On certain amendments to the Tax Code of the Kyrgyz Republic
A new special tax regime has been introduced – a tax on mining.
Mining – activity on carrying computing operations by means of software and hardware, providing functioning of the register of blocks of transactions (blockchain) by means of entering into the distributed register of the information on the operations made between users, demanding maintenance of continuous power supply. Mining may be accompanied by the creation of a virtual asset in the possession of the person performing mining as a reward for the confirmation of operations performed in the distributed register.
The tax on mining provides for the obligation to pay this tax with regard to the activity subject to taxation, instead of the profit tax, VAT on taxable supplies and sales tax.
The law comes into force after fifteen days from the date of official publication. It was published in the newspaper “Erkin Too” dated August 7, 2020 № 62.
The circle of organizations that are the taxpayers of the bonus has been changed
According to introduced changes, specialized organizations of water supply for selection and use of underground water and organizations for selection of underground water for drinking water supply of settlements, as well as for rural commodity producers in the sphere of animal husbandry, plant growing and fish farming were excluded from the number of organizations that are tax-payers of the bonus.
The law comes into force after six months from the date of official publication. It was published in the newspaper “Erkin Too” dated August 14, 2020 N 64.
On increase in the authorized capital of banks
The President of the Kyrgyz Republic Sooronbai Zheenbekov signed the Law “On Amendments to the Tax Code of the Kyrgyz Republic”.
The Law was adopted by the Jogorku Kenesh of the Kyrgyz Republic on June 17, 2020.
The purpose of the Law is to stimulate shareholders of commercial banks to increase the authorized capital of banks, create additional opportunities for attracting foreign investors and ensure equal rights for investors, both residents and non-residents of the Kyrgyz Republic.
The Law provides that:
– undistributed profit of the bank aimed at increasing the authorized capital without paying dividends is not the payment of income and does not entail a tax liability (Article 165 (Composition of the total annual income) of the Tax Code has been added to Part 4);
– undistributed profit of a bank directed by a taxpayer to increase its charter capital without payment of dividends, as well as transfer of shares to this taxpayer associated with such increase of charter capital is not a payment of income and does not entail a tax liability. The corresponding addition is made to Article 223 (Procedure for withholding and rate of tax on income of a foreign organization received from a source in the Kyrgyz Republic not connected with permanent establishment in the Kyrgyz Republic) of the Tax Code.
On lifting restrictions on all international scheduled flights
In order to resume regular flights with other states, the restrictions on all international regular flights to/from the Kyrgyz Republic introduced since March 20, 2020, have been lifted.
On determining the procedure and conditions for issuing an electronic work permit
With a view of improvement of an order of realization of labor activity in territory of the Kyrgyz Republic by foreign citizens and persons without citizenship, and also citizens of the Kyrgyz Republic abroad, the order and conditions of delivery of the electronic permission to work is defined.
The employer/foreign employee submits to the authorized body the application and documents on reception of the electronic permission to work through the State portal of electronic services. The authorized body within two working days checks the submitted documents. In case of detection of errors and discrepancies, the employer/foreign employee is immediately sent an electronic message about the need to make corrections, and the application is returned for revision and re-submission. Upon receipt of a full set of electronic documents, the employer/foreign employee receives an e-mail message with a receipt of electronic documents containing a unique number within two business days.
The employer/foreign employee, having received the electronic work permit, prints it out, if necessary. The electronic work permit is valid upon presentation of the foreign employee’s passport.
The resolution comes into force fifteen days after its official publication.
On introducing a number of amendments to legislative acts on issues of clean air and improvement of tax administration
The President of the Kyrgyz Republic Sooronbai Zheenbekov signed the Law of the Kyrgyz Republic “On introducing amendments to some legislative acts on issues of clean air and improvement of tax administration”.
The Law was adopted by the Jogorku Kenesh of the Kyrgyz Republic on June 25, 2020.
The signed Law is aimed at reducing the level of air pollution in large cities of Kyrgyzstan, where it exceeds the maximum allowable concentration in some indicators and threatens public health.
The Law provides for tax preferences for electric cars, electric charging stations and their spare parts (components) imported to us and produced in our country, as well as the responsibility of diagnostic centers conducting technical inspection.
The Act shall come into force fifteen days after its official publication, with the exception of Article 1 of the Act. Article 1 of the Law shall enter into force from the first day of the next tax period, not earlier than 2 months after its official publication, unless the laws of the Kyrgyz Republic establish another procedure for its entry into force.
On approval of the Rules of the Interconnection in the Kyrgyz Republic
In order to ensure the effective development of the telecommunication services market in the Kyrgyz Republic and to create the necessary conditions for the development of infrastructure based on fair competition in the telecommunication services market, the Rules of interconnection in the Kyrgyz Republic were approved. The Rules regulate the relations between telecommunication operators of the Kyrgyz Republic, providing and requesting interconnection in the territory of the Kyrgyz Republic.
The Resolution comes into force after fifteen days from the date of official publication.
On adoption of the Law of the Kyrgyz Republic “On restructuring of debts on accrued interest, penalties, tax sanctions, fines on insurance premiums”
The purpose of the Law is to stabilize and support the financial and economic condition of taxpayers and payers of insurance premiums for state social insurance in the conditions of the Coronavirus infection COVID-19 pandemic by restructuring the debt on accrued interest, penalties, tax sanctions, fines for insurance premiums for state social insurance.
Tax arrears are subject to restructuring, including arrears of value added taxes on imports, excise taxes on imports levied by customs authorities and arrears of insurance premiums on state social insurance of taxpayers and payers of insurance premiums on state social insurance.
Thus, taxpayers and payers of insurance premiums for state social insurance are exempt from the obligation to pay penalties and tax sanctions, fines accrued for late and/or incomplete payment of taxes and insurance premiums formed on July 1, 2020, by writing them off in the following amounts and cases:
– 100 percent – upon full repayment of the principal debt in the period up to July 1, 2021;
– 50 percent – upon full repayment of the principal debt in the period up to December 31, 2021.
The amounts of interest, tax sanctions, fines and penalties in the amount of 100 percent are written off to the taxpayers and insurance contribution payers who do not have debts on the main amounts of taxes (including import VAT and excise tax) as of July 1, 2020.
The law comes into force from the date of official publication and is valid until December 31, 2021.
On approval of the algorithm of import of medical goods by legal entities and individuals to the territory of the Kyrgyz Republic from the territory of the EAEU Member States and third countries for the purpose of rendering humanitarian assistance
In order to provide health care organizations with necessary medical goods, algorithms of import of medical goods by legal entities and individuals into the territory of the Kyrgyz Republic from the territory of EAEC Member States and third countries for the provision of humanitarian assistance have been approved.
On approval by the NBKR of the Regulation “On special regulatory regime”
In order to reduce barriers for introduction of innovative services/technologies on the market of banking and payment systems by existing and new players, the Board of the National Bank of the Kyrgyz Republic adopted a resolution “On approval of the Regulation “On special regulatory regime” on August 12, 2020.
The interest in new technologies is conditioned by the need to solve the tasks both for the consumers of banking services in terms of reducing their cost, increasing their accessibility to the end consumer, and for the regulator through ensuring transparency and control over the processes of providing services, increasing competition in the market and minimizing risks in the activities of financial and credit institutions.
In accordance with this decision, the procedure for consideration of applications, taking decisions on granting, suspension and termination of licenses under a special regulatory regime is defined.