Kyrgyzstan

Corporate - Income determination

Last reviewed - 14 January 2020

Aggregate annual income is comprised of all types of income, including, but not limited to, the following, in addition to gross revenue from the sale of goods, works, or services:

  • Dividends.
  • Interest income (except for income already subject to withholding tax [WHT]).
  • Royalties.
  • Assets received free of charge.
  • Rental income.
  • Income from the reduction of liabilities.
  • Foreign exchange gain.
  • Write-off liability.

The Tax Code envisages some profit tax privileges aimed at developing certain areas of the business economy. Currently, these include privileges/preferences for:

  • Charity organisations.
  • Associations of invalids of I and II groups (i.e. persons with disability with different levels of physical disability); associations of blind and deaf persons.
  • Agricultural organisations.
  • Institutions of criminal-executive systems of Kyrgyzstan.
  • Growing of berries, fruits, and vegetables.
  • Credit unions.
  • Companies that have been involved in the food industry for less than three years and included in the Kyrgyzstan government's list of exempt companies.
  • Leasing companies (from 2017).
  • Pre-school education organisations.
  • Private medicine institutions focused on cardiac surgery.

Non-taxable revenues include, inter alia, the following:

  • Property received as a charter capital contribution and income from realisation of shares of organisations.
  • Property donated to special organisations using such property for development purposes under the government's social culture plan. Despite being designated as property used for social culture purposes, such property may still be used for other purposes (i.e. citizen defence projects, mining equipment, water intakes, heat networks, roads, stations).

Inventory valuation

There are no special provisions on inventory valuation in the Kyrgyzstan Tax Code. Inventory valuation is conducted in accordance with the International Financial Reporting Standards (IFRS).

Capital gains

Capital gains are subject to the ordinary profit tax rate. There is an exemption available for capital gains from selling shares that occur on the date of a given sale in the official lists of the stock exchange in the top two categories of listing.

Dividend income

Dividends from participation in Kyrgyz legal entities are exempt from profit tax. All other dividends are subject to the ordinary profit tax rate.

Interest income

Interest income should be included into the aggregate annual income and taxed at the standard profit tax rate, provided the tax has not already been withheld at the source of payment in Kyrgyzstan at the 10% rate.

Royalty income

Royalty income should be included into the aggregate annual income and taxed at the standard profit tax rate.

Partnership income

Simple partnerships are not taxpayers in their own right, and income and expenses flow through to the partners for tax reporting purposes. Kyrgyzstan limited liability partnerships are taxed as corporations.

Foreign income

Generally, Kyrgyz legal entities are taxable on income earned worldwide. Foreign income is subject to the ordinary profit tax rate.

There are no tax deferral provisions in Kyrgyzstan tax legislation.