June 1997

IN FORCE AS OF JUNE 1997

1. THE FOLLOWING ARE THE CHANGES IN THE REGULATIONS ADOPTED AFTER MARCH 1995.

A). CUSTOMS TARIFFS ON EXPORTED WOOL AND COTTON WERE ANNULLED IN MAY, 1995.

B). CUSTOMS IMPORT DUTIES ON "TECHNOLOGICAL EQUIPMENT, RAW MATERIALS, CHEMICALS, PARTS AND UNITS, PREFABRICATED ITEMS WHICH ARE DESIGNATED FOR FURTHER INTERNAL MANUFACTURING WERE WAIVED IN AUGUST 1995.

C). IN OCTOBER 1995, EXCISE TAXES WERE NULLIFIED FOR IMPORTING DIESEL OIL, FUEL OIL AND OTHER OIL PRODUCTS (EXCEPT GASOLINE).

D). IN DECEMBER 1995 EXPORT DUTIES FOR CATTLE HIDES WERE ALSO NULLIFIED.

E). AT PRESENT, THERE ARE NO SIGNED DOUBLE TAX AGREEMENTS WITH ANY FOREIGN COUNTRY.

2. TAXES ON FOREIGN LEGAL ENTITY: JURIDICAL FOREIGN (NON-RESIDENT) PERSON'S TAXES:

-- VALUE-ADDED TAX (20% GOODS COST);
-- EXCISE TAXES (AUDIO AND VIDEO DEVICES - 20%, CARPETS - 35%, CRYSTAL - 30%, GOODS MADE OF GOLD - 10% CUSTOMS GOODS COST);
-- TAX ON PROFITS AND REVENUES OF ENTERPRISES (30% PROFITS);
-- HIGHWAY-USER TAX (0.8% GROSS INCOME);
-- ALLOCATIONS FOR PREVENTION AND LIQUIDATION OF EMERGENCY SITUATIONS (1.5% TURNOVER OR GROSS INCOME);
-- EXPORT AND IMPORT CUSTOMS DUTIES (10% CUSTOMS GOODS COST); -- WAGE FUND TAX (33% WAGE FUND IN STATE AND ENTERPRENEURSHIP SECTORS AND 23% IN COOPERATIVE AND AGRICULTURE'S SECTORS);
-- LAND TAX (RATES OF LAND TAX SHELL BE DEVELOPED BY GOVERNMENT AND APPROVED BY JOGORKU KENESH).

3. PHYSICAL FOREIGN (NON-RESIDENT) PERSON'S TAXES. RATES OF INCOME TAX ARE PROGRESSIVE ON THE MARGINAL SUMS:

A). ON THE FIRSTS 5-MULTIPLES OF MINIMUM ANNUAL SALARY -- THE TAX IS FIVE PERCENT.

B). THE MARGINAL RATE ON INCOME FROM 5 TO 15-TIMES MINIMUM ANNUAL SALARY IS TEN PERCENT.

C). THE MARGINAL RATE ON INCOME FROM 15-25 TIMES ANNUAL MINIMUM SALARY IS FIFTEEN PERCENT.

D). THE MARGINAL RATE ON INCOME FROM 25-35 TIMES ANNUAL MINIMUM SALARY IS TWENTY PERCENT.

E). THE MARGINAL RATE ON INCOME FROM 35-45 TIMES ANNUAL MINIMUM SALARY IS THIRTY PERCENT.

F). OVER 45 TIMES ANNUAL MINIMUM SALARY IS FORTY PERCENT.

PHYSICAL FOREIGN PERSON IS EXEMPT FROM INCOME TAX, IF ONE WORKS IN THE ORGANIZATION WHICH HAS SPECIAL AGREEMENT WITH KYRGYZ GOVERNMENT (AMERICAN EMBASSY, IMF AND SO ON).

4. A NEW SYSTEM OF VALUE-ADDED TAX (VAT) FOR IMPORT GOODS WAS PUT INTO EFFECT BY KYRGYZ GOVERNMENT DECREE FROM JULY 1, 1996. TAX IS FOR IMPORTS ENTERING FROM NON-CIS COUNTRIES, WHEN ENTERING GOODS WERE NOT PROCESSED BY CIS CUSTOMS BEFORE ARRIVAL. THIS TAX IS COLLECTED FROM ANY LEGAL ENTITY AND PHYSICAL PERSON.

IMPORTS FROM CIS WILL NOT HAVE A VALUE-ADDED TAX.

THE FOLLOWING ARE EXEMPT FROM VAT TAX RELIEF OF:
-- DELIVERIES OF GOODS FOR NATURAL DISASTERS;
-- GOODS ENTERING KYRGYZSTAN ERRONEOUSLY;
-- GOODS FOR OFFICIAL (DIPLOMATIC, CONSULAR, REPRESENTATIVE) AND PERSONAL PURPOSES;
-- GOODS IMPORTED AS BASIC MEANS OF PRODUCTION OR PURCHASED ON CREDIT;
-- HUMANITARIAN AID;
-- TRANSIT.

THE VAT WILL BE ACCOUNTED IN THE CURRENCY, IN WHICH THEIR VALUE IS DECLARE. AS MAXIMUM, FEES FROM DECLARED COST OF GOODS MAY INCLUDE:
-- 20% FOR VAT;
-- 0.15% FOR PROCESSING DOCUMENTS;
-- 10% FOR CUSTOMS DUTIES.

5. ON OCTOBER 28, 1996 KYRGYZ REPUBLIC GOVERNMENT ISSUED A NEW DECREE ABOUT CUSTOMS STAMPS FOR IMPORTED, PACKAGED TEA SOLD ON THE CUSTOMS TERRITORY (EXCEPTING FREE ECONOMIC ZONES)OF KYRGYZ REPUBLIC.

A). THE CUSTOMS STAMPS FOR IMPORTED, PACKAGED, SOLD ON THE CUSTOMS TERRITORY (EXCEPTING FREE ECONOMIC ZONES) OF KYRGYZ REPUBLIC WILL BE REQUIRED FROM JANUARY 1, 1997.

TEA DELIVERIES TO THE CUSTOMS TERRITORY OF KYRGYZ REPUBLIC WITHOUT THESE STAMPS WILL BE PROHIBITED FROM DECEMBER 1, 1996, EXCEPT LOOSE TEA FOR PACKAGING.

B). THE MARKET PARTICIPANT CAN SELL TEA WITHOUT OF CUSTOMS STAMPS UNTIL JANUARY 1, 1997. AFTER THAT TIME KEEPING AND SELLING TEA WITHOUT STAMPS WILL BE PROHIBITED.

C). KYRGYZ STATE CUSTOMS COMMITTEE WILL EXECUTE THIS DECREE.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)