On amendments to certain legislative acts of the Kyrgyz Republic in the sphere of taxation and social insurance

The Law amends the Tax Code of the Kyrgyz Republic and the Law of the Kyrgyz Republic “On State Social Insurance”.

Thus, the Law provides for the following significant amendments to the Tax Code of the Kyrgyz Republic:

• income from activities outside the territory of the Kyrgyz Republic is subject to income tax at the rate of 3 percent;
• supply of goods intended for the development of sports to entities determined by the Cabinet of Ministers of the Kyrgyz Republic is a VAT exempt supply;
• sale of refined standard and standard bars, investment coins made of gold and/or silver by a domestic organization which is refining company certified by the London Bullion Market Association is exempt from sales tax;
• goods intended for the development of sports sold to entities determined by the Cabinet of Ministers are exempt from sales tax;
• income tax is set at the rate of 5 percent for employees with hearing disability of group III;
• employers are obliged to maintain the Register of tax agent for hired employees and to ensure that it contains up-to-date information on individuals who are hired employees and have labor relations with the employer.

The following key changes was made to the Law of the Kyrgyz Republic “On State Social Insurance”:

• The rates of insurance contribution tariffs were reduced from 27.25 percent to 12.25 percent, where:
• 2.25 percent – will be paid by the employer;
• 10% – to be paid by the employee;

At the same time, the reduction of insurance premium rates will not apply to the following categories of employers:

• organizations financed from the state budget;
• mining companies that develop subsoil areas of national importance and have a license for subsoil use of national importance;
• organizations engaged in the provision (supply) of electricity, heat and gas;
• business entities engaged in the production and/or import of alcohol, tobacco products and fuels and lubricants, with the exception of entities engaged in the production and processing of petroleum products, which have a license to conduct these activities in accordance with the legislation of the Kyrgyz Republic in the field of license and permit system in the Kyrgyz Republic (processing of oil and natural gas, with the exception of the production of bioethanol from vegetable raw materials in commercial quantities and its sale);
• entities operating in the field of cellular communication;
• internet providers;
• commercial banks, specialized financial-credit or credit institutions.

Also, the Law introduces into the Labor Code of the Kyrgyz Republic a norm stipulating the obligation of employers – legal entities to pay wages in non-cash form.

The Law comes into force from the date of its official publication, with some exceptions.

On measures to implement the requirements of Article 146 of the Tax Code of the Kyrgyz Republic

The procedure for the provision of information by banks, payment organizations/payment system operators to tax authorities was adopted.

The procedure defines requirements for information transmitted by banks, payment organizations/payment system operators. According to the resolution, the exchange of information shall be carried out in paper and/or electronic form.

It is established that participants of the process are obliged to ensure the integration of their information systems with the authorized tax authority within 6 months from the date of approval by the authorized tax authority of the requirements and forms of electronic interaction.

The Decree enters into force after ten days from the date of its official publication.

On amendments to certain legislative acts of the Kyrgyz Republic in the sphere of protection of the rights of entrepreneurs and investors

Amendments were made to the legislation of the Kyrgyz Republic aimed at strengthening the protection of the rights of entrepreneurs and investors in the Kyrgyz Republic.

The Criminal Code of the Kyrgyz Republic has been amended to provide for the liability of officials for obstructing lawful entrepreneurial activity. Thus, such illegal actions are punishable by a fine of 5,000 to 10,000 calculation indices or imprisonment for up to two years with or without confiscation of property and deprivation of the right to hold certain positions or engage in certain activities for up to two years.

The Code of Offenses of the Kyrgyz Republic increased the amount of fine for conducting illegal inspections of business entities by officials or obstructing their lawful activities from 100 to 150 calculation indices.

Also, amendments have been made to the Criminal Procedure Code of the Kyrgyz Republic, which provide that when applying preventive measures against entrepreneurs and investors, the application of preventive measures such as electronic bracelets (electronic surveillance), bail or house arrest should be considered as a priority.

The Law comes into force after ten days from the date of its official publication.

On amendments to certain decisions of the Government of the Kyrgyz Republic and the Cabinet of Ministers of the Kyrgyz Republic in the field of licensing of construction activities

Amendments were made to the Resolution of the Government of the Kyrgyz Republic “On Approval of State Fee Rates” dated April 15, 2019, No. 159 and to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic “On Issues of Licensing of Certain Types of Activities” dated December 14, 2023, No. 678.

The above-mentioned decree changed the rates of state fee for issuance and re-issuance of licenses in construction activities, as well as optimized the procedures for issuance of licenses in the field of construction activities.

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

On measures for further development of the agro-industrial complex of the Kyrgyz Republic

The President of the Kyrgyz Republic S.N. Japarov signed the Decree “On measures for further development of the agri-industrial complex of the Kyrgyz Republic”. In accordance with the Decree, the Cabinet of Ministers of the Kyrgyz Republic was instructed to take measures to:

• Stimulate of association of farmers and support of large agricultural producers;
• attract investments and introduce of modern technologies in agriculture;
• improve of pasture lands and support of organizational production;
• simplificate the procedures and conditions for the development of the agri-industrial complex.

The decree also includes measures to improve food and agriculture security and increase the country’s export potential.

On amendments to the Civil Code of the Kyrgyz Republic

The law prohibits the use of words, terms and definitions of religious nature in the corporate name of legal entities.

At the same time, the exception is religious non-commercial organizations, whose charter does not set the main goal of profit-making, as well as legal entities provided for by the normative legal acts of the Kyrgyz Republic.

The list of words, terms, definitions of religious nature and the procedure for their use will be approved by the Cabinet of Ministers of the Kyrgyz Republic.

The law shall come into force ten days after the official publication date.

On ratification of the Financing Agreement between the Kyrgyz Republic and the International Development Association (World Bank) on the project “Development of sustainable agri-food clusters” and the Grant Agreement between the Kyrgyz Republic and the International Development Association (World Bank) on the project “Development of sustainable agri-food clusters”, signed on April 16, 2024 in the city of Washington”

The objective of the Project is to support the seed and breeding sector at the national level.

In accordance with the Agreements, the Project amount is US$35.0 million, of which US$30.0 million is under the Financing Agreement (for 12 years, interest rate – 0.0% per annum) and US$5.0 million under the Grant Agreement.

The project will support two agri-food clusters: dairy and horticulture clusters in Chui, Jalal-Abad and Naryn oblasts.