KYRGYZSTAN TODAY Policy briefs on - Department of Geography

and property at its balance-sheet value, as well as costs incurred as a result of works or
services provided to CO on a gratuitous basis within one taxation year. This amount
should not exceed 10 percent of taxable income, provided that these assets were not
used for the benefit of the physical entity that transferred them.
3. Justification for reducing annual income of physical and legal entities are copies of
the CO Certificate and a written document confirming the transfer of assets for the benefit of
this CO (cash payment receipt, payment order, property delivery-and-acceptance act, etc).
4. Donations exceeding the permitted amount of taxable income to be reduced one
fiscal year can be reserved for coming years and deducted from taxable income of taxpayers
within five years.
5. In cases when physical entities have to fill out an income statement, they can use
the benefit of deducting donations from their taxable income when filling out the income
statement. In this case, a copy of CO Certificate and a receipt from CO confirming that this
CO received a donation from the physical entity has to be attached to its income statement.
6. Physical entities whose income tax is deducted and transferred to the state budget
by their source of income payment (i.e. individuals working based on work contracts or
those receiving interest rates on bank deposits or securities) can use tax reduction from
donations to COs as follows:
(1) submitting a request to the source of income payment about transferring some
of their income to a CO as a donation on their behalf and deducting this amount
from their taxable income. A copy of the CO Certificate should be attached to the
request letter. The request letter should contain the name of CO that will benefit
from this donation, the purpose of the donation (not required), and the size of
the donation. The physical entity’s source of income payment should transfer the
appropriate amount of money as a donation on behalf of this physical entity and
deduct this amount from their taxable income as specified in this Code.
(2) transferring the donation to a CO in cash and submitting a request to the source
of income payment about deducting this amount from their taxable income. A
copy of CO Certificate should be attached to the request letter. The request letter
should contain the name of a CO that will benefit from this donation, purpose of
the donation (not required), and the size of the donation. Based on the request
letter and other attached documents, the source of income payment has to recalculate
the amount of taxable income to be transferred to the budget in the
reporting period and deduct the amount equal to the size of the donation as
specified in this Code.
7. VAT paid by legal entities and individual entrepreneurs for the supply of all
goods, works and services to COs on a gratuitous basis should be registered as if it were
a regular commercial supply.
8. Legal entities are exempt from property tax provided this property was given to
the CO on a gratuitous basis.
9. Physical entities are exempt from property tax and land tax provided this property
or land were given to CO to be owned or to be used on a gratuitous basis.
Article 400. Exemption of physical entities from tax on any income received from
the state or NPO in the form of assistance or compensation for being
involved in non-commercial activities
The following types of income received by physical entities are not included in the
total taxable income when calculating their income tax:
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