Information sheet. General Taxation
Basic principals of taxation in Kazakhstan for Foreign Investors.
Kazakhstan taxation authorities register foreign individuals in the following cases:
- opening of the accounts in banks being tax residents of Kazakhstan
- acquisition of income from Kazakhstan source non-taxable from source of payment in Kazakhstan
- acquisition of tax resident status.
Registration:
- of department of non-resident entity through a branch or representative office registration is performed based upon data of national registers of identification numbers, i.e. automatically after registration in justice authorities;
- of non-resident entity conducting its business in Kazakhstan through permanent agency without opening a branch, representative office – in taxation authorities by the place of location of permanent agency.
The non-residents are subject to taxation with regard to income from Kazakhstan sources only, irrespective of the place of payment.
As a rule, income is considered earned from Kazakhstan source if it is paid for works (services) performed (rendered) in Kazakhstan or income earned from a resident or non-resident acting in Kazakhstan through permanent agency. Kazakhstan source income includes interest, dividend and royalty return among other things.
Foreign individuals are deemed to be residents if they stay in the country for at least 183 days in any 12-month period which ends in the current tax period.
Double taxation treaties may indicate different rules to define resident status.
Taxes in Kazakhstan (General taxation).
Business activity of a foreign investor is commonly subject to the following taxes:
- Corporate income tax (CIT);
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CIT rates: |
CIT payers |
The tax period |
Procedures |
Exceptions |
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20% commonly |
Usually all kazakhstani legal entities including foreign residents conducting business. activity in KZ |
a kalendar year January-December |
CIT declaretion shall be submitted no later than March 31 for the last tax period. CIT payments shall be paid in advance only for large business which total annual NET income exceed 644,150 thousand KZT for 2015. |
There is a wide range of exceptions when taxable income is reduced. The exemptions provided below. |
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15% for passive income |
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10% for activity related to agricultural products |
- Individual income tax (IIT);
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IIT rates: |
IIT payers |
The tax period: |
Procedures |
Exceptions |
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for dividend income 5% |
1) individual payers (f.ex.employees) having taxable income trough a tax agent (f.ex.employer); |
for a tax agent – a calendar month; No IIT advance payment |
IIT deduction from payment source is made for: employee’s income; income of an individual from a tax agent; pension payment from saving pension funds; dividend, fees, winnings; scholarships; income under saving insurance contracts |
The exemptions of income relieved from IIT provided below. |
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for other income 10% |
2) self-declarations. |
for self-declared income – a calendar year. No IIT advance payment |
Payment of tax from self-declared income is diclared by a taxpayer on its own |
- Mineral extraction tax (MET);
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Tax rate on mining |
The tax period: |
Procedures |
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1) on crude oil, including gas condensate, natural gas are established in fixed terms depending on the volume of annual oil production. 2) in case of sale and (or) transfer of crude oil and gas condensate in the domestic market of the Republic of Kazakhstan, the reduction factor of 0.5 is applied to the established rates. 3) on all kinds of minerals and mineral raw materials extracted from the non-commercial reserves of the deposit are paid at the rate of 0 per cent. 4) tax rates on mining rare and rare earth metals (lithium, beryllium, tantalum, yttrium, strontium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium) are established by the Government of the Republic of Kazakhstan. |
A calendar quarter |
The tax declaration on minning shall be submitted to the tax authority not later than 25th day of the second month following the tax period. |
- Tax on excess profit;
Subsoil users under each unique contract on subsoil use are taxpayers on excess profit. The exceptions are the contracts on subsoil use of common minerals and underground water. The tax object: the part of exceeding NET income. The tax period is a calendar year January-December.
- Value added tax (VAT);
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VAT rates: |
Payers |
The tax period: |
Procedures |
Exceptions |
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12% on taxable sales; 0% on the list of goods/services provided below. |
persons registered by VAT in Kazakhstan, including individual enterpreneurs, all resident legal entities, branch and representative offices, trust managers under the trust agreements and persons importing goods according Custom Law. |
a calendar quarter. VAT declaretion shall be submitted for each tax period (quarter) |
VAT registration is compulsory in case of sales turnover exceeding 59 460 000 KZT (for 2015) per year. Expenses generating VAT are deductable from the tax base. |
The exemptions of income relieved from VAT provided below. |
- Land tax from legal entities;
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The tax rate |
The taxpayers |
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Depending on the land quality and pourpose of use. The tax rate defined by hectar or square meter. |
Legal entities owned and/or permanentally used a plot of land area. |
- Property tax from legal entities and individual entrepreneurs;
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Rates: |
Payers: |
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1,5% of the tax base |
for legal entitites; |
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0,5% of the base |
for the legal entities applying a special tax regime; |
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0,1% of the tax base |
for non-commercial organisations, agencies of social sphere, library services, activity related to waterwork facilities and water supply, special economic zones' entities meeting Article 135-3 of the Tax Code requirements; |
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0% |
for the organisations located on the FEZ territory. |
- Vehicle tax from legal entities;
Tax rate depends on each vehicle, its capacity and specifications. Taxepayers are legal entities owned vehicle.
- Pension taxes, social deductions.
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Rates |
Payers/Period |
Procedures |
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10% of local employees income |
local employees |
Compulsory pension tax rate 10% of local employees income shall be deducted and transferred to the Republic pension fund. |
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Social deductions rate5% |
employers: entities and individual enerpreneurs |
Social deductions payers are employers and individual enerpreneurs. Monthly salary (income) exceeding 10 fold MMW – minimal monthly wage (MMW 21 364 KZT for 2015) is not taxable regarding to social deductions. |
Special tax regimes in Kazakhstan.
All legal entities and individual enterpreneurs under the special conditions have rights to conduct their activity under the special simplified tax regimes, which render tax benefits and less taxation.
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A special tax regime on the basis of Patent: |
A special tax regime on the basis of the simplified diclaration: |
Special tax regimes for farms and agriculture enterprises: |
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For individual enterpreneurs citizens of KZ or foreing citizens having permanent residence permit |
For legal entities and individual enterpreneurs |
For farmers and legal entities producing agriculture products and other activity related to agraculture sphere.
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Special conditions - do not have employees, operate in the form of private entrepreneurship and which income does not exceed 300-fold minimum wage. |
Special conditions - 1) the legal entities with income no more than KZT 30.0 Mln. per quarter and with no more than 50 employees. 2) individual entrepreneurs with income not exceeding KZT 15.0 Mln. per quarter and with no more than 25 employees |
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Benefits - Tax rate is 3% of income + IIT+Pension taxes/social deductions. No CIT. NO VAT if sales turnover whithin 59 460 000 KZT (for 2015) per year. |
Benefits - Tax rate is 3% of income + IIT+Pension taxes/social deductions. No CIT. NO VAT if sales turnover whithin 59 460 000 KZT (for 2015) per year. |
