The State Tax Service of the Kyrgyz Republic has announced that trading under a patent will remain valid until July 1, 2024. Subsequently, entrepreneurs currently operating under patents are encouraged to transition to more suitable tax regimes.
These options include the general tax regime, which entails payment of taxes based on prevailing tax legislation and rates, or a simplified taxation system featuring a single tax. Under the simplified system, tax rates range from 0% for annual turnovers up to 15 million soms, to 1% for turnovers up to 50 million soms.
For markets and mini-markets, a single tax rate of 0.1% applies if annual revenue remains under 100 million soms. Traders operating under the single tax system, except those in markets designated as strategic, will need to utilize cash registers and pay insurance premiums.
Kyrgyzstan’s largest markets, including “Dordoi” and “Turataly el Bazars” (“Kara-Suu”), are considered strategic, requiring entrepreneurs to adhere to a special tax regime. This regime, replacing income tax, sales tax, and VAT, applies specifically to the sale of goods, excluding excisable items or those necessitating special licenses or permits. Sellers in these markets are exempted from using cash registers, electronic invoices, and consignment notes within trade zones under the special regime. However, sales of goods outside these zones must comply with tax legislation regarding invoicing.
Recall that since late November 2023, market traders across Kyrgyzstan have staged rallies opposing the new tax regime, particularly the complete abolition of patents. In response to protests, President Sadyr Japarov decided to postpone the abolition of the patent system for trading entrepreneurs until July 1, 2024, following a demonstration by retail sellers at the major metropolitan market “Dordoi”.
