On July 11, 2023, the EEC Board recognized the barrier that operated in the Kyrgyz Republic with respect to agricultural machinery produced in the EAEU countries as eliminated, press service of the Ministry of Trade and Integration reports.
The effect of the barrier was that when buying agricultural machinery produced in Kyrgyzstan, Kyrgyz farmers were granted VAT exemption.
Thus, Kazakh enterprises producing agricultural machinery, in order to be exempt from VAT on the territory of Kyrgyzstan, had to supply goods whose customs value is less than 500,000 soms (about 2.6 million tenge).
At the same time, Kyrgyz enterprises were exempt from VAT without such conditions.
In 2021, at the initiative of the Republic of Kazakhstan, these actions of the Kyrgyz Republic were recognized by the EEC Board as a barrier in the internal market of the EAEU.
In 2022, the Kyrgyz Republic took a number of measures to eliminate this barrier.
However, according to the Kazakh side, the measures taken were not sufficient to eliminate unequal taxation conditions for agricultural machinery produced in the Kyrgyz Republic and other EAEU countries. The barrier was still there.
By Law No. 78 of April 3, 2023, Kyrgyzstan amended the Tax Code of the Kyrgyz Republic, which excluded restrictions on the cost of agricultural machinery produced in the EAEU countries, and also provided official explanations.
Following a series of consultations at the EEC site with the authorized bodies of the ECO member states, the parties agreed to recognize the barrier eliminated.
Now agricultural machinery produced in the Republic of Kazakhstan and other EAEU member states has the same conditions as Kyrgyz and receives VAT exemption when delivering such equipment to Kyrgyzstan.
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