TAX CODE OF THE REPUBLIC OF TAJIKISTAN

PART II. SPECIAL PART

SECTION VI. GENERAL PROVISIONS CONCERNING THE PROFIT TAX AND INCOME TAX
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CHAPTER 20. WITHHOLDING OF TAX AT THE SOURCE OF PAYMENT

Article 161. Procedure for the Withholding of Tax at the Source of Payment

1. The following persons (tax agents) shall be required to withhold tax at sources of payment:

1) legal entities, as well as their separate subdivisions in those cases established by this Code, which make payments to individuals working for hire;

2) individuals who are individual entrepreneurs and who make payments to individuals working for them for hire;

3) individuals and legal entities who pay pensions, stipends, and benefits to other persons, with the exception of government pensions, stipends, and benefits;

4) resident legal entities that pay dividends to individuals and legal entities;

5) individuals and legal entities who pay interest to individuals and legal entities;

6) individuals and legal entities who make payments specified under Article 164 of this Code;

7) individuals and legal entities who pay winnings on bonds and lotteries and prizes (winnings, gifts) based on the results of contests and competitions.

2. An individual or legal entity who pays income shall be responsible for the withholding of taxes and their transfer to the budget. If taxes are not withheld, the person paying the income shall be required to pay to the budget at his own expense the amount of tax that was not withheld and any relevant penalties and interest.

3. Individuals and legal entities withholding (assessing) tax at the source of payment in accordance with item 1 of this article, including persons receiving funds for the payment of wages at banks and other financial and lending institutions performing certain types of banking operations, shall be required:

1) to transfer the taxes withheld (assessed), including the social tax in accordance with Chapter 35 of this Code, to the budget simultaneously with the receipt of the funds for the payment of wages, and in other cases, within five banking days after the end of the month in which the payments were made;

2) when paying wages, to provide the individuals earning the income with statements at their request, indicating their last name, initials, the amount and type of income, as well as the amount of tax withheld (if tax is being withheld);

3) within 30 days after the end of a tax year, to present to the tax authorities with which they are registered, on a mandatory basis, and also to send (present) to individuals and legal entities earning (who have earned) income in accordance with item 1 of this article, statements at their request within 10 days, indicating the taxpayer identification number, the person's name (last name, first name, and patronymic), the total amount of income and the total amount of tax withheld in the reporting year.

4. An employer who is not the principal employer of a taxpayer shall be required to withhold income tax from wages at the rate of 13 percent without applying the deductions provided for under Article 139 of this Code.

Article 162. Withholding of Tax on Dividends at the Source of Payment

1. Dividends paid by resident enterprises shall be subject to taxation at the source of payment at the rate of 12 percent, with the exception of dividends paid to resident enterprises.

2. Dividends that are taxable in accordance with item 1 of this article shall not be included in the recipient's gross income and shall not be subject to further taxation.

Article 163. Withholding of Tax on Interest at the Source of Payment

1. Interest paid by a resident or permanent establishment of a nonresident, or on behalf of such an establishment, shall be subject to taxation at the source of payment at the rate of 12 percent of the amount to be paid, if the income is received from a source in the Republic of Tajikistan in accordance with Article 34 of this Code, with the exception of the cases referred to in item 2 of this article.

2. Interest, including interest under financial leasing agreements, paid to resident banks, other resident financial and lending institutions (organizations), including resident micro-finance institutions, and resident leasing companies shall not be subject to taxation at the source of payment.

3. Interest that is taxable in accordance with item 1 of this article shall not be included in an individual recipient's gross income and shall not be subject to further taxation after being paid to said individual.

4. A resident legal entity whose profits are subject to taxation, in the event that interest is received that is subject to taxation in accordance with item 1 of this article, shall include in its gross income the full amount of interest income without deducting the tax that is withheld and shall have the right to a crediting of this tax withheld at the source of payment, provided that it has documents confirming the withholding of the tax at the source of payment.

Article 164. Withholding of Tax on Nonresidents' Income at the Source of Payment

1. A nonresident's income from a source in the Republic of Tajikistan, as defined in Article 34 of this Code, which is not related to a permanent establishment of this nonresident located on the territory of the Republic of Tajikistan, shall be subject to taxation at the source of payment as gross income, without taking deductions (with the exception of a deduction from the total amount payable to the nonresident including the value-added tax, equal to the value-added tax withheld from this total, in the event of taxation in accordance with Article 220 of this Code), at the rates specified in item 6 of this article.

2. Payment of income shall be understood to mean the transfer of money in cash or noncash forms, securities, goods, and other property, or the performance of work or the provision of services.

3. Payments made to nonresidents in accordance with item 1 of this article which are related to the delivery of goods under foreign trade transactions (related to the importation of goods) onto the territory of the Republic of Tajikistan shall not be subject to taxation at the source of payment.

4. Taxation of a nonresident's income at the source of payment shall be effected regardless of the disposition by the given nonresident of income earned in the Republic of Tajikistan in favor of third parties in the Republic of Tajikistan and/or its subdivisions in other states.

5. Tax on a nonresident's income from a source in the Republic of Tajikistan shall be withheld regardless of the form and location of the payment of the income.

6. In consideration of the provisions of this article, a nonresident's income from a source in the Republic of Tajikistan that is not related to a permanent establishment of the nonresident which is located on the territory of the Republic of Tajikistan, shall be subject to taxation at the source of payment as gross income without taking deductions (with the exception of a deduction from the total amount payable to the nonresident including the value-added tax, equal to the value-added tax withheld from this total, in the event of taxation in accordance with Article 220 of this Code), at the following rates:

1) dividends - in accordance with Article 162 of this Code;

2) interest - in accordance with Article 163 of this Code;

3) insurance premiums paid by a resident enterprise or resident individual entrepreneur in accordance with an insurance agreement or risk reinsurance agreement - at the rate of 4 percent;

4) payments made by a resident enterprise or resident individual entrepreneur for telecommunications or transportation services in the case of international communications or international shipments between the Republic of Tajikistan and other states, with the exception of payments for sea freight - at the rate of 4 percent, and payments for sea freight - at the rate of 6 percent;

5) income in the form of wages, as well as income specified under subitems 8), 17), 18), 19), 20), 21), 22), and 24) of item 8 of Article 34 of this Code, paid by a resident enterprise or resident individual entrepreneur - at the rate indicated in item 1 of Article 140 of this Code;

6) income defined under item 8 of Article 34 of this Code paid by a resident enterprise or resident individual entrepreneur, with the exception of income:

- referred to in subitems 1), 2), 3), 4), and 5) of this item;

- referred to in subitems 12), 13), and 26) of item 8 of Article 34 of this Code;

- from the sale or transfer of property referred to in subitem 11) of item 8 of Article 34 of this Code - at the rate of 15 percent.

7. For the purposes of this article, payments made by a permanent establishment of a nonresident in the Republic of Tajikistan or on behalf of such an establishment shall be treated as payments made by a resident enterprise.

Article 165. Submission of Tax Reporting on Withholding of Tax at the Source of Payment

Tax agents as defined under Article 161 of this Code shall be required once every six months, no later than the 15th of the month following the reporting half-year in which an obligation to withhold tax at the source of payment occurred, to submit to the tax authorities with they are registered a statement of the tax withheld at the source of payment, following the form and procedure established by the authorized government body.

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