TURKMENISTAN: FEES AND TAXES LEVIED ON IMPORTED

UNCLAS SECTION 01 OF 02 ASHGABAT 000967

SIPDIS

STATE FOR SCA/CEN; EEB


E.O. 12958: N/A
TAGS: ETRD PGOV ECON TX
SUBJECT: TURKMENISTAN: FEES AND TAXES LEVIED ON IMPORTED
COMPUTER EQUIPMENT


1. SUMMARY: The legislation of Turkmenistan does not
provide for levying Customs duties on computer equipment
imported into Turkmenistan. However, complicated procedures
for getting Customs clearance and a local tax system that
differentiates between types of businesses create numerous
obstacles for importers of computer equipment. Post
obtained detailed information about procedures and fees
for importing computer equipment from officials of the State
Customs Service, State Tax Service, and State Standards
Inspectorate. END SUMMARY.


2. Importers of computer equipment into Turkmenistan do
not have to pay Customs duties, but the simplicity ends at
this point and more complicated issues begin. Local laws
specify that the approval process and level of taxation differ
for businesses depending on their legal status. Commercial
importers are divided into three categories for the purpose of
levying Customs fees and taxes.


3. One category includes individual entrepreneurs who
are considered by the legislation as physical entities and
have a Government-issued patent authorizing them to conduct
their business activities. Individual entrepreneurs pay a 2%
Customs fee when importing computer equipment and a five-manat
($1.76) admin fee for every hour that a Customs officer spends
inspecting the equipment. All documents submitted to the
Customs should have Turkmen translation made or certified by
the State Chamber of Commerce and Industry. The
translation/certification price is 11.5 manats ($4) per page.
Also, individual entrepreneurs are required to certify the
imported equipment through the Main State Standards
Inspectorate before getting Customs clearance. The
Inspectorate levies a certification fee, the amount of which
depends on the cost of laboratory testing of the equipment and
the amount of imported equipment. As for taxes, individual
entrepreneurs selling computer equipment pay a monthly patent
fee in the amount of 60 manats ($21) and a 2% monthly profit
tax.


4. Another category is local firms that are considered
legal entities in Turkmenistan. They pay a 0.2% Customs fee
when importing computer equipment and the same five-manat
($1.76) admin fee for every hour that a Customs officer spends
inspecting the equipment. Local firms are also required to
certify the imported equipment through the State Standards
Inspectorate before getting Customs clearance, and the
certification fee is calculated using the same principle as
for individual entrepreneurs. They also should provide
Turkmen translation of each document made or certified by the
State Chamber of Commerce and Industry. Local firms pay a 2%
profit tax, and 1% fee deducted from the taxable profit, as
well as 3% contribution to the agriculture development fund
and 0.5% contribution to the city development fund deducted
from the pretax profit.


5. The third category includes foreign firms operating
in Turkmenistan, which follow the same Customs procedures when
importing computer equipment as local businesses, but pay more
taxes. They pay 15% VAT, 8% profit tax, 1% property tax and
1% fee deducted from the taxable profit, as well as 3%
contribution to the agriculture development fund and 0.5%
contribution to the city development fund deducted from the
pretax profit.


6. COMMENT: Customs and tax regulations in the
computer equipment business, as in any business in
Turkmenistan, favor low-profile and local players. As a
result, no foreign companies that produce computer equipment
have an office in Turkmenistan. Those computer producers that
sell their products in Turkmenistan operate through local
distributors and dealers. END COMMENT.

ASHGABAT 00000967 002 OF 002



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