According to data from the Tax Committee under the Government of Tajikistan, Tajikistan over the first nine months of last year earned 1,144,500 somonis (equivalent to more than 101,000 U.S. dollars) from taxing online-giants such as Facebook Ireland Ltd, Google, Apple Distribution International Limited, Microsoft, Amazon.
Twenty foreign companies offering electronic services have reportedly been registered with the Tax Committee by the end of 2021.
Among them are Facebook Ireland Ltd, Google, Apple Distribution International Limited, Microsoft, Amazon and some other companies, a source within the Tax Committee told Asia-Plus.
As it had been reported earlier, Tajikistan’s upper house (Majlisi Milli) of parliament seconded the law on amendments made to the country’s Tax Code on December 9, 2020. Tajik authorities reportedly studied the experience of Russia, Belarus, Uzbekistan and several European Union members while drawing up the changes to this law. The law was signed by the president on December 17, 2020 and took effect on January 16, 2021.
Last year, foreign companies offering electronic services were paying VAT to Tajikistan at the rate of 18 percent.
A new Tajikistan’s Tax Code entered into force on January 1, 2022 and the rate of VAT decreased for this year decreased from 18 percent to 15 percent.
The decision to tax online-giants was reportedly made following the rapid development of information technology and electronic commerce (e-commerce).
The idea has been booted around for a few years now. In 2018, it was the Tax Committee that came forward with the idea of somehow forcing companies like Google, Facebook, Microsoft, Booking.com, Chinese online retail service AliExpress and others to pay tax inside Tajikistan. The Finance Ministry rejected the idea at the time.
But the head of the Tax Committee, Nusratullo Davlatzoda, revived the proposal in February, 2020.
“Foreign companies are making a profit by providing services to our citizens. We must create an appropriate legal framework, so that [foreign companies] are able to register and pay taxes,” Davlatzoda told reporters in Dushanbe.
Russian was the first country to introduce the so-called Google tax. The Russian President signed a federal law making e-services VA Table at the location of the customer on July 3, 2016.
Foreign organizations providing e-services in Russia fall within the scope of the Law. For example, the services affected include: remotely granting rights to use software (including updates) via the internet; online advertising services; storage and processing of information online; provision of capacity for posting information; provision of domain names, hosting services; administration of information systems, websites and others.
Some operations are expressly excluded from the scope of the Law. These include, for example, the online sale of goods, provided such goods are physically supplied (without the involvement of electronic means), or the provision of consultancy services by e-mail. The Law came into force in Russia on January 1, 2017. Over the past three years, Russia’s budget has reportedly received about 82 billion Russian rubles in Google tax.
Belarus, Moldova and Uzbekistan have also introduced the Google tax.
Belarus introduced this tax in 2018 and it has received more than 60 million Belarusian rubles in Google tax.
Uzbekistan introduced the Google tax in January 2020.
