1.
The present Tax Code applies to all taxes administered, the
tax behavior of taxpayers in the
territory of the Kyrgyz Republic with the exception of customs duties, fees,
and payments regulated by Customs Legislation.
Peculiarities of taxation of
subjects of small business and free economic zones (FEZ) shall be regulated by
relating Laws of the Kyrgyz Republic.
(The wording of the Kyrgyz Republic
Law of December 1, 1999 # 135)
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1.
Provisions of the Tax Code are applied to all taxes, which are
put into effect in accordance with the present Code.
2.
They are also applied to other taxes, unless otherwise
provided by some special legislative acts.
1. A
tax is a compulsory payment to the state budget, collected from
income/turnover, received by legal and physical persons and comprises fees,
national duties (except for penalties, repayment of debts, payments for goods,
services and works performed).
2. The
following taxes are collected in the Kyrgyz Republic:
1) Statewide
taxes, for which tax rates, objects of taxation, taxpayers and collection
methods are defined in this Code.
2) Local
taxes applied by the local Keneshes in accordance with this Code.
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The right to implement or revoke
taxes in the territory of the Kyrgyz Republic
is exclusively with the Jogorku
Kenesh of the Kyrgyz Republic.
Arrears regarding taxes, fees,
assessed interest and penalties shall not be subject to writing off.
Decisions on restructuring tax
arrears, assessed interest and penalties of economic entities shall be taken in
the form of a separate law submitted by the Kyrgyz Republic Government.
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1.
All drafts on introduction of amendments to the Tax Code are
subject to preliminary expert evaluation of the Ministry of Finance of the
Kyrgyz Republic prior to being considered by the Government and the Jogorku
Kenesh of the Kyrgyz Republic.
Draft laws on implementing or
revoking taxes, tax exemptions shall be adopted only given there is a consent
of the Government of the Kyrgyz Republic.
2.
It is prohibited to include tax issues in other laws except
for the cases stipulated in Item 2 of Article 1 of this Code.
Amendments to the Tax Law adopted
according to the established procedure shall come into effect on the expiration
of 15 days from the day of their official publication unless otherwise provided
in the adopted normative legal acts.
Tax legislative acts establishing
new taxes, increasing tax rates or otherwise deteriorating the situation of
taxpayers, shall have no retroactive power.
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Article 6. International Treaties and Other Acts Ratified by the
President of the Kyrgyz Republic or the Jogorku Kenesh of the Kyrgyz Republic
Prevail over the Tax Code
The provisions of
internatioinal treaties and other acts to which the Kyrgyz Republic is a party, ratified by the President
of the Kyrgyz Republic or the Jogorku
Kenesh of the Kyrgyz Republic, take precedence over the provisions of this Code. (The wording of the Kyrgyz
Republic Law of November 27, 1999 # 130)
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Article 7. Conversion of Foreign Currency
When tax is being
assessed, receipts and all assets received in foreign currency, as well as expenses incurred in foreign currency,
which are subject to deductions, shall be converted into soms in accordance
with the official rate of the National Bank of the Kyrgyz Republic on the date
of currency transaction.
Article 8. Instructions
The Ministry of Finance of the Kyrgyz
Republic is obliged to issue Instructions on implementing the provisions of the
present Code and bring them to the notice of each taxpayer by means of mass
media.
The instructions are in effect
only upon approval by the Government of the Kyrgyz Republic and shall be in
force until they are revoked.
(deleted)
(deleted)
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Article 9. Definitions Used in the this Code
The following concepts are
applied in this Code:
- Agent
is a subject who carries on activity on behalf of a taxable subject, but
is not its employee.
- Assets
designate an accounting category, comprising long-term, intangible and
current facilities.
- Bad
debt designates the amount due to a taxable person, who cannot
receive the full amount of debt due to insolvency or liquidation of a debtor or expiration
of the period of
limitations stipulated in the legislation.
- Non-profit
organization is a public organization, whose Charter and activity do
not pursue the purpose of gaining profit /income from commercial activity.
- Receipts
from gaming is the amount of money received from gaming minus the
paid win.
- Customs
Union Member States are the member states of the Customs Union
within the CIS, to which the Kyrgyz Republic is a member.
- CIS
Member States are the countries, which are the members of the
Community of Independent States.
- A
state is considered to be exercising preferential taxation if in its
territory:
1)
the current tax rate is lower than that in the Kyrgyz
Republic;
2)
the laws on confidentiality of financial information or the
information of the companies,
permitting to keep secrecy regarding the actual owner of the property or
income, are in force.
- Dividends
means any distribution of income (profit) of an economic partnership and
society or credit union to a person as an income from his shares of this
economic partnership and society or credit union savings share, or any
other payment of this society or credit union in accordance with the
interest or savings share of this person in its capital. The amount of
subscription to the statutory (authorized) fund (adjusted for inflation),
payable to the holders of shares or savings share at the liquidation of a
legal person, shall not be considered a dividend.
- Long-term
contract designates a contract for production, construction and
supply of goods, material values and equipment, installation or assembling
property, if the contract is not completed within 18 months after the
commencement date of this contract.
- Income
is a newly-created value (received from sale of goods, services and works
performed minus material expenses, services by other organizations).
- Legal
tender is currency, which is legal payment means in the
country of the currency issuing.
- Taxpayers
registration number (identification tax code) means the
registration number (identification code) issued to a taxable subject by
the State Tax Inspectorate of the Ministry of Finance of the Kyrgyz Republic.
- Imports of goods means entry of goods into
the customs territory of the Kyrgyz Republic according to the regime of
putting them into free circulation under the Customs Law.
- Personal
plot of land does not imply plots of land distributed to farmers in
the established manner as well as plots leased to physical persons.
- A
person designates any legal or physical person, carrying on activity
in the territory of the Kyrgyz Republic.
- Excise
banderole is an approved pattern banderole, which is stuck on a pack,
bottle or other container, in which excisable goods are sold, indicating
that the excise tax was paid.
- Local
taxes make part of the system of taxes collected from legal and
physical persons and transferred to the local budget.
- Local
fees are one-time levies established by local governments and
collected from the
population, nterprises and organizations as partial compensation of
expenses incurred in providing them services or granting the right to
carry on specific activity.
- Minimum
annual income designates the amount of 12 minimum monthly wages for a
tax year.
- Minimum
monthly income designates income equal to a minimum monthly wage
payable this month in the Kyrgyz Republic.
- Tax
on supplies - VAT paid or payable to the taxable
subject for goods shipped, works performed and services
rendered in the course of economic activity.
- Tax
on acquired material resources means VAT paid or
payable by a taxable subject
on acquired material resources.
- Tax
subject to credit is VAT paid or payable on acquired
material resources which this Law allows to be deducted from the VAT, on
goods shipped, works performed and services rendered, due in the process
of economic activity for a specific tax period.
- Value
Added Tax (VAT) means an amount assessed and payable under this Code.
- Resident
taxpayer is any person, staying in the Kyrgyz Republic for at least
183 days during a calendar year or a person, who established a body of
his/her own actual management in the Kyrgyz Republic under the Laws of the
Kyrgyz Republic.
- Non-resident
taxpayer is any person, staying in the Kyrgyz Republic for less than 183 days during a calendar
year, carrying on economic activity and receiving
income from a source of income in the Kyrgyz Republic .
- Immovable
property means buildings, constructions, perennial plantations and
other property connected with land, which cannot be relocated without
causing incommensurable detriment to their purpose.
- Non-commercial
organization is an organization that satisfies the following requirements:
1)
this organization is registered as a political party, public
movement, trade union, religious, charitable, amateur-sporting or other similar
organization;
2)
the charter of this organization contains provisions, stipulating
that none of its income, fixed assets may be used for the personal benefit of its members or other persons
associated with one of the members of such an organization;
3)
the activity of such an organization is carried on in
accordance with its charter;
4)
this organization has obtained a certificate from a tax office
to the effect that it is entitled to enjoy the preferences stipulated in
Articles 112 and 145 of this Code and this certificate has not been revoked.
- Intangible
assets are the objects of intangible property (such as a patent,
license, trademark, ability to gain profit, a copyright or agreement on utilizing the name and the
trademark of a firm - firm owner - distributor of goods and services), the
useful life of which is at least one tax year, and which are subject to depreciation. Financial
assets shall not be included in intangible assets.
- Taxable
subject is a subject, which is registered or required to be
registered for VAT.
- Taxable
supplies are supplies, made by a taxable subject other than supplies
which are exempt from VAT under Article 138 of this Code and mean:
a)
supplies of goods in the territory of the Kyrgyz Republic; or
b)
supplies of works and services, made for consideration in the
Kyrgyz Republic.
- Taxable
imports are imports of goods to the customs territory of the Kyrgyz
Republic, other than imports of goods exempt from VAT.
- Taxable
Turnover is the total value of all taxable supplies, excluding VAT,
for any particular period.
- Consideration
includes all types of payments to the supplier, made directly or
indirectly by a customer or other person for supplies, paid or subject to
payment in full or partially, in money or in kind.
- Fixed
assets are assets, with the value of each asset exceeding 45 minimum
monthly wages and useful life exceeding one year, except for land, stock
of raw materials and finished goods.
- Fixed
production assets are assets with the value of each asset being in
excess of 45 minimum monthly wages and useful life being more than one
year and subject to depreciation.
- Supply
designates shipment of goods (sale, gift and acquisition of taxable goods
by a subject for private purposes), performing works and providing
services (including gaining profit from property without ownership
transfer, leasing and hiring land as well as its subleasing) by a person
carrying on economic activity.
- Permanent
establishment is determined by a fixed place of a non-resident
taxpayers activity, through which he carries on economic activity fully or
in part, including:
1)
activity, performed through an authorized person;
2)
construction, installation or assembling of objects as well as
performing controlling activity, connected with these objects;
3)
prospecting or extracting natural resources; plants, constructions
or other objects used for these purpose, as well as performing controlling
activity in connection with them;
4)
providing other services, including consulting.
- Acquired
material resources are fixed assets, goods, including raw materials,
materials, fuel, completing items, as well as works performed, services
rendered, which are received or imported by a taxable subject for
production purposes in course of economic activity.
- VAT
invoice means:
a)
an invoice issued in connection with a taxable supply by
reason of Article156 of this Code;
b)
(deleted).
- The
Customs Law designates the current customs legislation of the Kyrgyz
Republic.
- Customs
value of goods - customs value of goods shall be determined under
Part V "Customs Tariff" of the Customs Code of the Kyrgyz
Republic.
- Customs
territory of the Kyrgyz Republic is the territory of the Kyrgyz
Republic in which the Kyrgyz Republic enjoys absolute jurisdiction
with regards to customs activity.
- Sales
with regards to assets designates sale, exchange, transfer or some
other alienation of assets.
- Subject
means any physical or legal person, partnership, government body, carrying
on economic activity irrespective of its organization and legal type, the type
of activity, appurtenance and the form of ownership.
- Authorized
person designates an employee of the State Tax Inspectorate of the
Ministry of Finance of the Kyrgyz Republic and its local agencies,
authorized by the head of the Tax Inspectorate to exercise his/her
functions.
- Financial
services are:
a)
transactions of issuance and transfer of loans, issuance of
borrowings, credits, credit guarantees as well as provision of money
guarantees, including management of borrowings, credits or credit guarantees on
the part of creditors;
b)
transactions with deposit and current accounts as well as
other accounts, payments, transfers, debt liabilities, checks and negotiable
commercial payment instruments, collection and factoring transactions;
c)
transactions with currency, bank notes and money, that is a
legal payment instrument, except for golden coins and collection samples;
d)
transactions with stocks, bonds and other securities and also
excisebanderoles, except for services of
safekeeping securities;
e)
financial leasing and other transactions indirectly connected
with crediting;
f)
management of investment funds.
- Authorized
purpose means:
1)
gathering information concerning the extent, quantity and
amount of economic deals, made between any person and a taxpayer under
inspection, with the aim of determining its tax liability;
2)
receiving information from persons, having economic relations
with the taxpayer with the aim of tax collection;
3)
authorized purpose involves determining tax liability of persons, whose personality has not been
identified.
- Exports
of goods means a supply of goods by a taxable subject beyond the
customs territory of the Kyrgyz Republic.
- Economic
activity designates carrying on all types of economic activity by
subjects irrespective of purposes and results of such types of activity.
- Tax
year - a tax year of a taxpayer is a calendar year. A calendar year
starts on January 1 and ends on December 31.
- "Direct
taxes" are taxes paid directly on income or property of a
taxpayer.
- "Indirect
(consumer) taxes" are taxes on goods, works and services, imposed
as an extra charge added to the price or tariff and which are not directly
connected with a taxpayer's income or property (VAT, excise taxes, tax on
paid services rendered to the population and on retail sales, et al.)
- "The
principle of destination country" is the principle according to
which indirect (consumer) taxes
shall be collected in the country of consumption.
- "Basic
source of income" is a type of economic activity which accounts
for no less than 75% of all receipts. For agriculture the basic source of
income shall be receipts from disposal of agricultural output of one's own
production and products of its processing.
- "Patent"
- is a document issued by the Tax Service and certifying the fact that the
appropriate taxes have been paid and the right of a taxpayer to carry on a
certain type of economic activity.
- "Members
of farms, peasants and farmers unions and associations and other
agricultural formations" are members that joined these formations
with a plot of land and/or a
property share.
- "Tax
period" is an accounting period established for taxation
purposes.
- "Financial
sanction" is a responsibility for committing tax offenses.
- "Business
expenses" are all types of expenses with regards to production,
economic and trade activity of taxpayers.
- "Tax
inspection"- is a comprehensive complex of efforts taken once a
year by a responsible official (officials) of the tax service agencies
with regards to a taxpayer meeting the requirements stipulated in the Tax
Law (except for a taxpayer conducting economic activity on a compulsory
patent basis).
- "Tax
liability" - is the amount of compulsory payments established by
the Tax Code, which the Tax Service requires a taxpayer pay to the state budget, as well as
responsibilities of a taxpayer determined by the Tax Code.
- "Profit
(loss) from disposal of goods, works and services" shall be
determined as the difference between receipts from the disposal of goods,
works and services at current prices, excluding VAT and excise taxes, and
expenses involved in their production and disposal, which shows the final
financial result of a company or sector operation within a calendar year
and shall be calculated on an accrual basis.
- "Counter
inspection" is an additional inspection of a subject conducted by
an authorized person for the sole purpose of revealing their financial and
economic relations with another subject under inspection.
- "Credit
unions" (for the purposes of taxation) are organizations established
under the Law of the Kyrgyz Republic "On Credit Unions".
- Representative
offices and affiliates of foreign enterprises, associations and
organizations shall be treated as legal persons for taxation purposes.
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