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TAX CODE OF THE REPUBLIC OF TAJIKISTAN SECTION VII. VALUE-ADDED TAX CHAPTER 32. PROCEDURE FOR ASSESSMENT AND PAYMENT OF THE TAX Article 224. Value-Added Tax Rates and Procedure for Calculating the Tax 1. The value-added tax rate shall be 20 percent of taxable turnover, with the exception of exports, and/or 20 percent of taxable imports. Taxable transactions referred to in Chapter 30 of this Code shall be taxed at the zero rate. 2. Taxable turnover shall consist of the total value of taxable transactions in the reporting period (both those taxed at a positive rate and those taxed at the zero rate). 3. The amount of tax assessed on taxable turnover shall be defined as the product of taxable turnover and the appropriate tax rate according to item 1 of this article. 4. The amount of tax assessed on taxable imports shall be defined as the product of taxable imports according to Article 210 of this Code and the appropriate tax rate according to item 1 of this article. 5. Assessment of the value-added tax shall mean the performance of actions specified under items 3 and/or 4 of this article. Article 225. Value-Added Tax Payable to the Budget on Taxable Turnover 1. The amount of value-added tax payable to the budget on taxable turnover for a reporting period in accordance with Article 217 of this Code shall be defined as the difference between the amount of tax assessed on taxable turnover in accordance with Article 224 of this Code, taking into account (adding in) the tax amount assessed in accordance with item 4 of Article 220 of this Code, and the tax amount to be credited in accordance with Article 226 of this Code. 2. In those cases specified under Article 209 of this Code, when the amount of VAT payable exceeds the amount actually shown by a taxpayer in the VAT return, the excess shall be treated as VAT that is payable for the reporting period in which an event referred to under Article 220 of this Code occurred, and it shall be added to the amount payable for the reporting period in accordance with item 1 of this article. Article 226. Value-Added Tax to be Credited when Determining Payments to the Budget 1. Except as otherwise provided by this article, the amount of value-added tax to be credited shall be the amount of tax payable (paid) by a taxpayer on the basis of VAT invoices presented to him, taking into account the timing of a taxable transaction involving: 1) the importation of goods during the reporting period pursuant to Article 221 of this Code; and 2) taxable transactions that entail deliveries of goods, the performance of work, or the provision of services and are treated as taking place in the reporting period pursuant to Article 217 of this Code. A crediting of the value-added tax shall be allowed only in the event that the goods, work, or services referred to under subitems 1) and 2) of this article are used or are supposed to be used for purposes of commercial activity by the taxpayer, even if these goods, work, or services are not included in production costs. In order to effect a crediting of value-added tax on imports of goods, the value-added tax must have actually been paid to the budget. 2. The amount of value-added tax that may be credited in accordance with item 1 of this article shall be: 1) the amount of tax payable to suppliers on the basis of invoices which are presented and in which the value-added tax is identified separately; 2) the amount of tax indicated in a freight customs declaration prepared in accordance with the customs legislation of the Republic of Tajikistan, which has been paid to the budget of the Republic of Tajikistan following the established procedure and is not refundable in accordance with the conditions of the customs regime; 3) the amount of tax to be included in a value-added tax return in accordance with Article 220 of this Code (reverse taxation); 4) the amount of tax indicated in a ticket issued for rail or air travel; 5) the amount of tax indicated in documents used by a supplier of municipal services, settlements for which are effected through banks. 3. The value-added tax that is payable to suppliers of goods imported into the Republic of Tajikistan, with respect to which a different export and import procedure applies in accordance with an international treaty, shall be credited following the procedure established by the Republic of Tajikistan government. 4. The value-added tax shall be credited in the same tax period in which goods (work, services) are received, following the procedure established under item 2 of this article. In the event that the value-added tax is assessed in accordance with Article 220 of this Code, the assessed tax shall be credited in the same tax period in which the transaction was completed. In the case of taxpayers referred to in item 9 of Article 217 of this Code, the value-added tax, taking into account the provisions of this article, shall be credited in the same tax period in which taxpayers actually made payment, that is, the time that a credit is applied shall be determined on a cash basis. 5. In cases of VAT that is payable (paid) by a taxpayer on the basis of VAT invoices presented to him for imports of goods and taxable transactions, which are intended in part for the taxpayer's commercial activity and in part for other purposes, the VAT shall be credited on the basis of the proportion of their use in commercial activity (if it is possible to determine the proportion of the earmarked use of goods (work, services) acquired through imports and under other taxable transactions directly within the tax period in which they were received). 6. The crediting of VAT that has been paid (is payable) shall not be allowed in the case of: 1) passenger cars, with the exception of those offered for sale or rent by a person for whom the sale or rental of automobiles is a principal commercial activity; 2) entertainment and hospitality expenses, expenditures on charitable activities or for other social purposes; 3) VAT invoices in which the VAT amount due on the given taxable transactions is not identified (not indicated) as a separate amount in accordance with Article 231 of this Code. 7. In the event that a taxpayer has taxable transactions and transactions that are exempt from the value-added tax, the VAT amount to be credited shall be the value-added tax figure determined in accordance with Article 228 of this Code. If a taxpayer has only exempt turnover, no crediting shall be allowed. Item 5 of this article shall apply before this item applies, taking into consideration the provisions of Article 227 of this Code. 8. In those cases described in Article 209 of this Code, when the VAT indicated in an invoice or in a VAT return exceeds the VAT payable by a taxpayer, the excess amount may be credited to the taxpayer (that is, the taxpayer's tax obligations may be reduced by the excess amount) for the reporting period in which the case referred to in item 1 of Article 209 of this Code occurred. Article 227. Adjustment of Value-Added Tax Amounts Applied as a Credit 1. Value-added tax that was previously applied as a credit shall be excluded from the subsequent amount of value-added tax to be taken as a credit in the following cases: 1) with regard to goods (work, services) used for purposes of noncommercial activity; 2) with regard to goods, including fixed assets, in the event of their damage or loss (with the exception of cases arising as a result of emergency situations). Damage or loss of goods as a result of emergency situations must be confirmed by a finding from the appropriate government agency for emergency situations, produced no later than 30 calendar days from the date of the occurrence of the emergency situations and presented to the appropriate tax authority within the same time limit; 3) in the case of failure to comply with the provisions established under Article 231 of this Code. 2. For the purposes of this Code damage to goods (property) shall mean a deterioration in all or certain qualities (properties) of the goods (property) as a result of which the given goods (property) cannot be used for purposes of taxable turnover. Loss of goods (property) shall be understood to mean an event as a result of which goods (property) are destroyed and/or lost. Loss of goods (property) sustained by a taxpayer within the limits of normal wear and tear established by regulatory legal acts of the Republic of Tajikistan shall not be considered loss in this context. 3. In the event of a change in the value of goods (work, services) received in those cases referred to under item 1 of Article 209 of this Code, a corresponding adjustment shall be made in the amount of value-added tax that was previously applied as a credit. 4. An adjustment in the amount of value-added tax applied as a credit shall be made in the same tax period in which the circumstances referred to in items 1 and 3 of this article occurred. Article 228. Procedure for Crediting Value-Added Tax Given Turnovers That Are Exempt from the Value-Added Tax (Exempt Turnovers) 1. The value-added tax that is payable to suppliers and on imports with respect to goods (work, services) used for purposes of exempt turnovers shall not be taken as a credit. 2. If there are both taxable and exempt turnovers, the value-added tax amount, determined using the proportional or separate method at the taxpayer's discretion, shall be applied as a credit. The chosen method for determining the amount of value-added tax to be applied as a credit may not be changed during a tax year. A taxpayer shall provide the respective tax authority with which it is registered as a payer of the VAT with written notification of the crediting method that has been chosen before the submission of the first VAT return. A taxpayer shall provide the respective tax authority with written notice of a planned change in the crediting method 15 calendar days before the beginning of a new tax year. Article 229. Proportional Method Under the proportional method, the amount of value-added tax to be applied as a credit shall be determined on the basis of the proportion of taxable turnover in total turnover. Article 230. Separate Method 1. When determining the amount of value-added tax to be applied as a credit under the separate method, a payer of the value-added tax shall maintain separate accounting records of expenditures and value-added tax paid on goods (work, services) used for purposes of taxable and exempt turnover. 2. In the case of expenditures for which it is not possible to break down the value-added tax on the basis of separate accounting, the amount of value-added tax to be applied as a credit shall be determined on the basis of the proportional method in accordance with Article 229 of this Code. Article 231. Value-Added Tax Invoices 1. Except as otherwise provided under item 5 of this article, a person who is registered as a payer of the value-added tax and who performs a taxable transaction shall be required as of the date his registration for VAT purposes enters into force to present a VAT invoice to the recipient of goods, work, or services. A person who is not registered for VAT purposes shall not have the right to present VAT invoices. 2. A VAT invoice shall be a document that serves as the grounds for applying VAT as a credit in accordance with Article 226 of this Code, which has been filled out according to the form established by the authorized government body and which contains the following information: 1) the name (last name, first name) of the taxpayer
and purchaser (customer), as well as the trading name of the
taxpayer if it is different from the legal name; 3) the number and date of issue of the certificate of registration for the VAT; 4) the name of the goods shipped, the work performed, or the services provided; 5) the amount of the taxable transaction; 6) the amount of excise tax on excisable goods; 7) the amount of VAT owed on the given taxable transaction; 8) the date of issue of the VAT invoice; 9) the ordinal number of the VAT invoice. An invoice shall be prepared (written up) in triplicate. The first copy of the prepared invoice shall be issued to the purchaser (recipient, customer) of the goods (work, services), the second shall remain in the accounting records of the taxpayer (the person who wrote up the VAT invoice), and the third copy shall be submitted to the appropriate tax authority together with the VAT return. The preparation (writing up) of a VAT invoice shall be recorded in a ledger for recording VAT invoices written up and received by a taxpayer. The form of this ledger and the procedure for maintaining it shall be determined by the authorized government body. 3. A taxpayer shall be required to present a VAT invoice to a purchaser of goods (customer for whom work, services are performed) at the time of delivery or not more than five days after delivery. A VAT invoice shall be certified by the signatures of the manager and chief accountant of the supplier or by other duly authorized officials of the supplier. 4. Except as otherwise provided under this item, the size of a taxable transaction shall be indicated separately in an invoice for each type of goods (work, services). The total size of a taxable transaction may be indicated if a document is attached to the invoice which contains a list of the goods (work, services) delivered. In this case the invoice must contain a reference to the number and date of the attached document, as well as the name of the document. 5. VAT invoices shall be written up only when taxable transactions are performed. If the delivery of goods and the performance of work and/or provision of services are exempt from the VAT in accordance with the provisions of this section, no VAT tax invoices shall be written up. 6. A VAT invoice for export transactions must include: 1) a notation indicating that the invoice pertains
to an export transaction; 7. Preparation of an invoice shall not be required in the following cases: 1) settlements for municipal services and communications services provided to the public, which are effected through banks using primary documents that serve as the basis for accounting records; 2) passenger travel in which tickets are issued; 3) when goods (work, services) are provided which are exempt from the value-added tax. 8. In the case of retail deliveries of goods and the performance of work or provision of services to purchasers who are not payers of the VAT, a receipt or simplified invoice may be issued in place of a VAT invoice, following the form established by the authorized government body, or a receipt from a cash register with fiscal memory may be issued. 9. An instruction on the procedure for the writing up and presentation of invoices (for the VAT and excise taxes) shall be issued by the authorized government body. Article 232. Preparation of Supplemental Invoices in the Event of an Adjustment in Taxable Turnover 1. In the event of an adjustment in the size of taxable turnover, a supplemental invoice shall be prepared, which shall indicate: 1) the ordinal number and date of preparation of the supplemental invoice; 2) the ordinal number and date of preparation of the invoice for which the supplemental invoice is being prepared (to which it applies); 3) the name, address, and TIN of the supplier and recipient of the goods (work, services); 4) the size of the adjustment in taxable turnover, not including the value-added tax; 5) the amount of value-added tax. 2. A supplemental invoice shall be prepared by the supplier of the goods (work, services) and shall be confirmed by the recipient of said goods (work, services). Article 233. Special Rules Determination of the amount of VAT payable in the case of gambling, lotteries, services provided by travel agents, consignment sales, sales of second-hand (used) goods, and other types of activities in which direct determination of the tax base and other aspects of taxation on the basis of the general rules is difficult, shall be performed following the procedure established by the Republic of Tajikistan government.
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