To: Ashgabat and welayat
State tax services

According to the interpretation of the Ministry of Justice of Turkmenistan, given by the letter dated January 15, 2002 for #2-10/62, article 75 of Turkmenistan Civil Code of Saparmurad Turkmenbashi, gives the meaning of deal, where the deal is the expression of the will by physical and legal persons. The asset transfer on the grant basic also is the deal, as will of the parties expresses in this case.
In accordance with a part 4 of article 59 of the Turkmenistan Law dated June 15, 2002 "About undertakings" the eliminated undertaking can make deals concerning its liquidation and also deal, stipulated in the resolution on liquidation. In accordance with the article 60 of above-mentioned Law, under the liquidation of undertaking in definite queue are satisfied creditors demands, after these requirements satisfaction the stayed assets of undertaking to be eliminated are transferred to its participants, having the rights for this asset or obligatory rights concerning this undertaking.
Outgoing from the above-stated the Ministry of Justice informed in above-mentioned letter that under these circumstances there is no making deal because by the power of Law the eliminated undertaking asset transfer implements not depending on its will and therefore is not taxable operation, and in meaning of asset transfer on grant basic, stipulated by the article 3 of Turkmenistan Law dated October 8, 1993 " About the tax on added cost" and with the article 2 of Turkmenistan Law dated October 8, 1993 "About the tax on profit".
The above-stated articles result the meaning of objects of tax on added cost and tax on profit calculation.
The cost of asset, arranged by the liquidation (both main and circulation means) does not enter in objects to taxation, stipulated by the above-mentioned Law.
Therefore, under the distribution of eliminated firm asset after the repayment of obligations on payment of taxes and diverse payments into the budget of Turkmenistan, cost of the indicated asset is not object to taxation on added cost and profit tax.
According to the section 4 of a Rule about the order of calculation and payment of local taxes and collectings, approved by the Order of the President of Turkmenistan dated September 28, 2000 #4860 "About the local taxes and collectings", the object to taxation on automobiles implementation is the market cost of sell (transmitted by exchange, donation, transfer by right of succession or in diverse form of transmission of the property right) automobiles (buses, cargo and cars on a pneumatic course).
That is why if under the liquidation of undertaking the above-stated vehicles are included into arranged between the founders asset, then this undertaking will be taxpayer on automobiles implementation, as this operation will be concerned to the "diverse form of property right transmission" category.
It is necessary to mean that the physical persons are the founders of undertaking, in which property the asset is arranged, and are the payers on income tax from the asset cost, exceeding their constituent contribution.
By this it is necessary to mean following.
According to the actual Law of Turkmenistan, by the income tax calculation, in case the citizens obtain from firms, entities and organizations the incomes in the natural form then the goods, articles, products, and also movable and immovable property are valued on operational market prices, and agricultural commodity under the actual cost price.
Outgoing from above-stated, founders of eliminated firm - the physical persons, will pay income tax from the cost of arranged asset, outgoing from the market prices which are operational during disposal of the given asset.
If structure of arranged asset will include agricultural commodity, the income tax should be calculated outgoing from its actual cost price.
If one of the co - founders is the legal person, the asset, received as a result of liquidation, is included, outgoing from the operational market prices, in object of taxation on profit in parts, superior the earlier made by him contribution to the authorized fund of eliminated firm. By this it is necessary to mean that if this legal person
receives as a result of liquidation earlier brought in by him asset (for example, the same equipment), not depending on this asset cost, the profit tax does not arise.
We ask you to accept the above-stated to a manual and to bring to a notice of subordinate tax services and interested persons.