On approval of the Program “On financing the business entities”

On June 9th, the Government of the Kyrgyz Republic approved the program on “Financing the business entities”.

This program is aimed at restoring and ensuring economic and social stability and supporting business entities whose activities have been affected by the spread of the pandemic.

The program on “Financing of business entities” identifies the following factors that must be met by business entities:

– promoting the preservation of existing and creation of new jobs in the context of an increase in the number of unemployed and the return of migrant workers;

– support of the most cost-effective business areas to form the largest possible contribution to the country’s GDP growth;

– business of business areas that have a multiplier effect on the development of other economic activities;

– support of export-oriented enterprises;

– the need to improve the level of food security of the country;

– providing the population and the health care system with protective equipment and the most popular medical products of domestic production.

Within the framework of the program on “Financing of business entities”, preferential credit funds will be provided in such areas as:

– tourism;

– light industry;

– pharmaceutical industry;

– freight traffic;

– production and processing enterprises, including agro-industrial enterprises;

– manufacturing industry, except for mining.

In order to implement digitalization of tax administration, preferential loans will be provided to small and medium-sized businesses that use the components of digitalization of tax procedures (electronic invoices, software cash registers, product labeling) without restrictions by industry, primarily in the service sector and retail trade.

In addition, this program also considers the refinancing of loans for industrial, processing and processing enterprises and support for small businesses, which are financed on an unsecured basis.

Commercial banks and microfinance organizations lend to small businesses on an unsecured basis, without restrictions by industry, except for consumer loans.

In the framework of the program “Financing of business entities” the following credits will be available to the subjects of business sector:

Acquisition, renewal, expansion, and modernization of fixed assets,

Purchase of raw materials, components, spare parts,

Acquisition, renewal, expansion and modernization of fixed assets, purchase of goods, raw materials, components, spare parts (working capital) by small and medium-sized businesses that use components of digitalization of tax procedures.

Refinancing of industrial, manufacturing and processing loans, except for mining.

Micro-credit on a mortgage-free basis.

On suspension of the initiation of bankruptcy proceedings against business entities

Until January 1, 2021, the bankruptcy Department under the Ministry of economy of the Kyrgyz Republic, the State tax service under the Government of the Kyrgyz Republic, and the Social Fund of the Kyrgyz Republic have suspended the initiation of bankruptcy proceedings against business entities. The corresponding order was signed by acting Prime Minister of the Kyrgyz Republic, first Deputy Prime Minister Kubatbek Boronov.

The document was signed in order to provide support to business entities that have signs of insolvency due to circumstances directly or indirectly related to the spread of COVID-19 coronavirus infection and measures taken by state authorities to restrict economic activities in the fight against the pandemic.

On measures for additional support to businesses in connection with the spread of coronavirus infection COVID-19

The Government of the Kyrgyz Republic adopted the Decree of 12 June 2020 N 332 “On measures to provide additional support to businesses by providing deferrals or installments on the amounts of arrears of insurance premiums and tax arrears resulting from force majeure circumstances associated with the spread of coronavirus infection COVID-19”.

In order to support business entities by providing a deferral or installments on the amounts of insurance premium arrears and tax arrears resulting from force majeure related to the spread of coronavirus infection COVID-19 it is established that from April 1 to October 1, 2020 the payers of insurance premiums are entitled to submit applications to the tax authority for a deferral or installments on the amounts of insurance premium arrears formed for the period from 1 March to 31 May 2020 as a result of force majeure circumstances, for the term not exceeding 1 year.

The Resolution became effective on April 1, 2020.

On approval of the procedure for processing and application of an invoice as an electronic document

In order to introduce an electronic system of fiscal procedures, the Procedure for the formation and circulation of an invoice in the form of an electronic document was approved, which establishes document flow procedures between participants of electronic interaction when an invoice is circulated as an electronic document, including an additional one, with the use of an electronic signature, and the Procedure for the execution and application of an invoice in the form of an electronic document by taxpayers applying invoices in the form of an electronic document.

Also, the decree approved forms of invoices in the form of an electronic document and in hard copy, as well as a form of notification on the balance of unused series and numbers of invoices.

It was established that the VAT payers, as well as the entities that import and/or export goods are registered as participants in the electronic invoice information system, and starting with July 1, 2020, they will issue electronic invoices in the approved forms.

By August 25, 2020, a VAT taxpayer shall submit a notice on the balance of unused series and numbers of VAT invoices to the tax authority at the place of tax registration, with a VAT report for the previous month attached.

The Decision is subject to official publication and comes into force on July 1, 2020.

On introducing amendments to the Resolution of the Government of the Kyrgyz Republic “On streamlining trade activities in the Kyrgyz Republic”

In order to improve tax administration, streamline trade activities and prevent the facts of economic activity without payment of taxes, amendments have been made to the Rules on trading certain types of goods in the Kyrgyz Republic.

Thus, it has been established that the Directorate of Markets and Trade Centers (Houses) is obliged:

– to lease premises and trade areas to business entities for trade and/or storage of agricultural products, foodstuffs, non-food products, public catering facilities, to provide services to the population, if there is a document issued by the authorized state body, on the basis of which the business entity carries out its business activities (registration with the tax authorities and/or a patent, as well as an insurance policy);

– together with the internal affairs authorities to control the protection of public order and fight against offences;

– to keep a register of tenants, indicating information on contracts concluded with business entities (name of the company or name of the entrepreneur, taxpayer identification number, term of the contract, the amount of rent for the provided trading place (container, pavilion, etc.) and the changes and / or additions made to them, the presence or absence of cash registers used by tenants and the lessor, as well as the scheme of location of numbered trading places marked by a certain code, information about the license, if any. This information should be provided upon request of the tax authorities.

The Resolution comes into force after fifteen days from the date of official publication.

On issues related to the selection and nomination of candidates by state bodies for the positions of members of management bodies of business entities with state participation

In order to improve corporate governance in business companies with state participation, the Regulations on State Representatives in Management Bodies of Business Companies with State Participation; and the Procedure for Selection and Nomination of Members of Management Bodies of Business Companies with State Participation were approved.

The Regulation shall come into force on the day of its official publication.