Turkmenistan, Japan Take Major Step to Strengthen Economic Ties with New Tax Treaty

Turkmenistan and Japan have moved to deepen economic cooperation and attract investment, following the exchange of diplomatic notes in Ashgabat on the entry into force of the Convention on the Elimination of Double Taxation and Prevention of Tax Evasion.

Originally signed on December 16, 2024, the treaty will take effect on November 27, 2025, and apply to taxes collected from January 1, 2026, replacing the outdated 1986 agreement signed between Japan and the former Soviet Union, The Caspian Post informs via Turkmen media.

The modern treaty, aligned with OECD Model Tax Convention standards, aims to create a predictable and fair tax environment for companies operating in both countries. It prevents double taxation, introduces updated provisions for information exchange between tax authorities, and strengthens transparency in cross-border economic activity.

Experts highlight its importance for regulating international workforce mobility, particularly for Japanese company employees working in Turkmenistan. A key provision is the “183-day rule,” which exempts income from local taxation if the employee works less than 183 days in a 12-month period and is paid by a non-resident employer. The agreement also covers director fees, pensions, and income for artists, athletes, and students.

The signing and activation of this treaty reflect the strategic foresight of Turkmenistan and Japan, aligning their tax systems with the realities of a globally mobile workforce and distributed labor. This move reduces uncertainty for international employers and signals Turkmenistan’s commitment to deeper integration into the global investment landscape.