In Kazakhstan, there are 50 Conventions concluded with foreign states on
avoidance of double taxation and prevention of evasion of taxes on income
and capital. Avoidance of double taxation is a procedure where each
Contracting Government provides the taxpayer the opportunity to pay the tax
only once – in one of the Contracting Governments.
The complete list:
The tax legislation of the is based on the Constitution of the , the
‘‘On taxes and other obligatory payments to the budget’’ (Tax ) of
the , as well as other normative legal acts.
The Tax governs the power relations to establish, impose and order
of calculation and payment of taxes and other obligatory payments to the
budget, as well as relations between the Government and the taxpayer (tax
agent) associated with the fulfillment of tax obligation.
TAXATION OF RESIDENT AND NON-RESIDENT INCOMES
Taxation of income of non-residents depends on the existence of a permanent
establishment of the non-resident in Kazakhstan. Permanent establishments
of non-resident recognized the permanent place of business through which
the non-resident is fully or partially conducts business, including the activity
carried out through an authorized person.
The criteria for creation of permanent establishment from the terms
prospective is the provision of services (carrying-out the works) by a nonresident
deploying the personnel for more than 183 calendar days within
any consecutive 12-month period from the date of commencement of
business activity within a project or related projects.
The branch or representative office of foreign companies is also recognized
as permanent non-resident agencies. The subsidiary of non-resident legal
entity is recognized as a permanent establishment if it meets the criteria of
a dependent agent.
The individual person is recognized as a permanent resident in Kazakhstan
for the current tax period, if he/she resides in Kazakhstan at least for 183
calendar days in any consecutive twelve-month period ending in the
current tax period.
TYPES OF TAXES
1. Corporate Income Tax (CIT)
Payers of the CIT – Kazakhstan legal entities, as well as foreign companies
operating in Kazakhstan through a permanent establishment, or receiving
income from sources in the . The CIT general rate is 20% of the amount
of taxable income.
Objects of the CIT taxation:
1. taxable Income;
2. income taxable at the source of payment;
3. net income of foreign company carrying out activities through a permanent
establishment in Kazakhstan.
In addition to the CIT, the net income of foreign companies working in
Kazakhstan through a permanent establishment is taxable at the rate of 15%.
The CIT for taxable income of foreign companies operating without formation
of a permanent establishment in Kazakhstan is deducted at the source of
payment by tax agent (the person paying income).
Foreign companies’ incomes from sources in the , not related to a
permanent establishment are tax deductible according to the established rates
of 5 to 20%. Order of payment and the rates of the CIT, subject to withholding
at the source of payment depends on the existence of international double
taxation agreements between Kazakhstan and corresponding country.
2. Personal Income Tax (PIT)
Payers – individuals.
Objects of taxation:
1. income taxable at the source of payment:
– employee’s income
– individual person’s income from the tax agent, etc.
2. income taxable at the source of payment:
– the property tax
– income of private entrepreneur, etc.
Income subject to the PIT at the rate of 10%, except for the income in the form
of dividends, taxable at the rate of 5%. Calculation, withholding and payment of
tax on income, taxable at the source of payment, is made by tax agents.
3. Value Added Tax (VAT)
1. Persons, which made statement on the registration account for VAT in the
Republic of Kazakhstan:
• individual entrepreneurs;
• resident legal entities, except for government agencies;
• non-residents operating in the through a branch, representative
• trust managers, engaged in the turnover of sales of goods, works and
services under trust agreements with the trustors or with beneficiaries in
other cases of occurrence of asset management.
2. persons importing goods into the territory of the in accordance with
the customs legislation of EAEU and (or) the customs legislation of the .
Objects of taxation:
Taxable turnover of goods (works and services) and taxable import. The VAT
is charged in the case, if the minimum turnover exceeds 30 000 MCI a year.
The VAT rate is 12%.
The Tax of the set a list of goods (services), turnover and import of
which is an exempt from the VAT.
4. Excise taxes
Payers of excise duty: Individuals and legal entities who:
1. produce and import excisable goods on the territory of the ;
2. carry out wholesale, retailing of petrol (except aviation petrol) and diesel
fuel on the territory of the ;
3. carry out sale of confiscated, ownerless, moved as per the right of
inheritance to the Government and donated to the Government on the
territory of the of excisable goods if previously tax was not paid in
accordance with the legislation of the ;
4. carry out sale of excisable goods property if for specified goods the excise
tax on the territory of the has not been previously paid in accordance
with the legislation of the ;
5. assemble (furnish) excisable goods under subparagraph 5 of the following
List of excisable goods and rates for calculation of the amount of excise duty
indicated in Articles 279–280 of the Tax .
5. Rent tax
Taxpayers: individuals and legal entities who export:
1. crude oil and crude oil products, except:
– subsoil users exporting crude oil and gas condensate obtained in the
framework of contracts;
– legal entities, the list whereof shall be determined by theauthorized
body in the field of oil and gas, using the customs procedure
to export crude oil in quantities, defined by the authorized body
in the field of oil and gas, and previously placed under the
customs procedure of processing outside the customs territory.
Object of taxation:
The exported crude oil and crude petroleum products, coal.
6. Taxation of subsoil users
Special payments and taxes of subsoil users include:
1. special fees (subscription bonus, bonus commercial detection, payment
for refundable historical costs;
2. mineral extraction tax;
3. excess profit tax.
A single-time fixed payment by a subsoil user to acquire the right of subsoil
use in the contract area, as well as paid while expanding the contract area.
Commercial discovery bonus
Payable by a subsoil user within the frameworks of the production contracts
and (or) combined exploration & production for every commercial discovery
on the territory of the contract area, including the discovery, made as a result
of the additional exploration of fields.
Payment to reimburse historical costs
A fixed payment of the subsoil users to recover the total cost, incurred by
the Government for the Geological Survey and exploration of the contract
territory prior to conclusion of the subsoil use contract.
Mineral Extraction Tax
Paid separately for each type of subsoil minerals, oil, subsoil water and
therapeutic mud produced on the territory of the .
Excess profit tax
Excess profit tax is calculated for the tax period for each individual subsoil
use contract under which a subsoil user is a payer of the excess profit tax in
accordance with Article 347-1 of the TC.
7. Social Tax
1. individual entrepreneurs;
2. private notaries, private bailiffs, lawyers, professional mediators;
3. legal entities-residents of the ;
4. non-resident legal entities carrying out activities in the through the
5. non-resident legal entities carrying out activities through a branch or
representative office that does not lead to the formation of permanent
establishment in accordance with an international treaty on avoidance of
Object of taxation:
The cost of employer paid employees (residents and non-residents), as well
as income of foreign personnel. General rate of social tax is 11%.
8. Compulsory assignments to the Social Health Insurance Fund
Payers of assignments
Employers, including foreign legal entities performing activities in Kazakhstan
through a permanent establishment, as well as branches, representative
offices of foreign legal entities, calculating (deducting) and transferring
assignments and contributions to the Fund in the manner prescribed by
Chapter 6 of the Law “On compulsory social health insurance”.
Rates of assignments:
from July 1, 2017 – 2% of object to calculation of assignments;
from January 1, 2018 – 3% of object to calculation of assignments;
from January 1, 2019 – 4% of object to calculation of assignments;
from January 1, 2020 – 5% of object to calculation of assignments.
Object of calculation of assignments:
Expenses paid by the employer to the employee in the form of income.
DOING BUSINESS IN KAZAKHSTAN
9. Tax on property of legal entities and
1. legal persons having object of taxation on the property right, economic
conducting or operative management on the territory of the ;
2. individual entrepreneurs having object of taxation on the property right on
the territory of the ;
3. the concessionaire who has the right to own, use object of taxation,
which is the object of the concession in accordance with the contract of
4. persons referred to in Article 395 of the Tax of the .
The total tax rate is 1.5% of the average annual cost of objects of taxation,
but the tax of the provides for other rates, depending on the status
and activity of the taxpayer.
10. Land Tax
Taxpayers – individuals and legal entities who
have the taxation objects:
1. on the right of ownership;
2. on the right of permanent use of land;
3. on the right of the primary grant temporary land use.
Land property (with share ownership to the land plot – land share). The tax
rates are established in Articles 378–386 of the TC of the depending on
purpose of land, their location, etc.
Comparison of underlying tax rates in Kazakhstan, Russia and China
Taxes Kazakhstan Russia China
Corporate Income Tax (CIT) 20% 20% 25%
Value Added Tax (VAT) 12% 18% 17%
The Land Tax $0.03-$0.16/1 м2 0.3%, 1.5% –
The property tax 1.5% 2.2% 1.2%*, 12%**
*appraised value, **rental property
Source: The Ministry of Finance of the , Federal Tax Service of Russia, State
Administration of Taxation of the People’s Republic of China
TAXATION OF AN ORGANIZATION IMPLEMENTING AN
INVESTMENT PRIORITY PROJECT
The organization that implements the investment priority project and is not
subject to a special tax regime:
1. Reduces the CIT by 100% up to 10 consecutive years, which shall be
calculated starting from January 1 of the year following the year in which
the signed an investment contract on realization of the investment priority
2. When calculating land tax on the parcels used for implementation of priority
investment project, to the corresponding land tax applies coefficient 0 to
10 consecutive years, which shall be calculated starting from January 1 of
the year following the year in which the signed an investment contract on
implementation of the investment priority project.
3. For the projects, which entered into service for the first time on the territory
of shall calculate the property tax according to the rate of 0% of the
tax base up to 8 consecutive years, which shall be calculated starting from
January 1 of the year following the year in which the first asset is included
in the composition of the fixed assets in accordance with international
financial reporting standards and requirements of the legislation of the
on accounting and financial reporting.
VAT EXEMPTION FOR IMPORTED RAW MATERIALS AND (OR) MATERIALS
In the framework of investment contract, the investor shall be exempt from
VAT imports of raw materials and (or) materials, while at the same time under
the following conditions:
• raw materials and (or) material included in the list of raw materials and
(or) materials import of which is exempt from VAT under an investment
• import of raw material and (or) material according to furnished documents
stipulated by the customs legislation of the Customs Union and (or) the
customs legislation of the ;
• VAT payer presented a commitment to the Customs authorities on the use
of imported raw materials and (or) material within the limitation period
solely in carrying out activities within the framework of the investment
Exemption from VAT imports of raw materials and (or) material within the
framework of the investment contract is available to legal entities of the
for a period for 5 consecutive years, starting with 1 day of the month in which
the fixed assets were put into operation, provided for in the work program,
which is annexed to the investment contract. If the work program provides
for input 2 or more fixed assets, the term of the exemption from VAT for
imports of raw materials and (or) materials produced since 1 month, which
commissioned the first fixed asset on the work program.
TAXATION OF ORGANIZATIONS OPERATING IN THE SEZ
1. exemption from the CIT;
2. exemption from the land tax;
3. exemption from the property tax;
4. exemption from the value added tax (VAT) for the sale of products inside
the SEZ that are entirely used in production.
5. exemption from social tax for 5 years provided that labor costs account
for at least 50% of the annual income and 90% of these costs is spent on
residents of the participants of ‘‘Park of information technologies’’
6. organization registered in Kazakhstan and outside the ‘‘PIT’’ SEZ before
January 1, 2018 is considered a member of ‘‘PIT’’ SEZ if:
1) the organization has no structural subdivisions;
2) at least 70% of the total annual income comprise incomes, receivable
(received) from the sale of goods of own production, works and services
from the following activities:
• design, development, implementation and production of databases
and hardware units, development, implementation and production of
software (including prototypes);
• services on information storage and processing in electronic form
using the server info-communication equipment (data-center services);
• carrying out research engineering and research & development
works on the creation and implementation of information technology
Conditions for obtaining tax incentives:
1. register as a taxpayer on the territory of the SEZ;
2. register as a member of the SEZ;
3. absence of structural subdivisions outside the SEZ;
4. gains from the sale of goods produced in the priority activities of the SEZ –
not less than 90% of the total annual income (for the ‘‘PIT’’ SEZ – 70%).