The concept of new Tax Code in Kazakhstan

On 10 April 2017 SCHNEIDER GROUP organized a Tea Time in our Almaty office. The event was dedicated to the concept of the new Tax Code of Kazakhstan which is expected to enter into force on 1 January 2018. As of yet there is no draft code but only conceptual parts discussed between tax authorities and the business community, discussions covering VAT, social tax, international taxation and transfer pricing.

The new Tax Code is driven by Kazakhstan’s recent accession to WTO, joining BEPS initiatives, the need to improve administration of taxes, further development of electronic tax filing and invoicing, and an overall shift of the tax burden from the mining industry to other industries.

VAT undergoes considerable changes in terms of the abolishment of benefits for the agricultural sector, place of service rules, and taxable sales. The social tax base is widening to cover more payments and benefits paid not only to employees but also individuals working with companies under civil contracts. With regard to international taxation, escrow bank account mechanism for WHT will be abolished, tax paid confirmation process and tax residence certificate requests will be simplified and accelerated. Transfer pricing law will implement reporting within BEPS framework such as master file, local, and country-by-country reports.

It should be noted that amendments to the tax law related to social tax and VAT have already raised concerns of the business community. They are perceived as demotivating and worsening the investment attractiveness of Kazakhstan. However, the overall impression is that the new Tax Code is a step forward compared to current tax law.

Click on the button below to download the presentation from the event about The concept of new Tax Code (in Russian).

Almabek Zhabbarov
Associate Tax & Legal Director, Kazakhstan
+7 727 355 44 48