Google, Facebook and other online-giants will have to pay an 18-percent value added tax (VAT) to Tajikistan’s national budget.  

According to information posted on the official website of the Tax Committee under the Government of Tajikistan, Tajikistan’s upper house (Majlisi Milli) of parliament seconded the law on amendments made to the country’s Tax Code on December 9, 2020 and the law was signed by the president on December 17, 2020.

The law will take effect on January 16 and digital wallet users have already received notifications that payments for ad in social networking media, online games, foreign domains and hosting must be made until January 15 inclusive.  

The Tax Committee says the decision to tax online-giants was made following the rapid development of information technology and electronic commerce (e-commerce).

Tajik authorities reportedly studied the experience of Russia, Belarus, Uzbekistan and several European Union members while drawing up the changes to this law. 

Recall, Tajikistan’s lower house (Majlisi Namoyandagon) of parliament adopted changes to the Tax Code that extend liability to international online transactions in November last year.

Ads, products and services posted on sites of companies that will refuse to operate in accordance with Tajikistan’s tax legislation will be blocked.  

Tajik authorities say the solution will not affect the price for Internet in the country. 

The idea has been booted around for a few years now. In 2018, it was the Tax Committee that came forward with the idea of somehow forcing companies like Google, Facebook, Microsoft,, Chinese online retail service AliExpress and others to pay tax inside Tajikistan.  The Finance Ministry rejected the idea at the time.

But the head of the Tax Committee, Nusratullo Davlatzoda, revived the proposal in February.

“Foreign companies are making a profit by providing services to our citizens. We must create an appropriate legal framework, so that [foreign companies] are able to register and pay taxes,” Davlatzoda told reporters in Dushanbe.

Russian was the first country to introduce the so-called Google tax.  The Russian President signed a federal law making e-services VA Table at the location of the customer on July 3, 2016.

Foreign organizations providing e-services in Russia fall within the scope of the Law.  For example, the services affected include: remotely granting rights to use software (including updates) via the internet; online advertising services; storage and processing of information online; provision of capacity for posting information; provision of domain names, hosting services; administration of information systems, websites and others.

Some operations are expressly excluded from the scope of the Law.  These include, for example, the online sale of goods, provided such goods are physically supplied (without the involvement of electronic means), or the provision of consultancy services by e-mail.  The Law came into force in Russia on January 1, 2017.  Over the past three years, Russia’s budget has reportedly received about 82 billion Russian rubles in Google tax. 

Belarus, Moldova and Uzbekistan have also introduced the Google tax.

Belarus introduced this tax in 2018 and it has received more than 60 million Belarusian rubles in Google tax.    

Uzbekistan introduced the Google tax in January this year.