www.pwc.com Doing Business Guide Turkmenistan 2012 - 2013 DOING BUSINESS GUIDE TURKMENISTAN 2011 - 2012 Guide to doing business and investment in Turkmenistan 2010 Edition The information in this book isbased on tax law and legislative proposals . It is intended to provide a general guide only on the subject matter and is necessarily in a condensed form. It should not be regarded as a basis for ascertaining the tax liability in specific circumstances. Professional advice should always be taken before acting on any information in the booklet. PwC DOING BUSINESS GUIDE TURKMENISTAN 2011 - 2012 Contents 1 Turkmenistan profile and investment climate..........................................................................................................................1 1.1 Introduction .......................................................................................................................................................................................................................1 1.2 Government structure and legal system ..............................................................................................................................................................2 1.3 People....................................................................................................................................................................................................................................4 1.4 Economy...............................................................................................................................................................................................................................4 2 Foreign investment............................................................................................................................................................................7 2.1 Foreign investment.........................................................................................................................................................................................................7 3 Banking, Finance and Insurance................................................................................................................................................. 10 3.1 Banking system..............................................................................................................................................................................................................10 3.2 Capital Markets..............................................................................................................................................................................................................10 4 Importing and Exporting .............................................................................................................................................................. 11 4.1 Trends in customs policy..........................................................................................................................................................................................11 4.2 Foreign Trade Zones ...................................................................................................................................................................................................11 5 Business entities.............................................................................................................................................................................. 12 5.1 Forms of business entities........................................................................................................................................................................................12 5.2 Registration requirements.......................................................................................................................................................................................13 6 Labour relations and social security ......................................................................................................................................... 14 6.1 Labour market................................................................................................................................................................................................................14 6.2 Working Conditions.....................................................................................................................................................................................................14 6.3 Foreign Personnel ........................................................................................................................................................................................................15 6.4 Social security.................................................................................................................................................................................................................15 7 Accounting and Audit requirements......................................................................................................................................... 16 7.1 Accounting .......................................................................................................................................................................................................................16 8 Tax System and Administration ................................................................................................................................................. 18 8.1 Tax system .......................................................................................................................................................................................................................18 8.2 Principal Taxes...............................................................................................................................................................................................................18 8.3 Tax Treaties.....................................................................................................................................................................................................................18 8.4 Tax Returns and payments ......................................................................................................................................................................................18 8.5 Assessments....................................................................................................................................................................................................................18 8.6 Appeals ..............................................................................................................................................................................................................................19 8.7 Withholding Taxes .......................................................................................................................................................................................................19 8.8 Tax audits .........................................................................................................................................................................................................................20 8.9 Penalties............................................................................................................................................................................................................................20 9 Taxation of corporations............................................................................................................................................................... 22 9.1 Corporate tax system..................................................................................................................................................................................................22 9.2 Taxable Income..............................................................................................................................................................................................................22 9.3 Deductibility of expenses..........................................................................................................................................................................................23 9.4 Related party transactions.......................................................................................................................................................................................23 9.5 Tax Computations.........................................................................................................................................................................................................23 9.6 Other Taxes......................................................................................................................................................................................................................24 9.7 Taxation under Petroleum Law.............................................................................................................................................................................25 10 Taxation of individuals ..............................................................................................................................................................