The tax service has a wide range of powers and reports directly to President Saparmurat A. Niyazov. A fine of 0.3 percent is charged for each day taxes are overdue. VAT is not levied on cargo transiting the country, urban mass transit, apartment rental, a variety of services, industrial property copyright operations, medical services, and sales of medicine, medical items, and equipment. Foreign investors, their subsidiaries, and representative offices are subject to a 25 percent profit tax . Those engaged in operating commodity, stock, or labor exchanges, or brokerage and intermediary activities are charged a profit tax of 45 percent.
Profit tax is paid once a year.
Newly created enterprises are exempt from profit tax payments during the first year of profitable operation if 70 percent of the profit is derived from production of agricultural commodities, consumer goods, or building materials. During the second year of profitable operation, such enterprises are charged 50 percent of the profit tax. A foreign firm that invests more than 30 percent of a joint venture's working capital in hard currency is exempt from profit tax payments while it is recovering its initial investment. Finally, certain other exemptions are available to representative offices. A property tax of 1 percent per annum is charged for commercial assets.