Identifier
Created
Classification
Origin
08ASHGABAT1508
2008-11-21 08:38:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
DELOITTE TAX NOT YET REGISTERED, BUT CONFIDENT
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C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001508
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: DECL: 11/21/2018
TAGS: PGOV EFIN EPET ETRD KTIA TX
SUBJECT: DELOITTE TAX NOT YET REGISTERED, BUT CONFIDENT
ABOUT FUTURE IN TURKMENISTAN
Classified By: Charge d'Affaires a.i. Richard Miles for reasons 1.4 (B)
and (D).
C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001508
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: DECL: 11/21/2018
TAGS: PGOV EFIN EPET ETRD KTIA TX
SUBJECT: DELOITTE TAX NOT YET REGISTERED, BUT CONFIDENT
ABOUT FUTURE IN TURKMENISTAN
Classified By: Charge d'Affaires a.i. Richard Miles for reasons 1.4 (B)
and (D).
1. (C) SUMMARY: Deloitte Tax LLP is working on registering
an office in Ashgabat in order to be where its cutomers are.
Company representatives describe plans to set up the office
as "cautiously optimistic." Deloitte delayed registration
for some time because of bureaucratic requirements, including
the government's requirement for 51 percent of the company to
be held locally. Company representatives said the lack of a
successor treaty to the Convention with the Union of Soviet
Socialist Republics on Matters of Taxation is a hindrance for
American companies that are considering opening an office.
Deputy Chairman of Oil and Gas Tachberdi Tagiyev told
Deloitte officials that the need for international auditors
in Turkmenistan in a private meeting on the fringes of the
oil and gas conference held in London in April. END SUMMARY.
PLANS IN TURKMENISTAN, AND SOME OBSERVATIONS
2. (C) The Amcit International Tax Partner from Deloitte Tax
in Almaty told econoff November 18 that the company expects
to receive registration in Turkmenistan in early 2009. A
government requirement that 51 percent of the company must be
Turkmen-owned has delayed its registration as a joint
venture. The company also needs to procure an audit license
and other licenses as well -- all documents that are not easy
to obtain and which the company would rather avoid having to
get, if possible. Deloitte representatives acknowledged that
companies with an internationally-recognized name receive
registration faster because of Turkmenistan's great desire
for international recognition. To illustrate this point,
they added that Deputy Chairman for Oil and Gas Tachberdi
Tagiyev mentioned the need for independent auditors in a
private, 20-minute meeting held on the fringes of the oil and
gas conference held April 17-18 in London. He added that
international law firms such as Bricewell Giuliani,
Chadbourne and Park, and Dewey & LeBoeuf are interested in
opening offices in Ashgabat, as well as
PricewaterhouseCoopers.
WHY DELOITTE IS OPENING AN OFFICE IN ASHGABAT: CUSTOMER BASE
3. (C) Deloitte wants an office in Ashgabat because it needs
to have offices where the customers are. Company
representatives describe their plans to open an office as
"cautiously optimistic." The company's current clients in
Turkmenistan -- which the Almaty office will officially
process until registration is completed -- include Chevron,
ConocoPhilips, Schlumberger, Transocean, Parker Drilling,
Baker & Hughes, and Oriflame. The Deloitte team, including
Partner in Charge of Tax and Legal Issues for the Caspian
Region Vladimir Kononenko, plans to meet with representatives
from Lukoil, BP, Petronas, and Kazmunaigaz during the
Turkmenistan Oil and Gas show, November 19-21.
DELOITTE'S CONCERNS AND SUGGESTIONS
4. (C) The Deloitte representatives asked about progress on
a successor treaty to the Convention with the Union of Soviet
Socialist /Republics on Matters of Taxation, because
companies which are considering opening up offices have
discussed this issue and the disadvantages the lack of a
current dual tax treaty poses. They also suggested:
-- Establishment of working groups for taxes and other
business issues. After registration is complete, Deloitte
will hold quarterly roundtables for finance directors which
will serve a similar function.
-- Pushing for changes to the Tax Code and other related
codes such as the Customs Code. They stressed that it would
be important that reform go beyond the decree level, but
ASHGABAT 00001508 002 OF 002
continue on towards reworking codes with an eye towards
increasing transparency.
-- Holding a road show for U.S. companies that would
introduce them to Turkmenistan, citing a successful program
organized for Australian companies. Deloitte is willing to
give presentations at such an event.
5. (C) COMMENT: Deloitte appears to feel quite confident
about its future in Turkmenistan and its ability to build on
its current customer base. However, it will be interesting
to see how long the registration process takes and if the
company is put in the "internationally-recognized" class. We
agree with Tagiyev that there is a need for independent
auditors in Turkmenistan. END COMMENT.
MILES
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: DECL: 11/21/2018
TAGS: PGOV EFIN EPET ETRD KTIA TX
SUBJECT: DELOITTE TAX NOT YET REGISTERED, BUT CONFIDENT
ABOUT FUTURE IN TURKMENISTAN
Classified By: Charge d'Affaires a.i. Richard Miles for reasons 1.4 (B)
and (D).
1. (C) SUMMARY: Deloitte Tax LLP is working on registering
an office in Ashgabat in order to be where its cutomers are.
Company representatives describe plans to set up the office
as "cautiously optimistic." Deloitte delayed registration
for some time because of bureaucratic requirements, including
the government's requirement for 51 percent of the company to
be held locally. Company representatives said the lack of a
successor treaty to the Convention with the Union of Soviet
Socialist Republics on Matters of Taxation is a hindrance for
American companies that are considering opening an office.
Deputy Chairman of Oil and Gas Tachberdi Tagiyev told
Deloitte officials that the need for international auditors
in Turkmenistan in a private meeting on the fringes of the
oil and gas conference held in London in April. END SUMMARY.
PLANS IN TURKMENISTAN, AND SOME OBSERVATIONS
2. (C) The Amcit International Tax Partner from Deloitte Tax
in Almaty told econoff November 18 that the company expects
to receive registration in Turkmenistan in early 2009. A
government requirement that 51 percent of the company must be
Turkmen-owned has delayed its registration as a joint
venture. The company also needs to procure an audit license
and other licenses as well -- all documents that are not easy
to obtain and which the company would rather avoid having to
get, if possible. Deloitte representatives acknowledged that
companies with an internationally-recognized name receive
registration faster because of Turkmenistan's great desire
for international recognition. To illustrate this point,
they added that Deputy Chairman for Oil and Gas Tachberdi
Tagiyev mentioned the need for independent auditors in a
private, 20-minute meeting held on the fringes of the oil and
gas conference held April 17-18 in London. He added that
international law firms such as Bricewell Giuliani,
Chadbourne and Park, and Dewey & LeBoeuf are interested in
opening offices in Ashgabat, as well as
PricewaterhouseCoopers.
WHY DELOITTE IS OPENING AN OFFICE IN ASHGABAT: CUSTOMER BASE
3. (C) Deloitte wants an office in Ashgabat because it needs
to have offices where the customers are. Company
representatives describe their plans to open an office as
"cautiously optimistic." The company's current clients in
Turkmenistan -- which the Almaty office will officially
process until registration is completed -- include Chevron,
ConocoPhilips, Schlumberger, Transocean, Parker Drilling,
Baker & Hughes, and Oriflame. The Deloitte team, including
Partner in Charge of Tax and Legal Issues for the Caspian
Region Vladimir Kononenko, plans to meet with representatives
from Lukoil, BP, Petronas, and Kazmunaigaz during the
Turkmenistan Oil and Gas show, November 19-21.
DELOITTE'S CONCERNS AND SUGGESTIONS
4. (C) The Deloitte representatives asked about progress on
a successor treaty to the Convention with the Union of Soviet
Socialist /Republics on Matters of Taxation, because
companies which are considering opening up offices have
discussed this issue and the disadvantages the lack of a
current dual tax treaty poses. They also suggested:
-- Establishment of working groups for taxes and other
business issues. After registration is complete, Deloitte
will hold quarterly roundtables for finance directors which
will serve a similar function.
-- Pushing for changes to the Tax Code and other related
codes such as the Customs Code. They stressed that it would
be important that reform go beyond the decree level, but
ASHGABAT 00001508 002 OF 002
continue on towards reworking codes with an eye towards
increasing transparency.
-- Holding a road show for U.S. companies that would
introduce them to Turkmenistan, citing a successful program
organized for Australian companies. Deloitte is willing to
give presentations at such an event.
5. (C) COMMENT: Deloitte appears to feel quite confident
about its future in Turkmenistan and its ability to build on
its current customer base. However, it will be interesting
to see how long the registration process takes and if the
company is put in the "internationally-recognized" class. We
agree with Tagiyev that there is a need for independent
auditors in Turkmenistan. END COMMENT.
MILES