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Cryptocurrency mining tax to replace three taxes in Kyrgyzstan

A special tax regime is introduced in Kyrgyzstan for entities operating in the field of cryptocurrency mining in accordance with the law dated August 1, 2020. The State Tax Service of the republic reported.

It is determined that cryptocurrency mining is an activity requiring provision of continuous power supply to carry out computing operations using software and hardware that ensure functioning of the ledger of transaction blocks (blockchain) by entering information about transactions between users into the distributed ledger.

Cryptocurrency mining can be accompanied by creation of a virtual asset, which comes into the possession of a person performing the mining as a reward for confirming transactions in the distributed ledger.

«When carrying out this activity, organizations and individual entrepreneurs are obliged to pay cryptocurrency mining tax instead of income tax, VAT on taxable supplies and sales tax. The tax base for cryptocurrency mining is the amount charged for electricity consumed during mining, including VAT and sales tax. The tax rate is set at 15 percent,» the Tax Service stressed.