According to research by the World Bank, Tajikistan has a convoluted tax administration structure and a significant tax burden on industrial businesses. In a piece written just for CABAR.asia, experts Manouchehra Madchonova and Merali Bodurshozoda predict that a new draft of the Republic of Tajikistan’s duty Code will soon be made available for public comment.
High taxes reduce the appeal of doing business
Like any other contemporary state, Tajikistan is required to carry out social obligations. This calls for large government spending, which comes from levy money. Therefore, on the one hand, the expansion of government spending necessitates the greatest degree of tax-based resource consolidation. Levies are always administrative-command measures of state management, even though they ultimately indicate the predominance of public interests. Accordingly, the degree of the business environment’s investment attractiveness, the taxpayers’ payment compliance, and the level of business economic activity stimulation should all be taken into account when evaluating the success of duty policy.
Paying income tax through your employer in Tajikistan
Many employers in this country will manage your duty obligations under the PAYE (pay-as-you-earn) system if you have a permanent contract there. In other words, they handle your levy preparation and calculation and send you a net wage.
This payment will cover your income duty, public health insurance, social security, and other deductions. Although this is the simplest approach to managing your income duty in Tajikistan, contractors could not be provided with this service due to their transient nature.
Organizing your income tax in Tajikistan
Anyone who le to pay their taxes through PAYE is left with the option of completing their outturn and handling everything themselves. How well-versed are you in Tadzhik Tax Law? Exists a tax treaty between Tajikistan and your country of residence? You must learn this information or locate a helpful person. This not only takes up your leisure time, You must learn this information or locate a helpful person. This not only takes up your free time but also makes it difficult to get the most out of the system. If you’re new to it, you can be working from outdated research and wind up paying too much because the rules change regularly. You must be placed in the appropriate tax brackets to avoid paying excessive income duty.
Using an umbrella company in Tajikistan for income tax
If they don’t find another solution, Tajik contractors will have to spend a lot of time and effort filing their tax returns. While you’re there, your Tadzhik umbrella firm can serve as your employer while yet giving you the freedom of an independent contractor. The only distinction is that you submit your timesheets to them, who will then figure out your taxes and pay them when you earn money, giving you a net wage (as well as documentation for your records). The businesses are specialists in taxation, and they’ll make sure you keep the majority of your revenue while abiding by local regulations. Any problems with the Tadzhik tax office or tax department can be resolved by them directly, including processing your tax refund if you are qualified.
Value-Added Tax (VAT)
On taxable turnover, which includes goods and services, VAT is often assessed. 15% is the typical VAT rate. If a taxpayer’s taxable turnover for the previous 12 months surpasses a threshold of TJS 1 million, both individuals and businesses must register as VAT payers.
The sale, transfer, or rental of real estate property, financial services, some medical services, and a few other goods and services are all generally free from the VAT under the Tax Code if they are not given in Tajikistan according to the place of supply criteria. Professional participants are also excluded from 50% of the VAT when they conduct business on the Tajik stock exchange. If the delivery conditions stipulate that products must be transported, the place of supply is chosen as the starting point for transportation. In other situations, the location of the supply of the items is established at the time of their transfer or when they are placed at the buyer’s disposal. Services are typically seen as being rendered at the service provider’s place of business or the actual location where they are performed. However, some services are regarded as being rendered at the buyer’s location. If input VAT exceeds assessed VAT, qualifying exporters are often eligible for a VAT refund.
