Kazakhstan
Corporate taxes and other direct taxes
In general, the concept resembles the CIT concept applied in developed countries worldwide. Taxable income is calculated as annual income minus expenses. It is possible to deduct expenses linked to incomes recognized for CIT purposes, provided that such expenses are properly documented. Dividends and capital gains are not excluded from taxable income by default, it is necessary to analyze who is the beneficiary etc. to identify the applicable taxation regime. There are certain limits on deductibility of expenses such as: up to 3% of taxable profit for certain fees paid to companies from offshore jurisdictions, up to 4% of taxable profit for sponsorship fees. Also, thin capitalization rule is applied to interest on related party loans. The list is not exhaustive. Depreciation expenses on fixed assets differ from IFRS principles and are calculated on a group basis based on tax book value as of the reporting date. Loss carry-forward can be done within the following 10 calendar years inclusively, the rule on the carrying forward of losses does not apply to losses generated from the sale of securities, etc. There are Controlled Foreign Company rules (CFCs).
WHT applies to incomes paid to non-residents who are not registered for tax purposes in Kazakhstan. Taxable incomes are listed in the Tax Code. Kazakhstan has signed 55 treaties on the avoidance of double taxation. The treaty rates prevail over the Tax Code; however, any non-residents are required to have a duly issued tax residency certificate in order to apply the treaty. The multilateral instrument (MLI) entered into force in Kazakhstan from October 2020; however, it is important to check the MLI accession documents signed with each country as some of them have not signed/ratified the MLI or have done so under certain conditions.
Small and medium businesses may enjoy a special tax regime according to which the Unified Tax on income is paid. Such tax replaces CIT.
Level of attention paid by Tax Authority:
VAT and other indirect taxes
The VAT concept is quite similar to the concept applied in developed countries worldwide. The VAT applicable to turnover is in general based on the total value of sales (Output VAT). VAT payable to suppliers (input VAT) is offset against from Output VAT. Input VAT cannot be offset if goods, works, and services purchased are not related to taxable turnover, a VAT-invoice is not issued by a supplier or is issued with the violation of the legal requirements, the supplier is declared by a court to be an inactive entity, etc. The VAT rate for export goods is 0%, and there is a certain procedure for the refund of the related input VAT. Special VAT procedures apply to the export/import of goods to/from the countries belonging to the Eurasian Economic Union such as Russia, Belarus, Kyrgyzstan, and Armenia.
Excise Tax is paid by importers or sellers of
1) all types of alcohol
2) alcoholic products
3) tobacco products
4) heated tobacco products and nicotine-containing liquids for use in electronic cigarettes
5) gasoline (except for jet fuel), diesel fuel ethanol mix petrol (gasohol), phenol, nephras, mixed light hydrocarbons, ecological fuel
6) motor vehicle
7) crude oil, gas condensate
8) alcohol-containing medical products registered in accordance with the legislation of the Republic of Kazakhstan as medicinal products.
Sellers of fuel and diesel are also liable for Excise Tax.
Personal income tax / Social security system
A resident of the Republic of Kazakhstan shall be any individual who stays in the country at least 183 calendar days in any consecutive 12-month period ending in the current tax period (calendar year) or, though not permanently residing in the Republic of Kazakhstan, whose center of vital interests is within the Republic of Kazakhstan.
Income from employment is taxed at the rate of 10% regardless of the tax residency status of an individual. For other types of incomes, the rate depends on the type of income and tax residency status of an individual.
Social Tax and Social Contributions are paid at the expense of an employer. Mandatory pension fund contributions and mandatory social health insurance contributions are withheld from employment income by the employer.
Wage related taxes
in Kazakhstan |
Minimum wage
|
Average wage
in private sector |
| Exchange rate KZT/ EUR |
in EUR |
in KZT |
in EUR |
in KZT |
| 490 |
173 |
85,000 |
700 |
343,000 |
| Total wage cost |
203 |
117% |
819 |
117.00% |
| Employer's social security and other contributions |
28 |
17% |
119 |
17% |
| Gross salary |
173 |
100.00% |
700 |
100.00% |
| Personal income tax |
17 |
10% |
70 |
10% |
| Employees' contributions |
16 |
9% |
63 |
9% |
| Net salary |
141 |
81.00% |
567 |
81.00% |