Kyrgyzstan

There is no concept of corporate residence in the Kyrgyzstan tax legislation.

Legal entities formed under the Kyrgyz law should be taxed in Kyrgyzstan on their worldwide income, whereas foreign legal entities should be taxed only in relation to Kyrgyzstan-sourced income.

Permanent establishment (PE)

Under Kyrgyzstan tax legislation, a PE is a permanent place of business through which a non-resident fully or partially carries out business operations, including activities performed through an authorised person. A PE includes the following:

• Any place of management, branch, office, factory, workshop, mine, oil or gas well, quarry or any other place of extraction of natural resources, or land plot.
• Construction site; construction, installation, or assembly facility; or services related to the supervision of the performance of the relevant work if only such a site or facility exists for 183 or more calendar days or such services are provided for 183 or more calendar days during any 12-month period.
• Installation or structure used for the exploration of natural resources, services related to monitoring the performance of these works, or a drilling rig or a ship used for the exploration of natural resources if only such use lasts for 183 or more calendar days or such services appear within 183 or more calendar days during any 12-month period.
• Provision of services, including consulting services by a non-resident through personnel hired by this non-resident, if the personnel carries out such activities on the territory of the Kyrgyz Republic for 183 or more calendar days during any 12-month period.
• Carrying out entrepreneurial activities in the Kyrgyz Republic through a dependent agent.
• Sale by a foreign organisation of goods in the Kyrgyz Republic, including those obtained as a result of processing in the territory of the Kyrgyz Republic.
• Provision of services in electronic form based on the use of a domain name or IP address registered in the Kyrgyz Republic.

A PE is not created in Kyrgyzstan if a non-resident is limited to the following activities in Kyrgyzstan:

• Use of facilities or maintenance of stocks exclusively for storage or demonstration activities or delivering goods belonging to a non-resident.
• Maintenance of stocks of goods belonging to a non-resident, solely for the purpose of processing by another organisation or individual.
• Use of a fixed place of business exclusively for preparatory purposes.
• Maintaining a permanent place of business solely for the purpose of purchasing goods or collecting information for a non-resident.
• Performance of activities in Kyrgyzstan through an agent in cases where such agent usually performs such activities in the ordinary course of business.
• Possession by a foreign organisation of ownership of shares or participation interests in a domestic organisation.
• Conclusion of an agreement on joint activities, the place of implementation of which is the territory of the Kyrgyz Republic, if the tax accounting of such joint activities is carried out by the taxpayer of the Kyrgyz Republic.
• Conclusion of an agreement on trust management of property with a taxpayer of the Kyrgyz Republic in respect of property located outside the territory of the Kyrgyz Republic.

Creation of a PE may be connected with the establishment of a branch or subsidiary. Both branches and subsidiaries are considered appropriate business vehicles for foreign investors, and the choice between them is determined by the business the investor is engaged in, along with various other factors.