TAX CODE OF THE REPUBLIC OF TAJIKISTAN

PART II. SPECIAL PART

SECTION V. CORPORATE PROFIT TAX
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CHAPTER 18. GENERAL PROVISIONS

Article 142. Taxpayers

1. Payers of the corporate profit tax (referred to hereinafter as the "profit tax") shall be resident and foreign enterprises.

2. Any foreign entity that is not an individual shall be treated as an enterprise for the purposes of this section if it cannot prove that it should be treated as an entity under joint ownership in accordance with Article 189 of this Code.

Article 143. Object of Taxation

1. The object of taxation for a resident enterprise shall be its profits. Profits shall be the positive difference between a taxpayer's gross income and deductions specified under Chapter 19 of this Code. For the purposes of this article gross income shall be defined in accordance with the provisions of Article 135 of this Code (including all receipts that lead to an increase in the net value of a taxpayer's assets, with the exception of receipts that are exempt from the profit tax. In this case property received as a contribution to authorized capital shall not be treated as income.).

2. The object of taxation for a foreign enterprise doing business in the Republic of Tajikistan through a permanent establishment shall be its profits from this business, that is, its gross income from sources in the Republic of Tajikistan related to the permanent establishment, less the deductions provided for under this Code for such income.

3. The types of gross income earned by a foreign enterprises, as specified in Article 164 of this Code, which are not related to its permanent establishment shall be subject to taxation at the source of payment without taking deductions, if the source of income is located in the Republic of Tajikistan.

4. In cases in which a foreign enterprise earns income from the sale or transfer of property not related to its permanent establishment in the Republic of Tajikistan, the object of taxation shall be its profits from this activity, that is, gross income of this type from sources in the Republic of Tajikistan for the calendar year, less the deductions provided for under this Code and applicable to this income for the period in question.

Article 144. Tax Rates

1. In consideration of items 2 and 3 of this article, profits of enterprises less losses sustained in accordance with the provisions of Article 160 of this Code, shall be subject to taxation at the rate of 25 percent.

2. The types of gross income of a foreign enterprise specified under item 3 of Article 143 of this Code shall be subject to taxation at the rates indicated in Article 164 of this Code.

3. In those cases specified under item 4 of Article 143 of this Code, the profits of a foreign enterprise shall be subject to taxation at the rate of 25 percent.

Article 145. Concessions

The following shall be exempt from the profit tax:

1) religious, charitable, budgetary, intergovernmental, and interstate (international) nonprofit organizations, with the exception of profits earned by them from commercial activity. Such organizations must maintain separate accounting records for their principal activity (activity that is exempt from the profit tax) and commercial activity;

2) unrequited transfers, property received free of charge, membership dues, donations, and grants received by nonprofit organizations;

3) the National Bank of Tajikistan and its institutions;

4) dividends earned by a resident enterprise from a resident enterprise;

5) enterprises at which the following circumstances exist simultaneously in the tax reporting year:

a) disabled persons account for at least 50 percent of the employees; and

b) at least 50 percent of the funds spent on labor compensation and other material remuneration, including in-kind payments, are spent on the needs of disabled persons;

6) new enterprises established in the manufacturing sphere, during the year of their state registration and starting with the year following their initial state registration, when their founders make investments in the following amounts to the authorized capital of these enterprises, taking into account the minimum investment amounts established by the legislation, for a period of:

- 2 years, if the investments are the equivalent of up to US$500,000;

- 3 years, if the investments are the equivalent of more than US$500,000 and up to US$2 million;

- 4 years, if the investments are the equivalent of more than US$2 million and up to US$5 million;

- 5 years, if the investments are in excess of the equivalent of US$5 million.

When calculating the amount of time (duration) for which a profit tax exemption (tax holiday) is granted in accordance with this item, subsequent re-registrations of an enterprise, a change in the enterprise's ownership, a change in its organizational-legal form, and other changes of this nature shall not be taken into consideration.

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