Kyrgyzstan

Income of a non-resident deemed as income from sources in Kyrgyzstan that is not connected with a PE is subject to taxation at source of payment, without applying deductions, at the following rates:

• Dividends and interest: 10%.
• Insurance premiums received under risk insurance or re-insurance agreements: 5%.
• Authors fees and royalties: 10%.
• Income from telecommunication or freight services in international communication and transportation between Kyrgyzstan and other countries: 5%.
• Other services and activities: 10%.

WHT applies to Kyrgyzstan-source income regardless of whether the payment is made within or outside of Kyrgyzstan.

The application of DTTs often effectively provides a reduction of WHT rates or an income tax exemption. Note that the application of treaty privileges is not necessarily automatic, and taxpayers may need to comply with certain administrative procedures to secure relief.

Double taxation treaty (DTT) relief

Kyrgyzstan has enforced DTTs with 30 countries and 2 DTTs that are pending. In cases when certain DTTs envisage the tax rates applying for taxation of dividends, interest, or royalties that exceed the rates envisaged by the Kyrgyzstan domestic tax legislation, we believe that such income is subject to taxation at the rate envisaged by the above-mentioned tax legislation. Information outlined in the below table is provided for application by business entities. The below table does not represent tax provisions provided by respective DTTs for government-owned legal entities, governmental institutions, or governmental organisations (central/national banks).

Notes

1. Where the following condition is met:
   1. Beneficial owner is a company (other than a partnership) that directly holds at least 25% of the capital of the paying company.
   2. Beneficial owner is a company that directly holds at least 20% of the capital of the paying company.
   3. Beneficial owner is a company (other than a partnership) that directly holds at least 20% of the capital of the paying company.
   4. Beneficial owner is a company (other than a partnership) that owns not less than 10% of the capital of the paying company.
   5. Beneficial owner is a company that owns not less than 50% of the capital of the paying company.
   6. Beneficial owner is a company that directly or indirectly holds at least 25% of the capital of the paying company.
   7. Beneficial owner is a company (other than a partnership) that directly holds at least 15% of the capital of the paying company.
2. Where the following condition is met:
   1. Interest is paid in respect to credit sales of industrial, commercial, or scientific equipment, goods and merchandise, or sale of goods by an enterprise to another enterprise, given that the interest is beneficially owned by a resident of the other contracting state.
   2. Recipient is a bank or any financial institute, and interest is paid in respect to provision of a loan to another bank or financial institute.
   3. Interest applied to income deemed as income from debt-claim. The term ‘income from debt-claim’ means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and, in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds, or debentures. Penalty charges for late payment should not be considered as income from debt-claims for the purpose of corresponding DTT.
   4. Interest is paid in respect of indebtedness arising as a consequence of the sale on credit of any equipment, merchandise, or services.
3. Where the following condition is met:
   1. Copyright royalties and other like payments in respect of the production or reproduction of any literary, dramatic, musical, or artistic work (but not including royalties in respect of motion picture films nor royalties in respect of works on film or videotape or other means of reproduction for use in connection with television broadcasting).
   2. (i) the payer and the beneficial owner of the royalties are not associated persons within the meaning of subparagraphs 1 (a) or 1 (b) of Article 9 (‘associated enterprises’) of corresponding DTT (for more details, please see corresponding DTT); (ii) royalties are paid for the use of, or the right to use, application software or any patent or for information concerning industrial, commercial, or scientific experience (but not including any such information provided in connection with a rental or franchise agreement).
   3. Royalties are paid for the use of, or a right to use, industrial, commercial, or scientific equipment.