Taxation on the territory of the SEZ

  1. An organization or an individual entrepreneur operating in the territory of a special economic zone, when determining the amount of land tax, property tax and payment for the use of land plots to be paid to the budget, according to taxation objects (taxable objects) located on the territory of the special economic zone and used in the implementation of priority activities, reduce the amount of the calculated tax and (or) fees by 100 percent.

An organization operating in the territory of a special economic zone, when determining the amount of corporate income tax payable to the budget, reduces the amount of the calculated corporate income tax by 100 percent on income received from the sale of goods, works, services resulting from the implementation of priority activities.

An organization or an individual entrepreneur operating on the territory of a special economic zone shall keep separate tax records of taxable items and (or) tax-related items in order to calculate tax liabilities for the corresponding priority type of activity and other types of activity.

In the event of termination by the management company of a special economic zone of an agreement on the implementation of activities as a participant in a special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones, preferences in taxes and fees are canceled from the date of the beginning of the tax period in which the violation was committed, which is the reason for termination of the contract.

The management company of the special economic zone, no later than thirty calendar days from the date of termination of the contract, submits information about the participants of the special economic zone with whom the contracts were terminated, indicating the date of the violation that was the reason for the termination of the contract, to the tax authorities at the location of such participants.

In this case, the taxpayer is obliged, no later than thirty calendar days from the date of termination of the contract, to submit additional tax reports for the tax period in which the violation was committed, which was the reason for the termination of the contract.

For the purposes of applying the provisions of the Tax Code, an organization operating in the territory of a special economic zone is also recognized as a legal entity that simultaneously meets the following conditions:

  1. is a member of the special economic zone "Park of innovative technologies" in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones;
  2. registered as a taxpayer at the location;
  3. does not have branches and other separate structural divisions, with the exception of representative offices;
  4. carries out a priority type of activity corresponding to the goals of creating a special economic zone "Park of innovative technologies".
Organizations and individual entrepreneurs operating in the territories of special economic zones do not include:
  1. subsoil users;
  2. organizations that produce excisable goods, with the exception of organizations that manufacture, assemble (complete) excisable goods, provided for in subparagraph 6) of Article 462 of the Tax Code;
  3. organizations and individual entrepreneurs applying special tax regimes;
  4. organizations applying (applied) investment tax preferences - under contracts concluded with the authorized state investment body before January 1, 2009;
  5. organizations implementing (having implemented) an investment priority project or an investment strategic project in accordance with the legislation of the Republic of Kazakhstan on investments;
  6. organizations operating in the gambling business.

VAT exemption As part of the implementation of investment and special investment projects

Exemption from VAT on imports of raw materials and (or) materials

According to subparagraph 14 of paragraph 1 of Article 399 of the Tax Code, the import of raw materials and (or) materials within the framework of an investment contract is exempted from value added tax, while simultaneously meeting the following conditions:

  • raw materials and (or) materials are included in the list of raw materials and (or) materials, the import of which is exempt from value added tax under the investment contract, approved by the authorized state investment body in agreement with the central authorized body for state planning and the authorized body;
  • the import of raw materials and (or) materials is formalized by documents provided for by the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan;
  • imported raw materials and (or) materials will be used by the payer of value added tax within the limitation period only when carrying out activities under the investment contract.
Exemption from value added tax on the import of raw materials and (or) materials within the framework of an investment contract is provided to legal entities of the Republic of Kazakhstan for a period of five consecutive years, starting from the 1st day of the month in which fixed assets are put into operation, provided for in the work program, which is an annex to an investment contract concluded in accordance with the legislation of the Republic of Kazakhstan in the field of investments. If the work program provides for the introduction of two or more fixed assets, the calculation of the period for exemption from VAT on the import of raw materials and (or) materials under the investment contract is carried out starting from the 1st day of the month in which the first fixed asset was put into operation. according to the work program.

In case of violation within five years from the date of release of goods for free circulation or domestic consumption in the territory of the Republic of Kazakhstan of the requirements established by this subparagraph, value added tax on imported raw materials and (or) materials shall be paid with a penalty from the period established for payment value added tax on imported goods upon their import, in the manner and amount determined by the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan.

The list of raw materials and materials, the import of which is exempt from value added tax under the investment contract, was approved by Order of the Minister for Investment and Development of the Republic of Kazakhstan dated February 27, 2018 No. 140.

Special investment project

In accordance with subparagraph 15 of paragraph 1 of Article 399 of the Tax Code, the import of raw materials and (or) materials as part of vehicles and (or) agricultural machinery, as well as their components placed under the customs procedure of a free warehouse or free customs zone, is exempted from value added tax of the special economic zone "Qyzyljar" within the framework of a special investment contract concluded with an authorized body for the conclusion of special investment contracts by a legal entity that is:
  • a vehicle manufacturer that has entered into an agreement on the industrial assembly of motor vehicles with an authorized body in the field of state support for industrial and innovative activities;
  • a manufacturer of agricultural machinery that has entered into an agreement on the industrial assembly of agricultural machinery with an authorized body in the field of state support for industrial and innovative activities.
In accordance with paragraph 3 of Article 399 of the Tax Code, a legal entity that has entered into a special investment contract with an authorized investment body has the right to apply exemption from payment of value added tax when importing goods as part of finished products produced in the territory of a special economic zone or free warehouse, if compliance with the following conditions:
  • goods are placed under the customs procedure of a free customs zone or free warehouse;
  • the customs procedure of a free customs zone or a free warehouse ends with a customs procedure for release for domestic consumption;
  • identification of goods as part of finished products was carried out in accordance with the customs legislation of the Republic of Kazakhstan.

CIT

An organization implementing an investment priority project for the creation of new production facilities and (or) for the expansion, renewal of existing production facilities:

  1. reduces corporate income tax on income received from the implementation of priority activities specified in the investment contract by 100 percent.
The income of an organization implementing an investment priority project from the implementation of other types of activities not related to priority ones is subject to corporate income tax in accordance with the generally established procedure.

An organization implementing an investment priority project keeps separate tax records of taxable objects and (or) objects related to taxation in order to calculate tax liabilities for a priority type of activity under an investment contract.

The deadline for the application of this clause under investment contracts for the implementation of an investment priority project:

1) to create new production facilities:
  • it begins on January 1 of the year in which the investment contract for the implementation of the investment priority project is concluded;
  • ends no later than ten consecutive years, which are calculated starting from January 1 of the year following the year in which the investment contract for the implementation of the investment priority project was concluded;
2) to expand and (or) update existing production facilities, except for the cases specified in subparagraph 3) of this paragraph:
  • it begins on January 1 of the year following the year in which the last fixed asset producing products was put into operation under the investment contract for the implementation of an investment priority project;
  • it ends no later than three consecutive years, which are calculated starting from January 1 of the year following the year in which the last fixed asset producing products was commissioned under the investment contract for the implementation of an investment priority project;
3) to expand and (or) upgrade existing production facilities with the phased introduction of fixed assets producing products provided for in the investment contract for the implementation of the investment priority project:
  • it begins on January 1 of the year following the year in which the fixed asset producing products was put into operation under the investment contract;
  • it ends no later than three consecutive years, which are calculated starting from January 1 of the year following the year in which the fixed asset producing products put into operation under the investment contract was commissioned.
Land tax

An organization implementing an investment priority project for the creation of new production facilities, when calculating land tax on land plots used for the implementation of an investment priority project, applies a coefficient of 0 to the corresponding land tax rates.

The deadline for the application of part one of this paragraph:
  1. it begins on the 1st day of the month in which an investment contract for the implementation of an investment priority project for the creation of new production facilities is concluded;
  2. it ends no later than ten consecutive years, which are calculated starting from January 1 of the year following the year in which the investment contract for the implementation of the investment priority project for the creation of new production facilities was concluded.
These provisions do not apply in cases of property leasing (leasing), for use on other grounds of a land plot used for the implementation of an investment priority project, or its part (together with buildings, structures, structures located on it or without them).

Property tax

An organization implementing an investment priority project for the creation of new production facilities, for facilities first put into operation on the territory of the Republic of Kazakhstan, calculates property tax at a rate of 0 percent to the tax base.

The deadline for the application of this provision:
  1. it begins on the 1st day of the month in which the first asset is accounted for as part of fixed assets in accordance with international financial reporting standards and the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;
  2. ends no later than eight consecutive years, which are calculated starting from January 1 of the year following the year in which the first asset is accounted for as part of fixed assets in accordance with international financial reporting standards and the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting.
These provisions do not apply in cases of transfer of taxable objects for use, trust management or lease.

The provisions of Article 712 of the Tax Code apply if an investment contract for the implementation of an investment priority project for the creation of new production facilities provides for the application of:
  • reduction of corporate income tax calculated in accordance with Article 302 of the Tax Code by 100 percent;
  • coefficient 0 to land tax rates;
  • the rates of 0 percent to the tax base when calculating property tax.

Taxation of organizations implementing a priority investment project

An organization implementing an investment priority project is a legal entity that simultaneously meets the following conditions:

  1. has entered into an investment contract in accordance with the Entrepreneurial Code of the Republic of Kazakhstan, providing for the implementation of an investment priority project and the provision of tax preferences;
  2. carries out activities corresponding to the list of priority activities identified for the implementation of the investment priority project;
  3. does not apply special tax regimes.

Tax

1. Corporate income tax (CIT)

The general CIT rate is 20% of the taxable income. Payers of corporate income tax are legal entities-residents of the Republic of Kazakhstan, with the exception of state institutions and state educational institutions of secondary education, as well as non-resident legal entities operating in the Republic of Kazakhstan through a permanent establishment or receiving income from sources in the Republic of Kazakhstan.

The objects of corporate income tax are:

  1. taxable income;
  2. income taxable at the source of payment;
  3. net income of a non-resident legal entity operating in the Republic of Kazakhstan through a permanent establishment.

In accordance with the current Tax Code, the list of taxable income has been supplemented, which also includes the total profit of controlled foreign companies and permanent establishments of controlled foreign companies, determined in accordance with the Tax Law.

Controlled foreign companies (CFCs)

Nowadays, more and more states are adopting in their tax legislation rules for controlled foreign companies, aimed at counteracting tax evasion. Kazakhstan is also no exception.

From January 1, 2018, the income of a resident legal entity or individual includes the profit of its controlled foreign company (CFC).

A controlled foreign company is a person who meets the following conditions at the same time:

1) such person is one of the following persons:

  • a non-resident legal entity;
  • another foreign form of organizing entrepreneurial activity without forming a legal entity (hereinafter - another form of organization);

2) as of December 31 of the reporting period, such a person meets one of the following conditions:

  • 25 and more percent of the participation interest (voting shares) represented directly or indirectly, or constructively belong to a legal entity or individual who is a resident of the Republic of Kazakhstan (hereinafter for the purposes of this chapter - a resident);
  • the person is associated with the resident through control (in the event that the resident has direct or indirect, or constructive control over the person);

3) such person meets one of the following conditions:

  • the effective income tax rate of a non-resident legal entity or other form of organization, determined in accordance with subparagraph 2) of paragraph 4 of this article, is less than 10 percent;
  • a non-resident legal entity or other form of organization is registered or the constituent document (document of creation) of which is registered, or the participant who is entrusted with keeping records of income and expenses or managing assets in this other form of organization is registered in a state with preferential taxation.

These changes are driven in part by global tax reforms related to the development of the OECD Base Erosion and Profit Shifting Project and the OECD Final Report on Developing Effective Rules for Controlled Foreign Companies (OECD BEPS Action 3: 2015 Final Report “Designing effective controlled foreign company rules”).

The list of states with preferential taxation was approved by order of the Minister of Finance of the Republic of Kazakhstan.

According to Article 645, income from sources in the Republic of Kazakhstan of a non-resident legal entity, whose activities do not lead to the formation of a permanent establishment in the Republic of Kazakhstan, are subject to corporate income tax at the source of payment without deductions. Calculation and withholding of corporate income tax on income taxed at the source of payment is carried out by the tax agent:

  1. not later than the day of payment of income to a non-resident - according to accrued and paid income;
  2. no later than the deadline paragraph 1 of article 315 Of the Tax Code for filing a corporate income tax return - for accrued and unpaid income that is deducted.

At the same time, CIT at the source of payment is withheld by the tax agent regardless of the form and place of payment of income to a non-resident.

at the following rates:

  1. insurance premiums under risk insurance contracts - 15 percent;
  2. insurance premiums under risk reinsurance contracts - 5 percent;
  3. income from the provision of international transportation services - 5 percent;
  4. gains in value, dividends, remuneration, royalty - 15 percent;
  5. all other types of income - 20 percent.

Income of a person registered in a state with preferential taxation included in the approved scroll are subject to taxation at the source of payment at the rate of 20 percent.

2. Individual income tax (IIT)

Income is subject to PIT at a rate of 10%, except for income in the form of dividends, which is taxed at a rate of 5%. Calculation, withholding and payment of tax on income taxed at the source of payment are made by tax agents.

3. Social tax

Payers of social tax are: individual entrepreneurs, private practitioners, legal entities-residents of the Republic of Kazakhstan, unless otherwise provided by the Tax Code, non-resident legal entities operating in the Republic of Kazakhstan through permanent establishments, non-resident legal entities operating through a structural unit that does not lead to the formation of a permanent establishment.

Social tax is calculated at the rate:

from January 1, 2018 - 9.5 percent;

from January 1, 2025 - 11 percent.

4. Value Added Tax (VAT)

The value added tax rate is 12 percent and is applied to the amount of taxable turnover and taxable imports.

Mandatory staging

Legal entities-residents, non-residents operating in the Republic of Kazakhstan through a branch, representative office, individual entrepreneurs, persons engaged in private practice are subject to mandatory registration for value added tax, if the amount of turnover for the purpose of registration for VAT exceeds during a calendar year 30,000 times the size monthly calculation indexestablished by the law on the republican budget and effective as of January 1 of the corresponding financial year ( 2,917 tenge from January 1, 2021 ).  

These persons are required to submit to the tax authority at the location tax statement on registration accounting for value added tax.

A tax application is submitted no later than ten business days from the end of the month in which the excess of the turnover over the minimum turnover occurred in one of the following ways:

  1. on paper, without prior notice;
  2. in electronic form.

Registration as a taxpayer carrying out certain types of activities shall be subject to taxpayers carrying out the following activities:

  1. production of gasoline (except for aviation), diesel fuel;
  2. wholesale and (or) retail sale of gasoline (except for aviation), diesel fuel;
  3. production of ethyl alcohol and (or) alcoholic beverages;
  4. wholesale and (or) retail sale of alcoholic beverages;
  5. production and (or) wholesale of tobacco products;
  6. gambling business;
  7. production, assembly (complete set) excisable goodsforeseen subparagraph 6) of the first part of Article 462 of this Code;
  8. electronic trade in goods.

Voluntary staging

Persons not listed above, i.e. not subject to mandatory registration for VAT in accordance with the Tax Code, have the right to register for value added tax by filing tax statement on registration accounting for value added tax in one of the following ways:

  1. on paper, without prior notice;
  2. in electronic form;
  3. upon state registration of a resident legal entity in the National Register of Business Identification Numbers.

Are not entitled to voluntary registration for value added tax:

  • individuals who are not individual entrepreneurs, persons engaged in private practice;
  • government agencies;
  • non-residents who do not carry out activities in the Republic of Kazakhstan through a branch, representative office;
  • structural divisions of resident legal entities;
  • casinos, slot machine halls, sweepstakes, bookmakers., according to activities subject to gambling tax.

The Tax Code of the Republic of Kazakhstan establishes a list of goods (services), the turnover and import of which are exempt from VAT.

5. Excise taxes

The list of excisable goods, as well as the rates for calculating the amount of excise taxes, are specified in Articles 462-463 of the Tax Code of the Republic of Kazakhstan.

Objects produced on the territory of the Republic of Kazakhstan and imported into the territory:

1) all types of alcohol;

2) alcoholic beverages;

3) tobacco products;

4) products with heated tobacco, nicotine-containing liquids for use in electronic cigarettes;

5) gasoline (except for aviation), diesel fuel;

6) motor vehicles designed to carry 10 or more people with an engine capacity of more than 3000 cubic centimeters, with the exception of minibuses, buses and trolleybuses;

passenger cars and other motor vehicles intended for the transport of people with an engine capacity of more than 3000 cubic centimeters (except for cars with manual control or a manual control adapter specially designed for disabled people);

motor vehicles on the chassis of a passenger car with a platform for goods and a driver's cab, separated from the cargo compartment by a rigid stationary partition, with an engine capacity of more than 3000 cubic centimeters (except for cars with manual control or a manual control adapter specially designed for disabled people);

7) crude oil, gas condensate;

8) alcohol-containing medical products registered in accordance with the legislation of the Republic of Kazakhstan as a medicine.

Excise rates are set in absolute amounts per unit of measurement in kind. For example: 600 tenge / liter.

6. Rent tax

Payers: individuals and legal entities selling crude oil and crude oil products for export , with the exception of :

  • subsoil users exporting volumes of crude oil, gas condensate produced under the contracts specified in paragraph 1 of Article 722 of the Tax Code of the Republic of Kazakhstan;
  • subsoil users under contracts for the production or exploration and production of hydrocarbons at a field (fields) located (located) in the Kazakhstan sector of the Caspian Sea, and (or) fields with the depth of the upper point of hydrocarbon deposits specified in a mining allotment or a production or exploration contract and production of hydrocarbons in the absence of a mining allotment, not higher than 4500 meters and the lowest point of hydrocarbon deposits specified in a mining allotment or a contract for the production or exploration and production of hydrocarbons in the absence of a mining allotment, 5000 meters and below, who are payers of the alternative subsoil use tax.

Crude oil and refined petroleum products are goods classified in subheading 2709 00 unified nomenclature of goods subject to foreign trade of the EAEU...

When exporting crude oil and crude petroleum products, the export rental tax is calculated based on the world price per barrel of crude oil as a percentage. For example: up to $ 20 per barrel - 0%; up to $ 200 per barrel - 32%.

7. Taxation of subsoil users

Special payments and taxes of subsoil users include:

  1. signature bonus;
  2. payment for reimbursement of historical costs;
  3. alternative subsoil use tax;
  4. royalty;
  5. share of the Republic of Kazakhstan in production sharing;
  6. mineral extraction tax;
  7. excess profits tax.

Order assignment of a deposit (a group of deposits, a part of a deposit) to the category of low-profit, high-viscosity, watered, marginal and depleted, their scroll and order taxation in terms of mineral extraction tax are determined by the Government of the Republic of Kazakhstan.

8. Tax on property of legal entities and individual entrepreneurs

Property tax payers are:

  1. legal entities that have an object of taxation on the basis of the right of ownership, economic management or operational management in the territory of the Republic of Kazakhstan;
  2. individual entrepreneurs who have an object of taxation on the basis of ownership in the territory of the Republic of Kazakhstan;
  3. a concessionaire who has on the right of ownership, use an object of taxation, which is an object of a concession in accordance with a concession agreement;
  4. persons listed in article 518 of the Tax Code.

A legal entity, by its decision, has the right to recognize its structural unit as an independent property tax payer.

The general tax rate is 1.5% of the average annual value of taxable items, however, the Tax Code of the Republic of Kazakhstan provides for other rates depending on the status and type of activity of the taxpayer.

Property tax at a rate of 0.5 percent to the tax base is calculated by the following payers:

  1. individual entrepreneurs;
  2. legal entities applying a special tax regime based on a simplified declaration.

Property tax of individuals, the tax base for which is determined in accordance with with article 529 of the Tax Code, calculated depending on the value of taxable items at the rates specified in article 531 of the Tax Code.

9. Land tax

Payers - individuals and legal entities with taxable objects:

  1. on the right of ownership;
  2. on the right of permanent land use;
  3. on the right of primary free temporary land use.

The object of taxation is a land plot (with a common share ownership of a land plot - a land share). Tax rates are established in Articles 503-510 of the Tax Code of the Republic of Kazakhstan, depending on the purpose of lands, their location, etc.

Types of taxes and payments to the budget

 In the Republic of Kazakhstan, there are:

Tax

Payments

  1. corporate income tax;
  2. individual income tax;
  3. value added tax;
  4. excise taxes;
  5. rental tax on exports;
  6. special payments and taxes of subsoil users;
  7. social tax;
  8. vehicle tax;
  9. land tax;
  10. property tax;
  11. gambling business tax;
  12. single land tax;

  1. government duty;
  2. fees;
  3. payment for:

  • use of licenses to engage in certain types of activities;
  • use of land plots;
  • use of surface water resources;
  • emissions into the environment;
  • use of the animal world;
  • forest use;
  • use of specially protected natural areas;
  • use of the radio frequency spectrum;
  • provision of long-distance and (or) international telephone communications, as well as cellular communications;
  • placement of outdoor (visual) advertising.

For the purposes of applying international treaties, indirect taxes are value added tax and excise taxes.

Taxation of income of residents and non-residents

A resident of the Republic of Kazakhstan for tax purposes is:

1) an individual:

  • permanently residing in the Republic of Kazakhstan;
  • not permanently staying in the Republic of Kazakhstan, but whose center of vital interests is in the Republic of Kazakhstan;

2) legal entity:

  • created in accordance with the legislation of the Republic of Kazakhstan;
  • created in accordance with the legislation of a foreign state, the place of effective management (location of the actual governing body) of which is located in the Republic of Kazakhstan. The place of effective management (location of the actual management body) is the location of the actual management body in the Republic of Kazakhstan, determined by the meeting of the board of directors or a similar management body, declared during registration as a taxpayer with the tax authority and specified in the relevant minutes of the management body

An individual is recognized as permanently residing in the Republic of Kazakhstan for the current tax period if he is in the Republic of Kazakhstan for at least one hundred and eighty three calendar days (including days of arrival and departure) in any consecutive twelve month period ending in the current tax period. The center of vital interests of an individual is recognized as located in the Republic of Kazakhstan if the following conditions are met simultaneously:

  1. an individual has citizenship of the Republic of Kazakhstan or a residence permit in the Republic of Kazakhstan (residence permit);
  2. spouse and (or) close relatives an individual living in the Republic of Kazakhstan;
  3. the presence in the Republic of Kazakhstan of immovable property owned or otherwise owned by an individual and (or) spouse and (or) his close relativesavailable at any time for his residence and (or) for the residence of his spouse and (or) his close relatives.

Residents of the Republic of Kazakhstan pay taxes in the Republic of Kazakhstan in accordance with the provisions of the Tax Code on income from sources in the Republic of Kazakhstan and abroad. Non-residents pay taxes in the Republic of Kazakhstan on income from sources in the Republic of Kazakhstan in accordance with tax legislation. Non-residents carrying out entrepreneurial activities in the Republic of Kazakhstan through a permanent establishment shall also pay taxes in the Republic of Kazakhstan in accordance with tax legislation on income from sources outside the Republic of Kazakhstan associated with the activities of such a permanent establishment.

Permanent establishment of a non-resident

In accordance with the Tax Code, unless otherwise established by an international treaty, a permanent establishment of a non-resident in the Republic of Kazakhstan is recognized as one of the following places of business through which a non-resident carries out business activities in the territory of the Republic of Kazakhstan, regardless of the timing of such activities:

I. PLACE:

  1. any place where the production, processing, assembly, packing, packaging and (or) delivery of goods are carried out;
  2. any place of management;
  3. any place of geological study of subsoil, exploration, preparatory work for the extraction of minerals and (or) the extraction of minerals and (or) the performance of work, the provision of services for the control and (or) supervision of the exploration and (or) production of minerals;
  4. any place of implementation of activities (including control or observation) related to the pipeline;
  5. any place of implementation of activities related to the installation, adjustment and operation of gaming machines (including consoles), computer networks and communication channels, attractions, as well as related to transport or other infrastructure;
  6. the place of sale of goods on the territory of the Republic of Kazakhstan, except for cases of sale of goods at exhibitions and fairs, unless otherwise provided by paragraph 5 of Article 220 of the Tax Code;
  7. any place where construction activities and (or) construction and installation works are carried out, as well as the provision of services for monitoring the implementation of these works;
  8. location of the structural unit of a non-resident legal entity, with the exception of a representative office carrying out activities specified in paragraph 6 of Article 220 of the Tax Code;
  9. location of a person carrying out intermediary activities in the Republic of Kazakhstan on behalf of a non-resident in accordance with the Law of the Republic of Kazakhstan "On insurance activities";
  10. location of a resident-participant of a joint activity agreement concluded with a non-resident in accordance with the legislation of a foreign state or the Republic of Kazakhstan, if such joint activity is carried out on the territory of the Republic of Kazakhstan.

If the place of provision of services or work is not indicated in one of the above-mentioned points, then the place of provision of services, performance of work in the territory of the Republic of Kazakhstan, through employees or other personnel hired by a non-resident for such purposes, is recognized as a permanent establishment of a non-resident, if activities of this nature continue in the territory Of the Republic of Kazakhstan more than one hundred and eighty three calendar days within any consecutive twelve month period from the date of commencement of entrepreneurial activity within the framework of one project or related projects.

If a non-resident carries out activities through a structural unit that does not lead to the formation of a permanent establishment in accordance with an international treaty governing the avoidance of double taxation and prevention of tax evasion, then the provisions of the Tax Code provided for a permanent non-resident institutions. At the same time, such a structural unit has the right to apply the provisions of an international treaty regulating issues of avoidance of double taxation and prevention of tax evasion.

Dependent agent

If a non-resident carries out business activities on the territory of the Republic of Kazakhstan through a dependent agent, then such a non-resident will be considered as having a permanent establishment in connection with any activity that the dependent agent carries out for this non-resident, regardless of the timing of such activities.

A dependent agent is an individual or legal entity who, on the basis of contractual relations , is authorized to represent the interests of a non-resident in the Republic of Kazakhstan, to act and (or) perform certain legal actions on behalf and at the expense of a non-resident, including concluding an agreement for the provision of services for a fee or playing a major role in concluding such an agreement or transferring ownership (right to use) property belonging to a non-resident on the basis of ownership (right to use), except when such activity is carried out by him within the framework of the customs a representative, a professional participant in the securities market and other brokerage activities, with the exception of the activities of an insurance broker and cases when such an agent acts exclusively or primarily on behalf of a non-resident.

II. The activities of a non-resident carried out in the territory of the Republic of Kazakhstan through a subsidiary established in accordance with the legislation of the Republic of Kazakhstan, leads to the formation of a permanent establishment of a non-resident, if the subsidiary is recognized as a dependent agent in accordance withparagraph 3 of Article 220 of the Tax Code of the Republic of Kazakhstan.

III. A non-resident forms a permanent establishment in the Republic of Kazakhstan when selling goods at exhibitions and fairs held on the territory of the Republic of Kazakhstan, if such sale lasts more than ten calendar days.

IV. The following types of non-resident's activities, which are exclusively preparatory or auxiliary in nature, are not part of the main types of business activities of a non-resident and last no more than three years, do not lead to the formation of a permanent establishment of a non-resident in the Republic of Kazakhstan:

  1. use of any place solely for the purpose of storing and (or) displaying goods belonging to a non-resident, without selling it;
  2. maintaining a permanent place of business solely for the purpose of purchasing goods for a non-resident without selling them;
  3. the maintenance of a permanent place of business solely for the collection, processing and (or) dissemination of information, advertising or market research for goods, works, services sold by a non-resident.
Taxation

Kazakhstan has one of the most competitive tax regimes in the region.

Comparison of the main tax rates in Kazakhstan, Russia and China

Tax

Kazakhstan

Russia

China

CIT

twenty%

twenty%

25%

VAT

12%

twenty%

thirteen%

Land tax

$ 0.03- $ 0.16 / 1 m 2

0.3%, 1.5%

-

Property tax

1.5%

2.2%

1.2% *, 12% **


*assessed value, **rental property

Source: Ministry of Finance of the Republic of Kazakhstan, Federal Tax Service of Russia, State Administration of Taxation of the People's Republic of China

Currently, the Republic of Kazakhstan has 55 Conventions for the avoidance of double taxation and the prevention of tax evasion on income and capital, concluded with foreign states. Elimination of double taxation is a procedure when each of the contracting states provides the taxpayer with the opportunity to pay tax only once - in one of the contracting states. A complete list of Conventions is available on the official website of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan.

More details: https://kgd.gov.kz/en/content/conventions-avoidance-double-taxation-and-prevention-fiscal-evasion-respect-taxes-income-and

National legislation

The tax legislation of the Republic of Kazakhstan is based on The Constitution Of the Republic of Kazakhstan, consists of the Law of the Republic of Kazakhstan "On taxes and other obligatory payments to the budget" (Tax Code), as well as regulatory legal acts, the adoption of which is provided for by the Tax Code.

On December 25, 2017, the President of the Republic of Kazakhstan signed and put into effect the New Tax Code, which was developed within the framework of the President's Address “Kazakhstan in a new global reality: growth, reforms, development” and the Plan of the Nation “100 Concrete Steps” to implement five institutional reforms. The most significant change is that the interpretation of all uncertainties and unresolved issues of tax legislation will be in favor of taxpayers. Also, the New Tax Code provides for the stimulation of the taxation regime for subsoil users and other sectors, an increase in the time for taxpayers to study the changes introduced to legislation during the year, and also simplified tax administration.

More details: https://kgd.gov.kz/en/content/tax-code-rk-2015

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