Kyrgyzstan announced that it imposes a special tax on institutions and organizations dealing with crypto money mining. With the new law, income tax, sales tax and VAT will be paid under the name of mining tax.
Kyrgyzstan said that it would be more appropriate to collect income tax, VAT and sales taxes from individual or corporate miners under a single roof. The tax in question will be collected in accordance with the law adopted on 1 August 2020.
Scope and Rate of the New Tax
According to the laws of Kyrgyzstan, users are obliged to pay taxes for all consumer products that are taxable in crypto money mining. Individuals or institutions that mine cryptocurrency will now pay crypto mining tax for electricity spent during mining activities. This tax will only cover the amount of electricity consumed in mining. The tax rate was determined as 15 percent by the Kyrgyz Tax Office.
In its statement, Kyrgyzstan stated that high-level software and hardware should be used in the operation of platforms where blockchain technology is used and crypto money activities take place. Especially the uninterrupted power supply required for crypto money mining is an issue that is meticulously focused on tax for Kyrgyzstan.
Kyrgyzstan Cut Off Some Crypto Companies’ Power
The Kyrgyz government had cut electricity from 45 crypto mining firms due to its high consumption rate. In the cut made in September 2019, it was announced that a total of 136 megawatts of electricity was consumed. It was said that this rate is higher than the total electricity consumption in Issyk-Kul, Talas and Naryn regions of Kyrgyzstan.