Turkmenistan

Corporate - Withholding taxes

Last reviewed - 14 August 2020

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:      
Azerbaijan 10 0/10 (10) 10
Armenia 5/15 (1) 10 10
Austria 15 10 10
Bahrain 10 0/10 (6) 10
Belarus 15 10 15
Belgium * 15 0/15 (2) 0
Czech Republic 10 0/10 (11) 10
China 5/10 (3) 0/10 (4) 10
Croatia 10 0/10 (6) 10
Estonia 10 10 10
Finland 5/15 (3) 10 10
France * 15 0/10 (5) 0
Georgia 10 0/10 (6) 10
Germany 5/15 (3) 10 10
Hungary 5/15 (3) 10 10
India 10 0/10 (6, 7) 10
Iran 10 0/10 (8) 5
Japan * 10 0/10 (8) 10
Kazakhstan 10 0/10 (6) 10
Kyrgyzstan 10 0/10 (6) 10
Latvia 5/10 (3) 10 10
Lithuania 5/10 (3) 10 10
Malaysia 10 0/10 (6) 10
Moldova 10 10 10
Pakistan 10 10 10
Romania 10 10 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 10 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) 10 10
United States * 0 15 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 by 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) which holds directly or indirectly 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; (iii) the interest is paid to the government of the other contracting state.