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8.1.1. Corporate Income Tax

The standard corporate tax rate for companies is 10%. However, a number of other rates apply as follows:

  • Income of leasing companies is subject to corporate tax at a lower rate of 5% from 1 January 2017 until 31 December 2021; and
  • Companies eligible for tax incentives are subject to reduced corporate tax rates (see Sec.10. below).

Simplified Regime

Small businesses (i.e., taxpayers who have gross receipts not exceeding the VAT registration threshold and do not qualify as a VAT-registered taxpayer) may elect to be taxed under a simplified system of taxation.

However, the simplified regime does not apply to:

  • Entities paying tax on the basis of a patent;
  • Entities that provide financial and insurance services;
  • Investment funds;
  • Professional participants in the securities market;
  • Taxpayers subject to excise tax;
  • Taxpayers engaged in public catering; and
  • Taxpayers engaged in activities relating to health resorts.

Small businesses under the simplified regime are subject to a single tax (instead of income tax, sales tax and VAT) in the range of 2% up to 6% on a quarterly basis, depending on the type of activity and the volume of gross receipts.

Effective 1 January 2021, a taxpayer covered under the conditional VAT regime on import of goods for the purpose of their export (see Sec. 12.1.) may also opt to be taxed at the rate of 2% on a monthly basis under the simplified tax regime.

Gold Industry Tax

Companies engaged in the mining of gold ore, concentrate, alloy and gold refining are subject to corporate tax at the rate of 0%. However, an additional tax, i.e., ‘income tax’ is charged on the income earned from the extraction and selling of gold ore, concentrate, alloy and gold refining. The income tax is levied at rates ranging from 1% up to 20% of revenues from gold alloys and refined gold, and from 8% up to 27% of revenues from gold ore and gold concentrate until 31 December 2022 (from 1 January 2023, the rate will vary from 11% up to 30% of revenues from gold ore and gold concentrate). Taxable revenues are the proceeds (net of VAT and sales tax) from the sale of gold alloy and refined gold, and the value of gold in ore and concentrate calculated on the basis of world market prices in the manner specified by the Kyrgyz Government.

Mineral Royalty

In addition to normal company taxes, companies undertaking mining and related activities are liable to pay royalties and bonus tax towards recurring use of sub-surface for exploration purposes. Royalty is levied on the revenue received from sales of minerals or products resulting from processing minerals or the volume of sales, etc. The royalty rate varies based on the type of mineral resources and ranges from 1% up to 12%. The royalty rate for extraction of mineral water resources depends on the type of mineral water and ranges between KGS 0.01 to KGS 200 per cubic meter.

Bonuses are one-time payments for the right to use the sub-soil for the purpose of prospection, exploration, and development of mineral deposits, while royalties are the regular payments for the use of sub-surface resources for the purpose of developing mineral deposits and/or withdrawing (extraction from the subsurface) groundwater. The bonus rate is set by the Government on the basis of the types of minerals, the quantum of mineral reserves for development, the size of the licensed area, etc.

Crypto Mining Tax

Effective 22 August 2020, companies engaged in crypto mining (i.e., bitcoin mining) are required to pay a single tax at the rate of 15% on crypto mining which replaces the corporate tax, VAT, and sales tax for these companies.

Gambling Tax

Effective 30 June 2022, companies engaged in gambling activities are required to pay a gambling tax at the rate of 8% which replaces the corporate tax, VAT, and sales tax for these companies.

Gambling activities include the organization, conducting or providing access to gambling in casinos (including virtual casinos), slot machines, interactive establishments, computer simulators, betting shops, and sweepstakes, regardless of the location of the server.

Alternative Minimum Tax

There is no minimum tax in Kyrgyzstan.