Mazars in Kazakhstan
Corporate taxes and other direct taxes
In general, the concept resembles the CIT concept 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 purpooses provided that such expenses are properly documented. Dividends and capital gains are not excluded from taxable income by default, it is necessary to analyse who is beneficiary etc. to identify its taxation regime. There are certain limits on deductibility of expenses such as: up to 3% of taxable profit for certain fees paid to related parties, 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 carry forward of the losses does not apply to losses generated from sale of securities, etc. There are Controlled Foreign Company rules (CFCs).
WHT applies to incomes paid to non-residents that are not registered for tax purposes in Kazakhstan. The taxable incomes are listed in the Tax Code. Kazakhstan has signed 55 Treaties on Avoidance of Double Taxation. The treaty rates prevails over the Tax Code, however it is important to have a duly issued tax residency certificate for the non-resident 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 because some of them have not signed/ratified the MLI or ratified 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 turnover is in general the total value of sales (Output VAT). VAT paid to suppliers (input VAT) is offset against 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 issued with the violation of the legal requirements, the supplier is declared by court to be inactive entity, etc. The VAT rate for export goods is 0% and there is a certain procedure for refund of the related input VAT. Special VAT procedures apply to export/import of goods to/from the countries belonging to the Eurasian Economic Unit 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, nicotine-containing liquids for use in electronic cigarettes
5) gasoline (except for jet fuel), diesel fuel ethanol mix petrol (gasohol), benzanol, 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.
|VAT options in Kazakhstan
|Applicable / limits
|VAT group registration
|Cash accounting - yearly amount in EUR (approx.)*
|Import VAT deferment
|Local reverse charge
|Option for taxation
|- letting of real estate
|- supply of used real estate
|VAT registration threshold*
|69 mKZT (approx. 145 kEUR)
Personal income tax / Social security system
A resident of the Republic of Kazakhstan shall be recognised as an individual staying at least 183 calendar days in any consecutive 12-month period ending in the current tax period (calendar year) or one who while not permanently residing in the Republic of Kazakhstan, whose centre of vital interests is within the Republic of Kazakhstan.
Income from employment is taxed at the rate of 10% regardless tax residency status of an individual. For other type of incomes, the rate depends on 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, Mandatory Social Health Insurance Contributions are withheld from employment income by an employer.
|Wage related taxes
in private sector
|Exchange rate KZT/ EUR
|Total wage cost
|Employer's social security and other contributions
|Personal income tax