1. Topic: Value added tax

2. Overview

3. Maurice Lauré, Joint Director of the France Tax Authority, the Direction générale des impôts, was first to introduce VAT on 10 April 1954, although German industrialist Dr. Wilhelm von Siemens proposed the concept in 1918. Initially directed at large businesses, it was extended over time to include all business sectors.

4. In France, it is the most important source of state finance, accounting for nearly 50% of state revenues

5. The value-added tax, referred to hereinafter as the VAT, shall be a form of transferring to the budget a portion of the value added in the process of the production and circulation of goods, work, and services on the territory of the Republic of Tajikistan, as well as a portion of the value of all taxable goods imported onto the territory of the Republic of Tajikistan.

6. The value-added tax, which is an indirect tax, shall be payable at all stages of the production and circulation of goods and the performance of work and the provision of services. The amount of VAT payable on taxable turnover shall be defined as the difference between the amount of tax assessed on such turnover and the amount of tax to be credited in accordance with VAT tax invoices that are presented pursuant to the provisions of this section.

7. Personal end-consumers of products and services cannot recover VAT on purchases, but businesses are able to recover VAT (input tax) on the products and services that they buy in order to produce further goods or services that will be sold to yet another business in the supply chain or directly to a final consumer. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state.

8. Value added taxes were introduced in part because they create stronger incentives to collect than a sales tax does. Both types of consumption tax create an incentive by end consumers to avoid or evade the tax, but the sales tax offers the buyer a mechanism to avoid or evade the tax—persuade the seller that the buyer is not really an end consumer, and therefore the seller is not legally required to collect it.

9. Objects of Taxation Objects of taxation with respect to the value- added tax shall be: taxable transactions and taxable imports

10. Taxable transactions shall be: deliveries of goods, the performance of work, the provision of services

11. Value of a Taxable Transaction The value of a taxable transaction shall be determined on the basis of the amount (the value, including in kind) which the taxpayer receives or has the right to receive from a customer or any other person, including any duties, taxes, and/or other fees, but not including the VAT and retail sales tax.

12. Value of Taxable Imports The value of taxable imports shall be the customs value of goods as determined in accordance with the customs legislation of the Republic of Tajikistan, plus the amount of duties and taxes payable on the importation of goods into the Republic of Tajikistan, but not including the VAT.

13. Tax Exemption The following deliveries of goods (other than exports of goods), work performed, and services provided shall be exempt from the VAT: 1)the sale, transfer, or leasing of real estate 2)the provision of financial services 3)the delivery of domestic and/or foreign currency (other than for numismatic purposes), as well as securities;

14. 4) the performance of religious and ceremonial services by a religious organization; 5) the provision of medical services, with the exception of cosmetic medical services 6) the provision of services in the sphere of: - pre-school childcare and education; - general primary and general secondary education; - basic, secondary, and higher vocational and professional education, post-graduate professional education; - supplemental and special education.

15. 7) the delivery of goods, the performance of work, and the provision of services as humanitarian assistance 8) the delivery of goods, the performance of work, and the provision of services produced (performed, provided) directly by penitentiary institutions of the Republic of Tajikistan 9) the delivery of newspapers, magazines, fiction, children's literature, scientific and technical books and textbooks, as well as the performance of work related to their publication.

16. 10) the delivery of specialized products for individual use by disabled persons based on a list established by the Republic of Tajikistan government 11) sanatorium and health resort services

17. Taxation of Exports of Goods Exports of goods, other than raw cotton, cotton fiber, and primary aluminum, shall be subject to the value-added tax at the zero rate