Kyrgyzstan Overhauls Tax Laws for Businesses, Banks, and Developers

Kyrgyzstan has enacted a comprehensive package of amendments to its Tax Code and legislation governing non-tax revenues, impacting a wide range of economic actors. The new regulations target businesses, foreign corporations, financial institutions, the food service industry, construction developers, and users of electronic trading platforms. They also modify procedures for tax audits and debt write-offs.

A notable introduction is a new collection fee for foreign companies seeking to open and maintain bank accounts within Kyrgyzstan. The specific amount and payment procedures for this fee will be determined by the cabinet of ministers. Furthermore, penalties have been intensified for the transportation of goods from Eurasian Economic Union (EAEU) member states without the proper documentation. Fines vary based on the value of the goods, ranging from 50,000 som for individuals and 100,000 som for companies for goods under 500,000 som, up to 200,000 som for individuals and 300,000 som for companies for goods exceeding 1 million som. Repeat offenders face potential confiscation of their goods.

The rules for services such as taxi, delivery, and transportation have also been revised. Drivers and couriers will only be permitted to connect to ride-hailing, freight, or courier service information systems if they possess tax registration. However, certain entrepreneurs, including those operating under patent, family farms without legal entity status, specific single taxpayers, and transaction tax payers, will be exempt from filing a unified tax declaration.

The timeframe for taxpayers to comply with the Tax Service's decisions regarding additional taxes, penalties, and fines has been extended to 90 calendar days if the decision is not appealed, a significant increase from the previous 30-day period in some instances. Tax audit timelines are also changing, with decisions for unscheduled audits generally needing to be made within 15 calendar days and initiated no later than 30 days after the grounds arise, though shorter five-day periods are available for specific cases. The new legislation also introduces a special invoice for goods exported from Kyrgyzstan to EAEU countries via electronic platforms without a change in ownership, and foreign companies selling goods to individuals in Kyrgyzstan through e-commerce will be required to pay VAT on the value of these goods, which is non-creditable. For the construction sector, tax obligations for construction and installation works will arise upon completion and payment, while for sales of newly built properties, the tax obligation date is the earliest of the invoice delivery date, cash register receipt issuance, or payment receipt. A specific single tax rate of 4 percent is introduced for developers selling new residential and non-residential premises, and 5 percent for saunas and baths.