What the draft amendments include
The amendments primarily focus on correcting the mechanism of the special taxation "transaction tax." Previously, the tax rate on transactions conducted through foreign banks was reduced from 0.2% to 0.1%, with the bank that opened the account designated as the tax agent. There was also a restriction whereby a foreign organization could only have a settlement account in one bank in Kyrgyzstan.However, practice has shown that international settlements often go through complex schemes and multiple banks. The developers note that the existing restriction on opening an account in one bank reduces the efficiency of transactions, complicates foreign economic calculations, and lowers the competitiveness of the country's banking sector.
The new proposals provide for allowing non-residents to open accounts in several financial institutions in Kyrgyzstan. The procedure for tax registration for foreign companies is also clarified, which will help avoid duplication of TINs and ensure correct interaction between banks and tax authorities.
The amendments also aim to eliminate contradictions in the definition of the term "transaction," increase the coverage of the taxable base for receipts into settlement accounts, establish the principle of single taxation, and simplify the status of the tax agent without the need to detail the directions of fund flows. Additionally, it is proposed to exclude transaction services from the list of tax-exempt services, replacing them with a special regime.
A separate block of changes is the extension of deadlines for transitioning to a simplified taxation system with a rate of 0.1% for those conducting activities outside Kyrgyzstan. In response to statements from several companies about the impossibility of complying with the originally set deadline, it is proposed to move the application submission date from February 1 to March 1, 2026. Taxpayers are also planned to be allowed to sell off remaining goods formed before registration under the old tax conditions until the end of 2026.
Additionally, it is proposed to introduce a new type of fee in the Non-Tax Revenue Code for issuing permits (accreditations) to non-residents for opening and servicing bank accounts in Kyrgyzstan.
Goals of the changes
The developers of the amendments emphasize that these changes will reduce risks associated with compliance, taxes, and sanctions, as well as strengthen centralized control over transactions at the international level.
