ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of May 15, 2012 No. 298

About approval of the Regulations on procedure for application of agreements (conventions) on avoidance of double taxation and the prevention of tax avoidance on the income and the capital (property) concluded by the Kyrgyz Republic with foreign states

According to article 3 of the Tax Code of the Kyrgyz Republic, Article 5 of the Customs code of the Kyrgyz Republic, for the purpose of elimination of double taxation of the income and the capital between the finishing speaking parties on the basis of agreements the Government of the Kyrgyz Republic decides:

1. Approve Regulations on procedure for application of agreements (conventions) on avoidance of double taxation and prevention of tax avoidance on the income and the capital (property) signed by the Kyrgyz Republic with foreign states according to appendix.

2. Operation of this Resolution is applied since January 1, 2011.

3. Publish this Resolution in mass media.

Appendix

Approved by the Order of the Government of the Kyrgyz Republic of May 15, 2012 No. 298

Regulations on procedure for application of agreements (conventions) on avoidance of double taxation and prevention of tax avoidance on the income and the capital (property) signed by the Kyrgyz Republic with foreign states

1. This Provision determines procedure for implementation of agreements (conventions) on avoidance of double taxation and prevention of tax avoidance on the income and the capital (property) signed by the Kyrgyz Republic with foreign states (further - Tax agreements), regarding elimination of double taxation of the income or property, receipt of privileges and protection of resident of the contracting state against the discrimination taxation in other contracting state.

2. Tax agreements are applied to taxes on the income and the capital (property), depending on conditions of the specific Tax agreement. In the Kyrgyz Republic such taxes are the income tax, the income tax and tax on income of the foreign organization gained from source in the Kyrgyz Republic which is not connected with permanent organization in the Kyrgyz Republic.

3. The above-stated taxes include tax on total income and on income elements, on the general capital and on capital elements; tax on the income from alienation of personal and real estate, capital gain tax; the income tax from the salary or the salaries paid by the companies. Assignments from salary fund are not considered as taxes on the total amount of the salary.

4. In case of change of the tax legislation in one of contracting states, the Tax agreement is applied to all identical or to significantly similar taxes which are levied after signature date of the Tax agreement, in amendment or instead of the taxes which are earlier stipulated in the Tax agreement.

5. The status of residence of this or that person in the Kyrgyz Republic is determined according to the Tax code of the Kyrgyz Republic.

6. The term "resident of the contracting state" following from the Tax agreement means any person who according to the legislation of this state is subject in it to the taxation because of its permanent residence, the permanent residence, the management place, or by other criteria of similar nature, and also includes this state and its any administrative division or regional authority.

Are not residents of person which are subject to the taxation in the contracting state only concerning the income from sources in this contracting state or the capital (property) which is in it.

7. If the resident of the contracting state gains income or owns property (capital) which, according to provisions of the relevant Tax agreement, are assessed with tax in other contracting state, the first mentioned state will allow:

To subtract 1) from tax on the income of this resident the amount equal to the tax paid in this contracting state;

To subtract 2) from the property tax (capital) of this resident the amount equal to the property tax (capital).

These deductions, anyway, shall not exceed the amounts of taxes on the income or property (capital) which would be accrued on such income or property (capital) on the tax rates operating in this contracting state that is taxes on the income and the property (capital) counted before provision of deduction.

8. If, according to provisions of the relevant Tax agreement, the gained income or property (capital) of resident of the contracting state are tax-exempt in this contracting state, it can consider, nevertheless, in case of calculation of the amount of taxes on other part of the income or property (capital) of resident of the contracting state the amounts of its income or property (capital) exempted from the taxation.

9. Registration of resident of the contracting state shall be for tax purposes performed according to the tax legislation of the Kyrgyz Republic.

10. For provision of the tax benefits provided by the relevant Tax agreement, the resident of the contracting state which is performing activities in the Kyrgyz Republic without formation of permanent organization and having the right to tax benefits according to provisions of the Tax agreement signed by the Kyrgyz Republic with the state which resident it is shall provide to territorial Tax Service of the Kyrgyz Republic in place of registration of person paying the income, the statement in the form given in appendix 1 to this Provision.

The specified application form is filled in according to procedure according to appendix 2 to this Provision.

11. The resident of the contracting state shall submit contracts, constituent documents - for receipt of tax benefit according to dividends, percent and royalty.

If necessary, the relevant territorial authority can request the additional information.

The resident of the Kyrgyz Republic paying the income shall submit accounting documents (invoices, settlement and payment, bank and other documents) in which the facts of making of trading activities are reflected.

12. If the foreign company has the right to the privileges provided by provisions of the Tax agreement signed by the Kyrgyz Republic with the state which resident is this foreign company it, for the purpose of return of paid amounts of tax, shall provide to territorial tax authority of the Kyrgyz Republic in place of registration of person which paid the income, the statement in the form given in appendix 3 to this Provision.

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