is owed to, or made, provided, guaranteed or insured by, that State or an administrative-territorial subdivision, local authority or export financing agency thereof.
  18. Interest arising in a contracting state shall be exempt from tax in that state if it is derived and beneficially owned by the government of the other contracting state, a local authority or an administrative - territorial unit thereof or any agency or bank unit or institution of that government, a local authority or an administrative - territorial unit or if the debt-claims of a resident of the other contracting state are warranted, insured or directly or indirectly financed by a financial institution wholly owned by the government of the other contracting state.
  19. Interest arising in a contracting state and derived by the government of the other contracting state, including administrative-territorial subdivisions and local authorities thereof, the Central Bank of that other contracting state or any financial institution performing functions of a governmental nature, shall be exempt from tax in the first-mentioned state. Interest paid in connection with the sale on credit of any industrial, commercial or scientific equipment, or paid in connection with the sale on credit of any merchandise by one enterprise to another enterprise shall be taxable only in the contracting state of which the recipient is a resident if such recipient is the beneficial owner of the interest.