Discover employer and employee tax responsibilities in Turkmenistan
Employers have several tax responsibilities, including withholding income tax from employee wages and salaries, known as Pay-As-You-Earn (PAYE) withholding. In Turkmenistan, a flat 10% personal income tax (PIT) rate is used, and this applies to all employment income, including salaries, wages, bonuses, and benefits. PAYE deductions must generally be submitted to tax authorities on a monthly basis.
Employers also have responsibilities towards social security contributions. They must register with the social security system and contribute on behalf of their employees. The employer contribution rates appear to be around 20% of the total remuneration provided to local employees. Social security covers retirement, disability, and potentially other benefits. These contributions are typically paid monthly.
There are also other potential taxes that employers must be aware of. One of these is the Special Purpose Duty. Employers must withhold and pay a 5 manats (TMT) special purpose duty per month for each employee. This is to support the improvement of urban and rural territories.
In Turkmenistan, all employees earning income are subject to Personal Income Tax (PIT). The calculation method for this tax is a flat rate, with Turkmenistan maintaining a PIT rate of 10% of gross income.
In addition to the PIT, employees are also required to contribute a fixed 5 manats (TMT) special purpose duty per month. This contribution is designed to support the improvement and development of urban and rural areas.
Turkmenistan has a standard VAT rate of 15%, which applies to most goods and services. However, some services might be exempt from VAT. These potentially exempt services may include certain financial services and specific medical and educational services.
While a complete list of VAT-exempt services is difficult to obtain due to limited resources, some services that might be exempt include:
Businesses providing taxable services with a specific turnover threshold may be required to register for VAT with the tax authorities. VAT returns are generally filed on a monthly basis. VAT payments are generally due within a certain period after the end of the taxable month.
Tax incentives are a strategic tool used by governments to stimulate economic growth and development. In Turkmenistan, these incentives come in various forms and are designed to attract both local and foreign investments.
The eligibility for tax incentives in Turkmenistan is likely dependent on several factors:
While it's challenging to find reliable English-language resources detailing the application process for tax incentives in Turkmenistan, the process likely involves the following steps:
We're here to help you on your global hiring journey.