The agreement between the Kyrgyz Republic and the Republic of Tajikistan on the principles of collection of indirect taxes during the exporting and commodity import (works, services)

of May 6, 1998

The Kyrgyz Republic and the Republic of Tajikistan, the hereinafter referred to as Contracting Parties, aiming at further deepening of integration of economy, creation of equal opportunities for business entities and to establishment of conditions for fair competition, being guided by the commonly accepted regulations and rules of international trade,

agreed as follows:

Article 1 General determinations

For the purpose of this agreement:

a) the term "indirect taxes" means the value added tax and the excise tax;

b) the term "zero rate" means taxation on value added at the rate zero percent that is equivalent to full relief from the value added tax;

c) the term "principle of destination" means application of zero rate when exporting from customs area of one Contracting Party and taxation on effective rate, and also the established internal procedure imported (or imported) goods (works, services);

d) the term "competent authorities" means the Ministries of Finance of Contracting Parties.

The article 2 Principle of Collection when exporting

1. One Contracting Party will not assess with indirect taxes goods (works, services) exported to other Contracting Party.

2. The rule of Item 1 of this Article, concerning the value added tax, means application of zero rate according to the principle of destination.

The article 3 Principle of Collection when importing

1. The goods imported on the territory of one Contracting Party (work, service) which are exported from the territory of other Contracting Party are assessed with indirect taxes in the country of the importer according to its legislation. Taxation will be performed by the customs authorities or bodies determined by the national legal system in case of commodity importation on customs area of this Contracting Party.

2. The value added tax on imported goods is levied from customs value of goods.

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