Page 31 - Mazars Central and Eastern European tax guide 2023

Kyrgyzstan VAT options in Applicable / limits The following social contributions are withheld from
employee income: 8% to the Pension Fund, 2% to the State
Kyrgyzstan
Pension Fund. The following social contributions are paid
Distance selling No by an employer on employee income: 15% to the Pension
Fund, 2% to the Compulsory Health Insurance Fund, 0.25%
Call-off stock No
Mazars LLC VAT group registration No to the Employee Health Improvement Fund.
118 Moskovskaya st., 2 floor,
nd
Business center Olymp Cash accounting – yearly
amount in EUR (approx.)
Bishkek, Kyrgyzstan Available without limits.
Phone: +996 312 882 155 Import VAT deferment No
E-mail: infoca@mazars.kz Local reverse charge ü

Option for taxation
letting of real estate No
supply of used real estate No
Corporate taxes and other direct taxes Transfer pricing in Kyrgyzstan VAT registration 30 mKGS (approx. 324 kEUR)

Taxable income is calculated as annual income minus Arm's length principle ü Since 2009 threshold
expenses. It is possible to deduct only properly Documentation is
documented expenses provided that expenses are not required, but Personal income tax / Social security system
benchmarking
connected with the taxable income. Dividends and capital must be provided The following are recognised as tax residents: citizens
gains are excluded from taxable income. The percentage Documentation liability No at the tax of the Kyrgyz Republic, any individual remaining in the
of depreciation norms for fixed assets is set in the Tax Code authorities Kyrgyz Republic for at least 183 calendar days in any
and is similar to IFRS principles in substance. Loss carry request. consecutive 12-month period ending in the current tax
forward is available within the following 5 calendar years APA No – period (calendar year).
inclusively; the rule on carry forward of the losses does not Country-by-Country –
apply to losses generated during periods when a company liability No All types of income are taxed at a rate of 10% regardless
enjoyed tax benefits. There are no thin capitalization rules. Master file-local file of the tax residency status of the individual and the type
(OECD BEPS 13) of incomes received.
WHT is applied to incomes paid to non-residents that are applicable
not registered for tax purposes in Kyrgyzstan. The taxable Penalty
incomes are listed in the Tax Code. Kyrgyzstan has signed
32 Treaties on the Avoidance of Double Taxation. The treaty lack of documentation No – Wage related taxes in Kyrgyzstan Minimum wage Average wage
rates prevail over the Tax Code, however it is important in private sector
to have a duly issued tax residency certificate for the non- tax shortage ü From 10% to 100% of the Exchange rate KGS/EUR 92.80 in EUR in KGS in EUR in KGS
resident to apply the treaty. The Multilateral instrument tax shortage.
(MLI) is not in force. Interdependent entities are 129 12,000 377 35,000
entities whose relations Total wage cost 152 117.25% 442 117.25%
VAT and other indirect taxes between them may affect
the conditions or economic Employer's social security and other contributions 22 17.25% 65 17.25%
The VAT concept is quite similar to the concept applied results of their activities or Gross salary 129 100.00% 377 100.00%
in the developed countries worldwide. Turnover subject those of the entities they
represent, namely:
to VAT is in general the total value of sales (Output VAT). 1) An entity participates Personal income tax 13 100.00% 38 100.00%
VAT paid to suppliers (input VAT) is deducted from Output directly or indirectly in an Employees' contributions 13 10.00% 38 10.00%
entity and the aggregate
VAT. Input VAT cannot be offset if the goods, works, share of such participation Net salary 103 80.00% 302 80.00%
services purchased are not related to the taxable turnover, is more than 20 percent;
the VAT-invoice is not issued by a supplier or is issued 2) Two entities in which a
third entity participates
with the violation of the legal requirements, the supplier whose direct and/or indirect
is declared by court as inactive entity, etc. The VAT rate for Related parties interest in each entity is
export of goods is 0% and there is a procedure for refund more than 20 per cent, or is
of the related input VAT. A special VAT procedure applies controlled by such an entity
3) When one natural person
to the export/import of goods to/from the countries is subordinate to another
belonging to the Eurasian Economic Unit such as Russia, natural person in an official
capacity
Belarus, Kazakhstan and Armenia. 4) Entities between which
Sales Tax applies to revenue besides VAT. The rate varies there are relations regulated
by the labour legislation of
from 0% to 5% depending on the type of activity and the Kyrgyz Republic
method of receipt of the revenue in cash or in not. 5) Close relatives;
6) The founder of the
Excise Tax is paid by importers or sellers of: management and the
trustee. Ludmila Dyakonova
1) Alcoholic products Partner
2) Tobacco products Safe harbours ü 20% Phone: +7 778 873 7159
3) Oil products. Level of attention paid by Tax E-mail: ludmila.dyakonova@mazars.kz
Authority 8/10

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