Kyrgyzstan introduces E-Commerce Tax
Kyrgyzstan introduced an e-commerce tax to cover sales of digital services from non-resident digital businesses on January 1, 2022.
Kyrgyzstan has become the latest Central Asia state to change its tax rules when it comes to digital services supplied by non-resident digital businesses.
The taxation of digital services, specifically those sales supplied by non-resident businesses, has gathered pace in Central Asia in recent years. With this introduction, Kyrgyzstan is the latest Central Asia jurisdiction to change its tax rules as they seek additional sources of revenue. Others to do so include its neighbours Uzbekistan (where VAT-related rules are live since January 1, 2020); Tajikistan (VAT rules live since January 1, 2021), and Kazakhstan where new VAT rules also come into effect on January 1, 2022.
It should be noted that Kyrgyzstan is taking a different direction with its plans for an e-commerce tax on digital services. It is, for example, more so a type of Digital Services Tax (DST), at a rate of 2%.
The Kyrgyzstan government gathered feedback on the new tax rules via a public consultation. The effective date of January 1, 2022, means it is a tight compliance window for non-resident businesses. Originally, there was to be a transition period but this was removed from the final draft of Kyrgyzstan’s new e-commerce tax rules.
Acknowledgement: With thanks to the team at GRATA International, Bishkek, Kyrgyzstan, for their help in compiling the information in this article.