According to the Kyrgyzstan Tax act, the taxation system is based on the source of income. Residents who live permanently in the country pay taxes on earnings made under employment, either in the country or abroad. Whereas, ex-pats (non-residents) with no permanent residency pay taxes on their Kyrgyzstan-source income only. Taxes are imposed on corporations and business entities carrying out activities within the nation and earning profits from them.
Types of Tax
There are several kinds of taxes that apply to individuals, corporations, and legal establishments.
Personal income tax
This applies to the income earned by persons working in Krygyzstan. It has a standard rate of 10% and is imposed on most types of individual income.
Corporate income tax
Corporations with permanent residence addresses are levied a corporate income tax known as profit tax. They pay this for their total annual income earned globally. Non-resident organizations doing business through a permanently established entity in the country, have to pay a profit tax on all income derived from the activities of the permanent entity. The profit tax rate is 10 percent of the total annual income. However, for gold industries, the profit tax rate for taxpayers involved in the extraction and trade of gold ore, gold concentrate, gold alloy, and refined gold is fixed at 0%.
E-commerce tax
Legal entities involved in electronic trading have to pay this tax in place of other types of taxes. The tax rate is 2 percent and a quarter of the tax period.
Value Added Tax (VAT)
VAT is imposed on taxable supply and taxable imports at a rate of 12%. While certain supplies are liable to a zero-rate VAT; VAT-exempt turnovers apply to some goods. All taxpayers paying VAT are expected to charge a rate on their taxable supply. The input VAT is never permitted for equipoise provided it is prone to reimbursement about the receipt of goods, works, or services not related to entrepreneurial activity.
Import of goods
When goods are imported into the country, they are subjected to VAT.
Sales tax
Sales tax is imposed on income earned by Kyrgyz registered firms or foreign businesses conducting business activities through a permanent establishment, from the sales of goods or rendering of services. The sales tax system is different from VAT. It is taxed for wholesale turnover and does not make the purchases that are input turnover into consideration. Sales tax has a tax period known as a calendar month. Individuals paying tax must file for tax returns and pay their sales tax at the place of tax registration by the 21st day of the month after the month of the report.
Sales tax rates are as follows:
| Trading activities | 1% |
| Other activities | 2% |
| sale of goods, works, or services that are subject to VAT and VAT-exempt, which are paid for via non-cash settlement | 0% |
| sale of goods, works, or services not outlined above:Trading activitiesOther activities | 2%3% |
| Banks | 2% |
| mobile communication activities | 5% |
Note
The place of supply of goods determines if the goods or services are subject to VAT. According to the rules, transactions are said to have taken place at the location where transport of the goods starts if the goods are conveyed by the dealer and at the point where the goods are passed on to the customer. services have a more complicated rule. For services not explicitly stated, they are considered to be supplied at the point where the service provider has set up a legal place of business. Some services are said to be received at the point of the purchase.
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