2018吉尔吉斯斯坦税务简报（英文版）

Kyrgyzstan International Tax Highlights 2018 Summary

Core Content Overview

This document provides an overview of the tax system in Kyrgyzstan, focusing on corporate and personal taxation, as well as value-added tax (VAT) and sales tax. It outlines the legal framework, key principles, and compliance requirements for taxpayers operating in the country.

Corporate Taxation

Tax Residency

• A legal person is considered a resident if it is established under Kyrgyzstan law or if its management is located in Kyrgyzstan.

Tax Base

• Resident companies: Taxed on worldwide income.
• Nonresident entities: Taxed only on Kyrgyz-source income and income from a permanent establishment in Kyrgyzstan.

Taxable Income

• Defined as accounting profit, subject to adjustments under Kyrgyz tax law.
• Includes sales income and non-sales income (e.g., dividends, interest, royalties, leasing income).

Deductions

• Substantiated expenses connected with income are deductible.

Tax Rates

• Standard rate: 10%.
• Leasing companies: 5% (from 1 Jan 2017 to 31 Dec 2021).
• Priority sectors and special zones: 0% for agricultural and processing businesses, preschool organizations, and private medicine cardiac surgery businesses.
• High-tech parks: Tax exemption for corporate income tax, VAT, and sales tax; reduced social security contributions (12%) and personal income tax (5%).

Special Taxes

• Subsoil users: Subject to special taxes for exploration and development activities.

Withholding Tax

• Dividends, interest, royalties, and technical service fees paid to nonresidents are subject to 10% withholding tax, unless reduced by a tax treaty.
• Branch remittance tax: Not applicable.

Anti-Avoidance Rules

• Transfer pricing: Transactions between related parties must be at arm's length; OECD guidelines are followed.
• Thin capitalization: No restrictions.
• Controlled foreign companies: Not applicable.
• Disclosure requirements: None.

Compliance for Corporations

• Tax year: Calendar year.
• Filing: Separate returns are required; no consolidated returns.
• Quarterly advance payments: Due by the 20th day of the following month.
• Annual return: Due by 1 March of the following year.
• Penalties:
  • Interest of 0.09% per day for late payments, capped at the amount of unpaid tax.
  • Fines of 50%–100% of understated tax liabilities.

Personal Taxation

Tax Residency

• An individual is a tax resident if they are physically present in Kyrgyzstan for at least 183 days in a 12-month period.

Tax Base

• Tax residents are taxed on worldwide income, including imputed income.
• Nonresidents are taxed only on Kyrgyz-source income.

Taxable Income

• Includes employment income, management services, and passive income (e.g., dividends, interest, royalties).
• Defined as gross income less allowable deductions and exemptions.

Deductions and Allowances

• Standard monthly deduction: KGS 650 per month.
• Additional monthly deduction: KGS 100 per dependent.
• Pension fund contributions: Deductible up to 8% of total taxable income.

Tax Rates

• Standard rate: 10%.

Other Taxes on Individuals

• Capital duty: Not applicable.
• Real property tax:
  • Residential property: 0.35%.
  • Business property: 0.8%.
• Land tax: Based on location and use, paid annually.
• Inheritance/estate tax: Not applicable.
• Net wealth/net worth tax: Not applicable.
• Social security contributions:
  • Employee: 10% of gross remuneration.
  • Employer: 17.25% of gross salary (15% pension fund, 2% medical insurance, 0.25% healthcare fund).

Value Added Tax (VAT) and Sales Tax

Taxable Transactions

• VAT applies to most sales of goods, performance of work, and provision of services in Kyrgyzstan, including those supplied free of charge.
• VAT also applies to imports (except from EAEU member states).
• Sales tax applies to realization of goods, performance of work, and provision of services, with tax base being the value of goods or services less VAT and sales tax.

Tax Rates

• Standard VAT rate: 12%.
• VAT exemptions: Financial and insurance services, and land supplies.
• Sales tax rates:
  • Cash payments:
    • Commercial activities and agricultural processing: 1%.
    • Other cases: 2%.
  • Noncash payments: 0%.
  • Cellular service fees: 5%.
  • Bank services: 2%.

Registration

• VAT registration: Required if annual turnover exceeds KGS 8 million.
• Sales tax registration: No special requirement.

Filing and Payment

• VAT returns: Monthly, due by 25th day of the following month.
• Sales tax payments: Monthly, due by 20th day of the following month.
• VAT invoice records: Must be submitted with returns.

Tax Law and Authorities

• Source of tax law: Tax Code of the Kyrgyz Republic.
• Tax treaties: Kyrgyzstan has signed more than 20 tax treaties with foreign states.
• Tax authorities: State Tax Service.
• Contact: Deloitte representatives (Vladimir Kononenko, Albina Fakerdinova).

Disclaimer

• This document provides general information only.
• No entity in the Deloitte Network is rendering professional advice or services through this communication.
• Consult a qualified professional adviser before making decisions affecting business or finances.