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| Irina Lopatina |
On June 22 2017, the parliament of Kyrgyzstan approved the
bill ratifying the tax treaty signed with Georgia on October 13
2016. Currently, the ratification from the Georgian side is
still pending, and in order to become law and to be ratified,
the bill still needs to be signed by the presidents.
The 2016-signed treaty covers taxes on income and profit
taxes. In the case of Georgia, these would be the profit tax
and income tax, while in Kyrgyzstan the income tax on
individuals and tax on income and profits of legal persons. The
agreement will also be applicable to similar taxes that may be
imposed at a later stage, on the condition that the signatory
parties notify each other about the tax changes introduced.
Permanent establishments (PEs) are deemed to arise when a
building, construction site or an installation project or
related supervisory activity lasts for more than six months.
Additionally, a PE also includes a place of management, a
branch, an office, a factory, a workshop or a mine or oil/gas
well.
In terms of withholding tax rates, dividends are to be taxed
at 5% of the gross amount of the dividends if the beneficial
owner holds at least 25% of the capital of the company paying
the dividends and 10% of the gross amount of the dividends in
all other cases. The withholding tax rate for interest has been
set at 5%, while for royalties at 10%.
Once the double tax agreement enters into force its
provisions shall have effect in respect of taxes withheld at
source on or after the first day of January of the year
following the one during which the agreement enters into
force.
Irina Lopatina (irina.lopatina@eurofast.eu),
Tbilisi
Eurofast Global
Tel: +995 322180310
Website: www.eurofast.eu