Simple Tax Guide for Americans in Kyrgyzstan
US Expat Taxes - Kyrgyzstan
At Taxes for Expats we have been preparing U.S. tax returns for U.S. Citizens and green card holders working in Kyrgyzstan for over 3 years. Our clients mainly work in Bishkek and the military base in Manas.
As a U.S. Citizen or green card holder you are legally required to file a U.S. tax return each year regardless of whether you already pay taxes in your residence country.
We offer professional tax services. That means we figure out the best and most optimal way to file your U.S. tax return and avail you of all possible exclusions and deductions. But just as importantly - avoid the errors that would allow IRS to disallow your return and levy fines & penalties on top. You can also do them yourself - not that we recommend it. For more information please see IRS.
The expatriate Foreign Earned Income Exclusion can only be claimed if you file your tax return on a timely basis. It is not automatic if you fail to file and can even be lost.
As an expat living abroad you get an automatic extension to file until June 15th following the calendar year end. (You cannot file using the calendar year as is standard in Kyrgyzstan for U.S. tax purposes). You must, however, pay any tax that may be due by April 15th in order to avoid penalties and interest. You can get an extension to file (if you request it) until October 15th.
There are other forms which must be filed if you have foreign bank or financial accounts; foreign investment company; or own 10% or more of a foreign corporation or foreign partnership. If you do not file these form or file them late, the IRS can impose penalties of $10,000 or more per form. These penalties are due regardless of whether you owe income taxes or not
We have helped hundreds of expats around the world catch up with their past U.S. taxes because they have failed to file U.S. tax returns for many years. This is, in fact, our specialty and we offer a 10% discount to clients to wish to file multiple tax returns at once and get in full compliance with the IRS.
Work with a recognized expert to help you prepare your American tax return. We can also provide tax planning and advice with other expatriate tax and legal concerns; we look forward to working with you.
Below we include information on the Kyrgyz Tax System for the American Expatriates.
The taxation policy on the territory of the Kyrgyz Republic is carried out by the government of the Kyrgyz Republic. Taxes are imposed by Jogorku Kenesh of the Kyrgyz Republic and local state administration bodies in accordance with the legislation. The unified application of tax legislation is ensured by the Ministry of Finance of the Kyrgyz Republic. The Tax Law of the Kyrgyz Republic has been effective since June 26, 1996. It is a code of laws concerning all taxes, their administration, and tax activities of taxpayers on the territory of the Kyrgyz Republic except customs duties, customs fees and payments regulated by the customs legislation.
The statements of the Tax Code are applied to all taxes coming into effect under this Code. The basic excise tax rates are specified by the Law of the Kyrgyz Republic of July 8, 1999 and March 24, 2001 On the Basic Excise Tax Rates on the Commodities that are Subject to Excise and Are Imported or Produced by Legal and Physical Persons in the Kyrgyz Republic.
Types of taxes and fees in the Kyrgyz Republic
- The following types of taxes and fees shall be imposed in the Kyrgyz Republic: national taxes and fees and local taxes and fees.
- National taxes and fees shall be recognized as taxes and fees established by this Code and payable in a compulsory way throughout the territory of the Kyrgyz Republic.
- Local taxes and(or) fees shall be recognized as taxes and fees established and introduced pursuant to this Code through the normative legal acts passed by the Local Keneshs and subject to compulsory payment in the territories of respective territorial and administrative units.
National taxes and fees shall include:
1) Personal Income Tax;
Income tax (paid by natural persons in percentage terms according to sum of annual taxable income). At annual taxable income up to 50 minimal salaries rate of tax is 10 % from sum of income, at income over 50 minimal salaries rate of tax is rate from 50 minimal salaries plus 20 % of sum exceeding it. If your activity is production or retail trade of consumer goods, or it is related to consumer services or agriculture, you could choose fixed form of income tax payment, that is you could buy patent. Cost of patent depends on kind of activity and it granted for a fixed period from 15 days to 1 tax year.
2) Profit Tax -tax on profit and revenue of enterprises ; (paid by juridical persons).
Profit tax is calculated by rate of 10 % from income, which is estimated as difference between total return and payments set by Tax Code.
3) Value Added Tax;-(20 percent of the value of taxable goods);
VAT is applied to imports entering from non-CIS countries when the goods entering the country were not processed by customs of another CIS country before reaching Kyrgyzstan. This tax is collected from any legal entity and physical person. Imports from CIS countries are not subject to VAT. Various goods are exempt from VAT, including disaster relief, 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, and transit goods.
Maximum fees, based on the declared value may include:
--VAT: 20 percent;
--processing documents: 0.15 percent;
--customs duties: 10 percent.
4) Excise tax;
-audio and video devices: 20 percent;
carpets: 35 percent;
crystal: 30 percent;
goods made of gold: 10 percent;
5) Land tax; (rates of land tax shall be developed by government and approved by Parliament)
6) Mineral tax;
7) Road tax; (0.8 percent of gross income)
8) Contributions to the Fund for Prevention and Liquidation of Emergency Situations; (1.5 percent turnover or gross income)
9) Tax payable by the owners of vehicles
10) Real property tax;
11) Tax on sales and on services provided to physical persons.
Individuals are exempt from income tax if they work for an organization which has a special agreement with the Government of Kyrgyzstan (such as a foreign embassy).