Kyrgyzstan: On the adoption of the Tax Code of the Kyrgyz Republic
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On January 18, 2022, the President of the Kyrgyz Republic signed the Tax Code, adopted by the Jogorku Kenesh of the Kyrgyz Republic on December 22, 2021.
The Tax Code aims to optimize tax administration, ensure the stability of the tax system, further improve the digitalization of tax procedures, create a level playing field for doing business and reduce the parallel component of the economy.
The Code provides for two main approaches to taxation:
- a general tax system which provides for basic taxes such as income tax, sales tax and VAT. The mandatory VAT registration threshold has been raised to 3,000,000 soms.
- simplified tax system based on a single tax. Under the simplified tax system, small and medium-sized enterprises with a turnover of less than 30,000,000 soms will operate. Thus, entities under this regime will only be able to pay a single tax and submit a single quarterly declaration.
The Code establishes a tax on activities in the field of electronic commerce with a rate of 2% (similar to the rate established for non-monetary transactions).
The obligation to pay VAT is introduced for foreign companies providing services in electronic form without using a domain name or IP address registered in the Kyrgyz Republic, the place of delivery of which is recognized as the territory of the Kyrgyz Republic (” Google tax”).
In addition, the Code provides for emergency benefits with performance evaluation. The list of tax benefits subject to assessment, as well as the procedure and types of assessment of the effectiveness of tax benefits, will be approved by the Cabinet of Ministers of the Kyrgyz Republic.
The Code enters into force on January 1, 2022. The Tax Code of the Kyrgyz Republic from January 1, 2009 is invalidated.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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