Kazakhstan tax information

General:

Accounting method: Kazakhstan tax code applies accrual method.

Income tax period: 1stof January – 31stof December.

Corporate residence: (a) incorporation under the laws of the Republic of Kazakhstan or (b) place of effective management is situated in Kazakhstan.

Individual residence: (a) 183 days stay in Kazakhstan in any consecutive twelve months period or (b) centre of vital interests is Kazakhstan.

Basis of taxation of Kazakhstan residents: worldwide income.

Foreign tax credit for Kazakhstan residents: available unilaterally both for entities and individuals.

Payroll

Individual income tax on remuneration from a Kazakh tax agent (salaries and other payments) is withheld from an individual and paid at the rate of 10% on income.

Pension fund contribution is withheld (tax exempt) by a Kazakh employer from Kazakh employee’s wage at the rate of 10% on income and paid to Kazakhstan national pension fund. 

Social tax: a Kazakh employer must remit social tax at the rate of 9,5% of the gross salary of an employer (Kazakh and foreign employee).

Social security: a Kazakh employer must pay social security contribution at the rate of 3,5% in addition to employee’s salary (only Kazakhstan citizens).

Contribution to the Social Medical Insurance Fund: a Kazakh employer must pay 1,5% of a Kazakh citizens’ gross salary.

Payroll taxes and contributions payment: monthly, not later than 25th day of the month following the reporting month.

Payroll taxes and contributions reporting: quarterly (per three months) not later than 15th day of the second month following the reporting quarter.

Tax deductions from payroll: applicable in certain circumstances.

Personal income tax (non-payroll)

Tax rate: 5% – dividends received from Kazakhstan sources and 10% for other income.

Reporting: not later than 31stof March of the year following the reporting period.

Tax payment date: within 10 days after submission of an annual tax return.

Pension fund contribution from other sources not associated with employment is payable at the rate of 10% (maximum amount is capped).

Corporate income tax

Tax rate: 20%.

Reporting: not later than 31stof March of the year following the reporting period (can be extended up to one month).

Tax payment date: within 10 days after submission of an annual tax return, however advance tax payment is anticipated for entities with certain threshold of revenue.

Tax losses: carry-back of losses is not permitted, carry-forward is permitted for the period up to 10 years.

Taxation of dividends: dividends received by a corporate Kazakh resident are exempt from taxation, provided certain criteria met.

Taxation of capital gain: capital gains are taxed at the corporate income tax rate, certain exclusions apply.

Holding company regime and participation exemption: not applicable in the Republic of Kazakhstan.

VAT

VAT rate: 12%.

VAT payers: registration as a VAT payer is optional until the turnover reaches certain threshold.

Payment: quarterly (per three months), not later than 25th day of the second month following the reporting quarter.

Reporting: quarterly (per three months) not later than 15th day of the second month following the reporting quarter.

International taxation

Double tax treaties: Kazakhstan is a party to double tax conventions with 54 states (full list is available).

Dividends sourced from Kazakhstan: withholding tax rate is 15% and 20% for tax heaven. Can be reduced as low as 5% under certain double tax treaties.

Interest sourced from Kazakhstan: withholding tax rate is 15% and 20% for tax heaven. Can be reduced as low as 10% under certain double tax treaties.

Royalties sourced from Kazakhstan: withholding tax rate is 15% and 20% for tax heaven. Can be reduced as low as 10% under certain double tax treaties.

PE regime: PE regime articulated in the Kazakh tax code is wider than those contained in most the of double tax conventions concluded by Kazakhstan.

Branch remittance tax sourced from a permanent establishment situated in Kazakhstan: withholding tax rate is 15% applied to a net profit (regardless whether actually paid to a head company or not). Can be reduced as low as 5% under certain double tax treaties.

Anti-avoidance rules

Transfer pricing legislation: applicable.

Thin capitalisation rule: applicable (see details).

CFC regime: applicable to tax heavens and jurisdiction with effective tax rate below 10%.