Accounting Outsourcing and
Tax compliance in Kyrgyzstan

Kyrgyzhstan – Accounting Outsourcing and Tax Compliance

Global Expansion Plus provides accounting outsourcing and tax compliance in Kyrgyzstan. We provide services with support of our local accountants and tax specialists. We will perform bookkeeping, accounting and filling tax return on your behalf bearing all associated compliance risks. A tax system that is involving in terms of harmonization and equity makes sense by a large scale. Most countries, with Kyrgyzstan, as an example, offer such kind of system with a wide tax base.

Kyrgyzstan in facts

  • Location: Central Asia
  • Territory: 2,724,902 square kilometers
  • Capital: Nursultan
  • Official language: Kazakh and Russian
  • Currency: Tenge (KZT)
  • Population: 18, 65 million

Corporate income tax (CIT)

CIT is designed for companies with a profit, at the end of the year. It is set at 10% for all resident companies. To account for CIT, you need to first compute the taxable profit for the year. There are allowable expenses, which help to reduce the taxable income of a company. They have to be deducted when coming up with the CIT of a company, before applying the rate of 10%.
Entities involved in gold related activities, like mining and selling, are not subject to CIT. In short, they pay CIT at the rate of 0%. However, incomes from those activities are subject to a special income tax. The rate varies depending on the price of an ounce of gold, worldwide. It may vary from 1% to 20%, on revenue from the sale of gold.

Value-added Tax (VAT)

12% is the normal rate for VAT in Kyrgyzstan. As a VAT agent, you need to charge the same to your goods and services depending on the industry. Not every product or service is vatable. There are some which are zero-rated, while others are exempt. Accounting and reporting for VAT is a requirement by the state that means you have to understand the rates to pull it off.
To become a VAT agent, you need to register an income of not less than KGS 8 million. Nevertheless, those not qualifying for the same can still submit a proposal to the tax committee requesting to be VAT agents. The move, however, is optional.

Personal Income tax (PIT)

All incomes earned by both Kyrgyzstani citizens and foreigners are subject to PIT. For the residents, both local earnings and incomes from aboard are subject to taxation. However, non-residents will only pay PIT for incomes generated locally. The applicable normal rate is 10%.

Withholding tax

Non-residents, operating in Kyrgyzstan, with an income are subject to WHT at variant rates. It depends on the source of income. WHT is withheld by the payer and submits to the state on behalf of the recipient at the following rates:

  • 10% for incomes due to interest and dividends;
  • 10% for all royalties;
  • 5% for freight, transportation and telecommunication service provisions;
  • 5% on insurance premiums and re-insurance compensations.

Payroll related taxation

In Kyrgyzstan, such taxation of employees earning salaries leads to the social contributions thereof. Such contributions are made up the medical insurance, pension, and employees recovery funds. The employer has obligations against such contributions and a 17.25% rate applies on the gross income of the employee. The deductions take place at source.
The pension fund attracts a rate of 10% on the gross salary payable.

Import/ Export related taxation

Border to border movement of goods and services will be subject to taxation. The government of Kyrgyzstan has put in place tax laws that govern this.

Custom duty

All imports into Kyrgyzstan have to go through the entry point. At the border points, there are customs personnel ready to inspect, certify and clear the products before they can be allowed into the country. Custom duty has to be paid for such products. Not all imports will be freely accepted to enter into Kyrgyzstan regardless of whether duty has been paid for or not. For example, importation of guns, gunpowder, and weapons among others. To import such products, the importer will need to disclose a special license for clearance.

Excise taxes

It covers goods produced in Kyrgyzstan. The excisable goods are subject to this duty. They include, but not limited to; alcoholic beverages, tobacco, petroleum products, and platinum. Every year the excisable tax rates for different products are subject to review. They mostly increase for the harmful products such as, alcohol and tobacco. A good example is when a Kilogram of tobacco increased to KGS 460 in excise tax and KGS 1,250 for cigarettes.
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