We are happy to share basic information on Kazakhstan tax system and rates according to Kazakhstan tax code.
General:
Accounting method: Kazakhstan Tax Code applies accrual method.
Income tax period: 1st of January – 31st of 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, available reciprocally under the double tax treaties.
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. Employer additionally pays 1,5% o 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 pays 3% of gross salary and an employee pays 2% on its side.
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: 10% for all income.
Reporting: not later than 31st of 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 31st of 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 that 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 more than more than 50 countries.
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.
CFC regime: applicable to tax heavens and jurisdiction with effective tax rate below 10%.