Cross-border electronic services provided by non-resident digital businesses to customers in Tajikistan are now subject to VAT at a rate of 18%. Obligations for compliance with these new VAT rules began on January 21, 2021 - only a month after the rules were signed into law by the President of The Republic of Tajikistan.
The Central Asian state has followed the path of neighbours Uzbekistan, and – from January 2022 – Kazakhstan as well as Azerbaijan in changing tax rules to account for the growing cross-border B2C sales of electronic services. Uzbekistan introduced its rules in January 2020 while Azerbaijan did so in January 2017.
The Tajikistan Tax Code establishes that the intended taxpayers will be “foreign entities who provide, directly or through intermediaries, electronic services to individuals, the place of sale of which is the territory of the Republic of Tajikistan.”
The end purchasers of the electronic services can be determined if any of the following conditions are met:
The relevant tax period is per calendar quarter with a filing deadline no later than the 10th day of the month following the expired reporting period, e.g. for Q2 the deadline is July 10.
According to the Tajikistan Tax Code, the following electronic services supplied by non-resident businesses will be affected by the new VAT rules. Note: this list while quite lengthy is not exhaustive.
Conversely, the Tajikistan Tax Code also names some electronic services that are not within the scope of the new VAT rules. These services include the following:
The President of The Republic of Tajikistan, Emomali Rahmon, signed the new law on December 17, 2020, and Article 2 of the Tax Code states that the law enters into force one month after its official publication. In this case, the rules were officially published on December 21, 2021, therefore the go-live date was January 21, 2021.
Acknowledgement: Thanks to Elvira Maratova, of GRATA International, for her help in researching this article.
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