Tajikistan

In Tajikistan, employers shoulder several tax obligations for their employees and business operations.

Employer Tax Obligations in Tajikistan for 2025

Corporate Income Tax

• Standard Rate: 20% of corporate profits. However, companies involved in the production of commodities benefit from a reduced rate of 13%.
• For Financial Institutions and Mobile Companies: 20%
• Payment Schedule: Advance payments are due on the 15th of the month following the reporting month.

Value Added Tax (VAT)

• Standard Rate: 15% (as of January 2022). The reduced VAT rate is 5% for educational services and private healthcare and 7% for construction works, hotel and catering service.
• Exemptions: Imports and supply of specified goods and services may be exempt to encourage investment.

Social Security Contributions

• Employer Contribution: 20% of the employee's salary. This contribution covers social security benefits like pensions, healthcare, and unemployment.
• Employee Contribution: 2% of their salary.
• Additional Considerations: Social tax is also due on amounts paid to resident individuals for services rendered, excluding salaries.

Payroll Tax (Withholding)

• Personal Income Tax: Employers withhold personal income tax from employee salaries.
  • Residents: 12%
  • Non-Residents: 20%
• Other Income: For other income of residents and non-residents (not employment income): 15%.
• Payment Schedule: The withheld tax is due on the 15th of the month following the reporting month. For other income, it is due on April 1st of the following year.

Other Taxes

• Real Estate Tax: Paid quarterly by property owners, the rate varies from 3% to 18% of a calculated index based on the property's area and intended use, and territorial coefficients are also factored in.
• Vehicle Tax: Based on engine horsepower (or kWh for electric vehicles or pressure for jet engines). Rates range from 1% to 15% of the calculation index.

General Information on Employment in Tajikistan

• Payroll Frequency: Monthly
• Minimum Wage: 600 TJS per month (as of 2025 information)
• Standard Working Hours: 8 hours per day (6 hours per day for disabled employees)
• Overtime: Requires additional compensation.
• Annual Leave: 24 days (paid)
• Maternity Leave: 140 days (70 days before and 70 days after birth, paid)
• Paternity Leave: 10 calendar days (paid)
• Sick Leave: 3 days (paid)
• Termination Notice: Required; the duration depends on the reason for termination.

Please note that the information above is current as of February 5, 2025, and might be subject to changes in the future. It's essential to consult with local authorities or tax professionals for the most up-to-date information.

In Tajikistan, employee tax deductions primarily involve personal income tax and social tax, impacting both residents and non-residents working in the country.

Personal Income Tax (PIT)

• Tax Rate: A flat rate of 15% applies to employment income.
• Deductions: While certain deductions might exist for residents, non-residents generally do not qualify for deductions under the 15% flat rate. More information would be needed to determine any specific deductions available for resident employees.
• Tax Return and Payment: Annual tax returns, including an income tax calculation, must be filed by April 1st of the following year. The tax payment is due by April 10th of the following year.

Social Tax

• Employee Contribution: Employees contribute 2% of their salary towards social tax.
• Employer Contribution: Employers contribute an additional 20% of the employee's salary towards social tax. This includes pension contributions.

Other Considerations

• Tax Identification Numbers: Individuals and legal entities require a Taxpayer Identification Number (TIN) for tax reporting and financial transactions. Enterprises and individual entrepreneurs also receive a single identification number (SIN) upon registration. You can obtain your TIN through the official online service of the Tax Committee under the Government of the Republic of Tajikistan.
• Individual Entrepreneurs: Individuals earning income regularly must register as individual entrepreneurs. They pay personal income tax at a flat rate of 15% without deductions.
• Value Added Tax (VAT): While VAT is applied to most goods and services at a rate of 14%, financial services related to credits, deposits, currency circulation, settlements, and other debt obligations are exempt.
• Additional Taxes: Depending on an individual's income sources and activities, other taxes like real estate tax, vehicle tax, and excise tax may also apply.

This information is current as of February 5, 2025, and might be subject to change due to legislative updates or adjustments in tax regulations. For more detailed information, please consult the official Tax Committee of the Republic of Tajikistan or a qualified tax advisor.

In Tajikistan, the Value Added Tax (VAT) is a consumption tax levied on most goods and services.

VAT Rates

• Standard Rate: 14% (as of February 5, 2025. This rate is set to decrease to 13% on January 1, 2027).
• Reduced Rates:
  • 5% for domestically produced and processed agricultural products, educational services, and medical services at designated resorts and sanatoriums. Note: This is not creditable against output VAT.
  • 7% for construction work and hospitality/food services.

VAT Registration

• Threshold: Businesses and individuals whose taxable turnover surpasses 1 million Tajikistani Somoni (TJS) over 12 consecutive months must register for VAT. Voluntary registration is also possible if specific minimum asset requirements are met.
• Non-resident providers of electronic services to individuals in Tajikistan are also required to register, regardless of turnover.
• Registration Process: The registration process for non-residents providing e-services must be done within 30 days of beginning to offer those services. Registration can be done online through the Tax Committee.

VAT Filing and Payment

• Filing Frequency: Monthly for most businesses. Quarterly for foreign entities providing remote services to individuals.
• Deadlines:
  • Monthly filers: by the 15th day of the following month.
  • Quarterly filers: by the 20th day of the following month.
• Electronic Filing: Returns are typically filed electronically through the taxpayer's assigned electronic account.

Exempt Goods and Services

Several categories are generally exempt from VAT:

• Financial Services (loans, deposits, currency transactions)
• Real estate sales, transfers, and rentals
• Certain Medical services (details vary)
• Goods and services not supplied within Tajikistan based on place of supply rules.
• International freight and passenger transportation services

VAT on Digital Services

Foreign providers of electronic services (e.g., SaaS, online marketplaces, digital content) to Tajik individuals are subject to VAT. The operator of an electronic trading platform may act as a tax agent under certain conditions.

Penalties

Late or incorrect filing and payment may incur penalties and surcharges as detailed in the Code of Administrative Violations.

General Information about VAT in Tajikistan

Tajikistan adopted VAT in 2004 to enhance tax collection and compliance. The current VAT regulations prioritize electronic transactions and aim to align with international standards. Specific details might be available on the Tax Committee of the Republic of Tajikistan's official website or from a local tax advisor for the most up-to-date and personalized advice. This information is current as of February 5, 2025, and might change.

Tajikistan offers various tax incentives to attract investment and stimulate economic growth.

Corporate Tax Incentives

• Free Economic Zones (FEZs): Businesses operating within designated FEZs benefit from reduced taxes and customs fees. The five FEZs are Sughd, Panj, Ishkoshim, Dangara, and Kulyab. Minimum investment requirements apply, varying by business activity: USD 500,000 for manufacturing, USD 50,000 for trading, and USD 10,000 for consulting and services.
• Corporate Income Tax (CIT) Exemptions: Production companies may qualify for CIT exemptions based on investment levels:
  • Two-year exemption: USD 200,000 to USD 500,000 investment.
  • Three-year exemption: USD 500,000 to USD 2 million investment.
  • Four-year exemption: USD 2 million to USD 5 million investment.
  • Five-year exemption: Over USD 5 million investment.
• Tax Holidays for New Businesses: New businesses involved in goods production are exempt from CIT for a period of 2 to 5 years.
• Sector-Specific Incentives: Incentives are available for various sectors including hydropower construction, raw material imports for manufacturing, poultry and animal feed production, tourism, and securities market participants. Specific incentives vary by sector.

Individual Tax Incentives

• Tax Incentives for Women Entrepreneurs: Women entrepreneurs on maternity leave are granted tax incentives, including free business registration and patent tax exemption for home-based businesses.

Other Tax Incentives

• Foreign Tax Credit: Taxes paid outside Tajikistan may be credited against comparable taxes within the country, up to the Tajik tax liability on that income.

Tax Administration

Tajikistan's tax system has undergone reforms aimed at simplification and modernization. The number of taxes has been reduced and tax administration processes have been streamlined.

General Tax Information

Tajikistan has a multi-tiered tax system including corporate income tax, value-added tax (VAT), personal income tax, excise taxes, and taxes on natural resource use. Tax rates and regulations are subject to change, so it's advisable to consult the latest official resources for the most current information. This information is current as of February 5, 2025, and may not reflect future changes to Tajikistan's tax laws.