Once it enters force, the new tax treaty will replace the 1986 Japan and Turkmenistan tax agreement and set new rates for dividends, interest, and royalties.
The income tax treaty between Japan and Turkmenistan came into effect on 27 November 2025.
Signed on 16 December 2024, it replaces the 1986 tax treaty that previously applied between Japan and the former Soviet Union for Turkmenistan.
The treaty applies to Japan’s income tax, corporate tax, special reconstruction income tax, local corporate tax, and related levies.
Dividends: Under the existing convention, dividends are taxed at 15%. Under the new convention, dividends are exempted if the shareholder has held at least 25% of the voting power in a Japanese company or 25% of the capital in a Turkmen company for at least six months. Dividends not meeting these conditions are taxed at 10%.
Interest: Under the existing convention, interest is exempted when received by Governments and similar entities. Under the new convention, interest received by Governments, financial institutions, or recognised pension funds is exempt, while other interest is taxed at 10%.
Royalties: Under the existing convention, royalties on copyright-related income are exempt, while other royalties are taxed at 10%. Under the new convention, all royalties are taxed at 10%.
The treaty enters into force on 1 January 2026.
Earlier, Japan and Turkmenistan exchanged notes to activate their 2024 tax treaty on 29 October 2025.
