What is the tax regime to choose for SMEs in Kyrgyzstan?


Choosing a tax regime is an important step for any business in Kyrgyzstan. Taxes, reporting, and accounting costs depend on it.

According to Article 46 of the Tax Code of the Kyrgyz Republic, a tax regime is recognized as the composition of taxes, the procedure for their calculation and payment, applied in accordance with the tax legislation of the Kyrgyz Republic.

The following operate in the Kyrgyz Republic:

  • general tax regime;

  • special tax regimes.

General Tax Regime

The general regime applies to businesses that incur obligations for all state and local taxes provided for by the Tax Code of the Kyrgyz Republic. This regime is usually more suitable for large companies, importers, and businesses operating with VAT (Value Added Tax).

Special Tax Regimes

A special tax regime provides for a simplified taxation procedure and, in certain cases, exemption from certain taxes.

According to the current edition of Article 46 of the Tax Code of the Kyrgyz Republic, special regimes include:

  1. patent-based tax;

  2. simplified taxation system based on a single tax;

  3. tax regime in free economic zones;

  4. tax regime in the High Technology Park;

  5. mining tax;

  6. tax on electronic commerce activities;

  7. tax on gambling activities;

  8. tax on trade activities in a special regime zone;

  9. tax regime on the "Tamchy" special financial and investment territory with a special legal regime and status;

  10. transaction tax.

Which regime should SMEs choose?

For the majority of small and medium-sized enterprises (SMEs), the simplified taxation system based on a single tax remains the most convenient. This regime allows reducing the tax burden, simplifying accounting, and minimizing the volume of reporting.