1. E-commerce tax (a new tax introduced)
Entities involved in the following can be subject to e-commerce tax at 2% on net profit:
- provision services in electronic form based on the use of a domain name or IP-address registered in Kyrgyzstan;
- activities of the seller and / or operator of a trading platform in accordance with the legislation of Kyrgyzstan on electronic commerce.
2. VAT on digital services (a new tax introduced)
Entities providing services in electronic form without using a domain name or IP-address registered in Kyrgyzstan and which does not lead to creation of a permanent establishment should be subject to 12% VAT on digital Services.
4. In order to balance the conditions of doing business and support domestic producers, the rate of sales tax for production is reduced to 1%.
5. Taxation of Islamic principles of financing is introduced. Accordingly, conditions are being created to increase the financing of economic sectors by Islamic institutions.
6. Tax incentives are introduced for a number of industries:
- lower rate for a single tax for clothing industry;
- VAT benefit for jewellery industry;
- VAT benefit for temporary import of aircraft due to their high cost for aviation industry;
- exemption from VAT of electric buses.
7. The land tax has been removed from the list of local taxes.
8. Written explanations of the Ministry of Economy and Finance of the Kyrgyz Republic will have binding effect for the tax authorities;
9. A simplified VAT refund mechanism for entities involved in export activities is introduced.
10. Tax regimes on the basis of a mandatory patent and tax contract are abolished.
11. Amendments to the Tax Code will be made no more than once a year, except force majeure cases.
The more detailed information on each changes were introduced into the relevant sections of WWTS Kyrgyzstan page.