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Publications / Foreign Electronic E-service providers
Foreign Electronic E-service providers

How can foreign persons officially pay taxes for directly providing electronic services to individuals in Tajikistan?

With the demand for staying connected to the international sources of information, services, internet, network, technology, Tajikistan has implemented ways to make it more accessible for businesses providing electronic services, to operate in Tajikistan, with consideration of legitimate formalities that are to be met by such businesses.

Recent amendments to the tax legislation were made as per payment of the value-added tax (VAT) to the state budget, which grants an advantage for businesses to comply with the law and provide their electronic services without the actual presence in the country. The electronic services include - internet, computer games, layout advertising services, layout offers for purchase of goods and services, provision of usage of electronic books (E-books) and other electronic publications.

Foreign companies that provide electronic services to individuals of the Republic of Tajikistan are obligated to register within the Tax Committee under the established order. There are several general steps that foreign companies directly, or through a tax and legal consultants, must follow to fulfil the duty of paying the VAT to the state. As such, the following steps need to be confirmed.

1. The first step for a foreign company providing electronic service for individuals in Tajikistan is to register online within the Tax Committee, after which a "Taxpayer Office" will be created. Through the "Taxpayer Office," the Tax Committee may request additional documents connected to the provision of electronic services, as well as permit foreign companies to upload the declarations to implement the payments.

2. The next step requires executing an Application form for registration as VAT payers. The Application consists of the general information about the taxpayer(non-resident), about the liabilities of the taxpayer and others.

3. The further step is to file the Declaration. The Declaration consists of four parts. Part I is about the "Information about the foreign person", Part II includes "Information about the taxable transaction and amount of tax payable", Part III comprises "Information about types of electronic services provided", and Part IV mentions "Confirmation of veracity and completeness of information specified in this declaration".

4. Ultimately, the payment has to be performed. In accordance with the Declaration the total cost of the services, amount of the tax shall be calculated and other requirements set, and under this Declaration the taxes shall be paid to the state on a quarterly basis by the foreign company providing electronic services.

Accordingly, after enforcing the amendments outlined, as a result, 18 international companies, such as Doodle Inc., Facebook Technologies Ireland Ltd., Netflix International BV., Microsoft Ireland Operation Limited, that provide electronic services to individuals in Tajikistan, registered within the Tax Committee and paid taxes to the state budget. Apple Distribution International is one of the first international companies registered within the Tax Committee in Tajikistan, by submitting declarations for the I and II quarter, thereby beginning the tradition of fulfilling the tax obligations in Tajikistan by the electronic service providers.