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EEC to watch over Kyrgyzstan to return VAT on flour

The Eurasian Economic Commission will monitor Kyrgyzstan to return of VAT to flour. This was stated at the next meeting of the EEC Collegium.

It considered the issue of eliminating the next barrier in the internal market of the EEU. The Law of Kyrgyzstan of January 26, 2016 provides that grain imported by the importer into the country for self-processing is exempt from value added tax, and the delivery of flour produced directly by the importer himself from grain that was released upon import from taxation is a supply exempted from value added tax.

«At the same time, flour produced made in the EEU states and supplied to the market of Kyrgyzstan is subject to taxation in the territory of Kyrgyzstan at the rate of value added tax of 12 percent. This leads to unjustified discrimination with regard to flour produced in other states of the union, and is a hidden form of restriction of mutual trade,» the report said.

Kyrgyzstan promised to abolish the preferential tax treatment for domestic flour producers before the end of the year. In this regard, the EEC postponed the decision on the issue and will monitor the changes in the country’s tax legislation.

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