The unified tax in Kyrgyzstan is designed for small and medium-sized businesses, providing entrepreneurs with simplified accounting requirements and reduced tax burdens. This makes Kyrgyzstan an attractive location for business development, especially compared to other countries in the region.
Key Conditions of Application
The unified tax in Kyrgyzstan is available to a wide range of enterprises, including both sole proprietors (SP/IE) and legal entities. The key advantages of the system include:
- No turnover limit. Companies of any size can remain under the unified tax system.
- Flexible rates. Rates vary depending on the type of activity and form of settlement.
- Exemption for small businesses. Entrepreneurs with annual income up to 8 million KGS are exempt if they meet the following requirements:
- Use of cash registers (CCM).
- No more than two employees.
- Regular payment of social contributions.
Unified Tax Rates
The tax rates are adapted to various business activities.
| Activity Type | Cash Rate | Non-Cash Rate |
|---|---|---|
| Food services (Bishkek, Osh) | 6% | 4% |
| Food services (regions) | 4% | 2% |
| Sewing and textile production | 0.25% | 0.25% |
| Lotteries, saunas, baths | 8% | 8% |
| IT and software development | 4% | 2% |
| Residents of Creative Industries Park | 0.5% (until 2025) | 0.5% (until 2025) |
Additional trade rates:
- Microbusinesses on markets: 0.1%.
- Entities with turnover up to 30 million KGS: 0.5%.
- Entities with turnover from 30 to 50 million KGS: 1%.
This tax regime also applies to non-residents, including Russian citizens who open individual enterpreneur or LLC (OsOO) in Kyrgyzstan.
Reporting and Payment Deadlines
- Reporting deadline: unified tax reports must be submitted to the tax authority at the place of registration no later than the 20th day of the month following the reporting quarter.
- Payment deadline: tax is paid by the same date.
- Example: for Q1 (January–March), the tax return and payment must be completed by April 20.
Social Contributions for Sole Proprietors under Unified Tax
In Kyrgyzstan, SPs are required to pay social contributions (if they generate profit) regardless of the tax regime:
- General rate: 6% of the average monthly salary (AMS).
- Distribution:
- Pension Fund: 89.75%
- Health Insurance Fund: 10%
- Rehabilitation Fund: 0.25%
Statistical Reporting for SPs
Unlike tax reporting, statistical reporting for SPs is annual and minimal:
- Form №1-P (urgent): data on production, services, and employment.
- Deadline: annually by March 1 of the following year.
- Who files: SPs engaged in production, services, or trade.
Penalties for Non-Compliance
- Late tax reports:
- Individuals: 1,000 KGS.
- Entrepreneurs without legal entity status: 2,000–5,000 KGS.
- Failure to submit statistical data:
- SPs: 10 accounting indicators (~1,000 KGS, adjusted annually).
Businesses Ineligible for Unified Tax
Certain businesses are excluded:
- Financial companies, including banks.
- Stock market participants.
- Producers and sellers of alcohol and tobacco (except cafés).
- Mining and extraction companies.
High Technology Park (HTP)
The HTP was created to support export-oriented IT companies with a special legal and tax regime. In November 2024, President Sadyr Japarov signed a law making this regime permanent, enhancing its appeal for domestic and foreign IT firms.
Exemptions include:
- Sales tax.
- Corporate income tax.
- Value Added Tax (VAT).
- Personal income tax (PIT) reduced to 5% (instead of 10%).
Social contributions:
- For employees of HTP residents: 12% of AMS.
Creative Industries Park (CIP)
The CIP supports businesses in creative industries, offering unique tax incentives and preferences.
- Unified tax on revenue: 0.5% in 2023–2024, rising to 2% by 2027.
- Exemptions from: profit tax, sales tax, and VAT.
- Social contributions: set at 3,690 KGS.
SPs registered in HTP or CIP benefit from these tax and social reliefs, significantly reducing their financial burden and fostering growth.
Unified Tax: Comparison with Armenia and Georgia
| Country | Features (2024) | Main Limitations |
|---|---|---|
| Armenia | 1% Tax for IT, 10% tax on trade; 7% on production | Turnover up to 115m AMD |
| Georgia | 1% up to 500,000 GEL (Small Business); 0% IT | Exceeding limit increases tax |
| Kyrgyzstan | No turnover limit; flexible rates | Excise goods excluded |
Advantages of Kyrgyzstan
Compared to neighbours, Kyrgyzstan offers:
- No turnover restrictions, making the regime universal for both large and small businesses.
- Exceptionally low rates for sewing and IT sectors.
- Extra support, including tax exemptions for micro-entrepreneurs.
Thus, Kyrgyzstan provides one of the most business-friendly systems for entrepreneurs among Central Asian and Caucasus countries.
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