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13.4. Transfer Pricing

The tax laws of Turkmenistan provide that transactions between related parties involving the exchange of goods, work or services are required to be at arm’s length. Accordingly, if there is any deviation in the transaction values with related parties as compared to the market value by more than 20%, the tax authorities are empowered to adjust the taxable income or disallow an expense or assess an additional income of the taxpayers. For contractors/subcontractors under the Petroleum Law, the divergence may not exceed 10%.

There is no specific documentation requirement in the tax laws of the country. However, the resident entity may maintain detailed documentation on transactions with related parties.

Country-by-Country (CbC) Reporting

Turkmenistan has till date not introduced a Country-by-Country reporting requirement and has not joined the OECD's Inclusive Framework, membership of which presupposes a commitment to implement the BEPS minimum standards, including Country-by-Country reporting.