In 2025, the corporate income tax in the Kyrgyz Republic remains one of the simplest and most competitive in the region. The standard rate stays at 10% for local companies and foreign entities operating through a permanent establishment. This rate is fixed in the Tax Code of the Kyrgyz Republic.
Historically, the 10% rate is a deliberate policy choice to make Kyrgyzstan attractive for small and mid-sized international businesses. According to OECD Corporate Tax Data 2025, the global average corporate tax rate exceeds 23%, while Kyrgyzstan maintains one of the lowest profit tax burdens in Asia.
Who Pays Corporate Income Tax
Taxpayers include:
- local legal entities (LLC, JSC, institutions);
- foreign companies operating through a permanent establishment;
- non-residents receiving Kyrgyz-source income.
If you registered a company remotely or through a consulting service, you automatically become a corporate taxpayer. This makes early tax planning essential — especially when choosing between the general tax system and the simplified tax regime.
To compare regimes, many entrepreneurs use the unified tax system and general regime side by side when determining long-term strategy.
Corporate Income Tax Rate: Standard and Reduced Rates
- 10% — standard rate for most companies, including foreign branches.
- 0% — for priority industries and major investment projects included in state programs until 2031.
- 1–2% — for residents of special economic regimes such as the
High Technology Park (HTP)
and
Creative Industries Park (CIP).
These reduced rates are part of the government’s strategy to increase competitiveness and stimulate export-oriented sectors. Independent assessments, e.g. World Bank investment climate reviews, confirm the role of such incentives in attracting foreign investors.
What Is Taxed: The Object of Corporate Income Tax
The tax base is profit — total income minus documented expenses.
Taxable income includes:
- revenue from goods and services;
- non-operating income (interest, penalties, FX differences);
- property received free of charge.
Deductible expenses include:
- costs directly related to business activities;
- depreciation, salaries, rent, travel and transportation costs;
- loan interest (if properly documented).
Unlike many neighboring countries:
- Kyrgyzstan does not apply thin capitalization rules for interest;
- losses may be carried forward for five years, making the system flexible for new companies and capital-intensive businesses.
Relation to Simplified Tax Regimes
Many entrepreneurs choose the alternative: a turnover-based tax of 2–6%, which is easier to administer. According to KGAccount data, these rates apply without turnover limits and suit businesses with low operating expenses.
The general 10% profit tax is more advantageous if:
- you have high production or acquisition costs;
- you export goods or services;
- you want to carry forward losses;
- you intend to receive dividends and use DTT (double taxation treaties).
For exporters and IT companies applying for a tax residency certificate, the general regime often minimizes the total tax burden during cross-border settlements.
Special Regimes for IT and Creative Industries
In 2025, preferential tax treatment continues for companies operating within HTP and CIP:
- corporate income tax is replaced by a 1–2% turnover tax;
- exports of IT and creative services are exempt from VAT.
Example:
An IT company registered through the IT-company incorporation service pays only 1% of revenue, even if profit margins exceed 50% — making it one of the most attractive regimes in the CIS.
Corporate Income Tax for Non-Residents and Branches
Foreign companies operating in Kyrgyzstan through a branch or representative office pay 10% on net profit.
If income is transferred abroad to the parent company, withholding tax may apply — potentially reduced under double taxation treaties.
Branches must have a local legal address and submit reports to the tax authorities. For compliance, maintaining proper records with professional support — e.g., through accounting services — is strongly recommended.
Losses may be carried forward for five years. Standard deductions (salaries, rent, depreciation, interest) apply. Non-deductible items include undocumented expenses, excessive representation costs, and penalties.
Comparison with Neighboring Countries
Based on OECD and Tax Foundation data:
- Kazakhstan — 20%
- Uzbekistan — 15%
- Kyrgyzstan — 10%
This positions Kyrgyzstan among the most tax-friendly jurisdictions in Central Asia.
How to Pay Corporate Income Tax
- Register a company — for example, incorporate an LLC in Kyrgyzstan via the
company registration service. - Choose your tax system — general or simplified regime.
- Maintain bookkeeping and file regular reports.
- For cross-border payments, obtain a tax residency certificate.
- Track VAT thresholds and advance payments.
- Keep primary documents for at least five years.
Common Mistakes
- Confusing profit tax with personal income tax.
- Lack of documentation for expenses.
- Applying the 0% rate without qualifying for industry criteria.
- Ignoring double taxation treaties when making foreign payments.
- Misunderstanding turnover vs. profit tax obligations.
Frequently Asked Questions (FAQ)
What is the corporate income tax rate in 2025?
10% for all organizations, including foreign branches.
Can a company pay less?
Yes — 0% for investment projects and 1–2% for residents of HTP or CIP.
Can I switch to a turnover-based tax?
Yes — at 2–6% within the simplified regime.
Can losses be carried forward?
Yes — for five years.
Does Kyrgyzstan have DTTs?
Yes — with more than 30 countries, including Russia, Kazakhstan, Germany, and the UAE.
Expert Summary
Corporate income tax in Kyrgyzstan is one of the most transparent and flexible systems in Central Asia. Companies may choose:
- 10% on profit,
- 2–6% on turnover,
- 0–2% preferential rates for innovative industries.
Proper bookkeeping, regime selection, and timely documentation are essential — especially for non-residents and exporters. For IT, fintech, and service companies, Kyrgyzstan remains one of the most attractive jurisdictions in the region.