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Kyrgyz Republic 2% Digital Services Tax

January 2022 launch for turnover tax on foreign digital giants

The Central Asian state of  the Kyrgyz Republic (Kyrgyzstan) has introduced a 2% Digital Services Tax (DST) on resident providers (Kyrgyz IP address) of digital services. The replaces VAT liability. Foreign digital service providers are still subject to Kyrgyzstan VAT.

The turnover tax applies to B2B and B2C sales of goods and digital or electronic services including exclusive rights to intellectual property.

Kyrgz choice bucks global trend on OECD tax settlement

Other Central Asian states have instead opted to impose VAT, including: Uzbekistan, Tajikistan and Kazakhstan.

Once DST registered, taxpayers will complete quarterly returns to declare and pay the 2% tax.  This is due by the 20th of the month following the quarter end.

DST taxes were first introduced by a number of countries two years ago to tax the turnover of foreign digital companies which fell outside of the normal corporate income tax net. However, most have been suspended following the 2021 OECD inclusive framework agreement on the right to tax foreign companies and global minimum tax rate.

Asia Pacific Digital Services Taxes (DST)

Country Status Rate Annual sales threshold Scope
In-country income Global income
India Jun 2016 6% Rs 2cores n/a Advertising
India Apr 2020 2% INR 20m n/a Goods and digital services sellers and facilitating marketplaces
Indonesia Mar 2020 TBC E-commerce
New Zealand Proposed 2-3% NZ$3.5m NZ$1.1bn Social media; Content sharing; Search engine; user data; Intermediation;
Pakistan Sep 2021 2% Nil Nil Withholding tax on marketplaces
Kyrgystan Jan 2022 2% Nil Nil Tax on digital services B2B and B2C
Sierra Leone Jan 2021 1.5%
Vietnam 2021 TBC 1.5% Ecommerce tax on marketplace revenues

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