LETTER OF THE MAIN STATE TAX SERVICE OF TURKMENISTAN AND MINISTRY OF FINANCE OF TURKMENISTAN

of February 16, 2010 No. 374/1

To the State Tax Services on welayats and Ashgabat

To head departments of finance of welayats and Ashgabat

The main State Tax Service of Turkmenistan and the Ministry of Finance of Turkmenistan, in connection with single questions on application of provisions of article 139 of the Tax Code of Turkmenistan concerning the tax discharge on property, report the following.

In case of determination of size of tax base for calculation of tax on property concerning the construction object which is not put into operation in accordance with the established procedure it is necessary to consider following provisions of the Tax code of Turkmenistan.

First of all it is necessary to pay attention that the specified property at the contractor began to join in the taxation object only with entry into force of part 4 of article 139 of the Tax Code of Turkmenistan in the edition changed by the Law of Turkmenistan of April 18, 2009 to No. 40-IV. In the given part of this Article, in particular it is specified that as a part of material current assets at the taxpayers performing accomplishment of installation and construction works the project cost of the construction which is not put into operation in accordance with the established procedure is considered.

Also we pay attention that the specified property only for the purpose of the taxation is considered in a way stated above. Therefore, as we understand, for the purposes of the taxation the rules of assessment applicable to assessment of material current assets shall be applied to such property.

As it is determined regarding 1 article 140 of the Tax Code of Turkmenistan concerning material current assets:

* tax base for the property tax is their annual average cost; and

* their cost is determined on the basis of accounting data and other documentary confirmed data on the taxation objects.

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