Taxation in Kazakhstan

The main legal act establishing and regulating taxation in Kazakhstan is the Code of the Republic of Kazakhstan On Taxes and Other Obligatory Payments to the Budget (the “Tax Code”). The Tax Code was adopted on 10 December 2008 and came into effect as of 1 January 2009.

Historical Development

Kazakhstan declared its sovereignty as a member of the USSR in October 1990, and following the dissolution of the Soviet Union the country declared independence in December 1991. The first piece of Tax Legislation of the sovereign republic was the 1991 decree “On Taxes from Enterprises, Associations and Organizations”.

In 1995 the President issued a Decree “On Taxes and Other Obligatory Payments to the Budget" (the “Decree”), which regulated the tax system in Kazakhstan. The Decree only provided for general information on taxes and referred to several instructions which provided for specific information on each of the taxes.

In 2002 the Code of the Republic of Kazakhstan On Taxes and Other Obligatory Payments to the Budget (the “2002 Tax Code”) came into force. The 2002 Tax Code was a more comprehensive legal act than the Decree. In fact, the 2002 Tax Code regulated the relationships between the state and the taxpayer and provided for procedures on calculation and payment of taxes.

In 2008 the President announced that the Republic of Kazakhstan requires a new tax code, which should provide for lower tax rates and simplified tax administration procedures. As a result, the Code of the Republic of Kazakhstan On Taxes and Other Obligatory Payments to the Budget (the “Tax Code”) was adopted on 10 December 2008 and came into force as of 1 January 2009.

Types of Taxes

Corporate income tax	The corporate income tax rate amounts to 20% in 2010, both for resident legal entities and non-resident legal entities operating in Kazakhstan through a registered permanent establishment (for non-residents also see branch profit tax below).
Value added tax	The value added tax rate is 12% and applies to sales turnover in Kazakhstan and to imports of goods and services to Kazakhstan. The turnover threshold for registering as a value added tax payer is KZT 38,190,000 or, approximately EUR 195,000. Export of goods is subject to 0% value added tax rate.
Personal income tax	Personal income tax is 10% for residents and 15% for non-residents.
Social tax	The social tax rate is paid by legal entities and amounts to 11% of salaries and in-kind benefits of employees.
Branch profit tax	A branch profit tax of 15% has to be paid on the net income after corporate income tax of permanent establishments of foreign legal entities operating in Kazakhstan.
Income tax withheld at source of payment	Income tax withheld at source of payment is levied on the income of non-residents from Kazakhstani sources. The tax rate is currently 15% in most cases. For residents of “tax havens” the tax rate is 20%. A lower tax rate of 5% applies to income from insurance premiums payable in accordance with reinsurance risk agreements and to income from international transportation services
Property tax	Property tax applies only to the buildings and the tax rate is 1,5% for legal entities.
Excise	Excise tax applies to alcohol (up to EUR 3 per liter), liquors (up to EUR 2,5 per liter), tobaccos (up to EUR 0,5 per piece), gasoline (up to EUR 25 per ton), crude oil (EUR 0 per ton), gas condensate (EUR 0 per ton) vehicles with engine volume of over 3 liters (EUR 0,5 per cubic centimeter of engine volume) produced in Kazakhstan or imported to Kazakhstan.
Rental tax on exports	The rental tax applies to export of crude oil, gas condensate and coal. The tax rate depends on the market price of crude oil and gas condensate (from 0% when the market price of one barrel is USD 20 to 32% when market price for one barrel is USD 200 or higher).
Subsurface use taxation	The subsurface use taxes include signature bonus and commercial discovery bonuses, payments to compensate historic costs, tax on the production of minerals and an excess profit tax.
Vehicle tax	The vehicle tax is levied based on engine volume, vehicle weight or quantity of seats.
Land tax	Land tax applies to legal entities possessing plots of land or the right to use them.
Other taxes, state fees and dues	Other taxes include among others special taxes for gambling businesses. The state further levies different kinds fees on registration, licensing, environment pollution, for the use of water resources, forests etc.

References

(Russian) Chamber of Kazakh Tax Advisers
(English) Paying Taxes in Kazakhstan

Taxation in Europe

Sovereign states	Albania Andorra Armenia Austria Azerbaijan Belarus Belgium Bosnia and Herzegovina Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Georgia Germany Greece Hungary Iceland Ireland Italy Kazakhstan Latvia Liechtenstein Lithuania Luxembourg Macedonia Malta Moldova Monaco Montenegro Netherlands Norway Poland Portugal Romania Russia San Marino Serbia Slovakia Slovenia Spain Sweden Switzerland Turkey Ukraine United Kingdom

States with limited recognition	Abkhazia Kosovo Nagorno-Karabakh Republic Northern Cyprus South Ossetia Transnistria

Other entities	European Union

Taxation in Asia

Sovereign states	Afghanistan Armenia Azerbaijan Bahrain Bangladesh Bhutan Brunei Cambodia China Cyprus East Timor (Timor-Leste) Egypt Georgia India Indonesia Iran Iraq Israel Japan Jordan Kazakhstan North Korea South Korea Kuwait Kyrgyzstan Laos Lebanon Malaysia Maldives Mongolia Myanmar Nepal Oman Pakistan Philippines Qatar Russia Saudi Arabia Singapore Sri Lanka Syria Tajikistan Thailand Turkey Turkmenistan United Arab Emirates Uzbekistan Vietnam Yemen

States with limited recognition	Abkhazia Nagorno-Karabakh Northern Cyprus Palestine South Ossetia Taiwan

Dependencies and other territories	British Indian Ocean Territory Christmas Island Cocos (Keeling) Islands Hong Kong Macau

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