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 |
| Indonesia | Mar 2020 | TBC | E-commerce | ||
| Laos | Feb 2024 | TBC | Streaming; ad's; travel & hotel online | ||
| Nepal | Jul 2022 | 2% | NPR 2m | Electronic & digital services | |
| New Zealand | Jan 2025 | 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 |
| Taiwan | Jan 2017 | WHT Digital and electronic services | |||
| Vietnam | Jan 2021 | 1.5% | Ecommerce tax WHT | ||
