Value-added tax (VAT)
The current VAT rate is 12%. This tax is applicable to the sales value of goods, works, and services, as well as to imports. Exports of goods and international transportation services are taxed at 0% VAT. There is a list of goods, works, and services exempt from VAT (e.g. financial services provided by financial institutions, financial leasing services, notary and advocacy services, operations with financial securities and investment gold, loan transactions).
Since 11 January 2016, taxpayers have been liable for issuance of electronic invoices (‘e-invoicing’) on certain goods listed by the government, which was the measure specifically taken by the government following Kazakhstan's accession to the World Trade Organization (WTO), as well as lowering of customs duties on approximately 1,500 products. E-invoicing is obligatory for all categories of taxpayers from 2019.
VAT payers issuing e-invoices who are involved in sales of certain types of goods (specifically listed in the order of the Ministry of Finance) should register these goods within the Virtual Warehouse (VW) module. If such goods are not in the VW module, their sale is impossible, as the e-invoicing information system prevents a taxpayer from issuing an e-invoice for goods that are not recognised in the VW module.
Starting from 1 January 2018, Tax Code introduced VAT control accounts (analogue of Azerbaijan VAT deposit account) as an alternative option of VAT refund from the state (which is still applicable, subject to certain criteria). This measure is aimed at tracing VAT payments between suppliers and customers and remittance of VAT to the state. Taxpayers may opt for using VAT control accounts on a voluntary basis.
The obligatory VAT registration threshold in 2019 is retained at 30,000 Monthly Calculation Indices (MCI; currently, 1 MCI = 2,525 Kazakhstan tenge [KZT]). For individual entrepreneurs using special tax regimes, the VAT threshold is set at 114,184 MCI.
The VAT reporting period is a calendar quarter.
The new Kazakhstan Customs Code and the Customs Code of the Eurasian Economic Union implemented a number of progressive provisions intended for simplification of customs procedures, integration of information technology (IT) initiatives, and reduction of ‘red tape’ issues in customs control procedures from January 2018.
In April 2018, full-scale electronic declaration was launched for all customs procedures through Information System ‘Astana - 1’.
The Customs Code of the Eurasian Economic Union conceptually changed the definition of a ‘customs declarant’, which may significantly impact business models of supply chains and logistics.
Finally, the new provisions allow an entity that is qualified as an ‘authorised economic operator’ to apply simplified customs procedures.
Kazakhstan is a WTO member.
Customs duties apply to goods imported to the Customs Union countries from third countries. Customs duties rates are established either based on a percentage (in general, ranging between 0% and 40%; higher rates exist for certain goods) of the customs value of goods or in absolute terms in Euros (EUR) or US dollars.
Goods of the Customs Union countries should be generally exempt from Kazakhstan customs duties.
In addition to membership in the Customs Union, Kazakhstan concluded a number of bilateral and multilateral Free Trade Agreements with the Commonwealth of Independent States (CIS), which provide for exemption of goods circulated between the CIS member states from customs duties, provided certain conditions are met.
The ATA Carnet temporary import system is launched in Kazakhstan. This system allows the duty-free temporary import and export of goods for specific purposes.
A customs processing fee is assessed at KZT 20,000 for full customs declaration.
Excise taxes apply to the sale and import of crude oil, gas condensate, petrol/gasoline (excluding aviation fuel), diesel fuel, spirits and alcoholic beverages, beer, tobacco, and passenger cars.
|Type of excisable good||Excise tax rate|
|Crude oil, gas condensate, petrol/gasoline, diesel||KZT 0 to 11,000 per tonne|
|Alcoholic beverages and beer, tobacco||KZT 0 to 8,700 per item of measure (kilos, litres, or units)|
|Passenger cars||KZT 100 per each cm³ of engine capacity|
Property tax is assessed annually at a general rate of 1.5% of the average net book value of immovable property.
Property tax objects include buildings and constructions in actual use, even if not registered with the justice authorities.
Entities and individuals that own land plots (or land share in cases of commonly shared ownership of land plots) must pay land tax annually. Land tax rates vary based on the purpose for which the land is used, as well as the size and quality of the land.
There are no transfer taxes in Kazakhstan.
There are no stamp taxes in Kazakhstan.
Employment income (salary, compensation, etc.) is subject to withholding individual income tax paid at source. Tax paid at source should be calculated, withheld, and remitted by the Kazakhstan company acting as a tax agent at the rate of 10%.
Employers must pay social tax at the rate of 9.5% of gross remuneration (salaries and certain benefits provided) of all employees (local and expatriate).
Obligatory social insurance contributions
Obligatory social insurance contributions are payable by employers at the rate of 3.5% to the State Fund of Social Insurance. Obligatory social insurance contributions are capped at 3.5% of the minimum monthly wage (approximately 4 United States dollars [USD]) per month, and are deductible from social tax. Only Kazakhstan citizens and foreigners holding a residence permit in Kazakhstan are subject to obligatory social insurance.
Obligatory pension contributions
Obligatory pension contributions are withheld at a rate of 10% out of employees’ gross income and paid to the State Pension Centre of Pension Payments. The gross income subject to obligatory pension contributions is capped at 50 times the minimum monthly wage (approximately USD 5,500) per employee per month. Only Kazakhstan citizens and foreigners holding a residence permit in Kazakhstan are subject to obligatory pension contributions.
Obligatory social medical insurance contributions
Obligatory social medical insurance contributions should be made by employers at own cost based on the following rates:
- From 1 January 2018: 1.5% of employees’ salary.
- From 1 January 2020: 2% of employees’ salary.
- From 1 January 2022: 3% of employees’ salary.
Obligatory social medical insurance contributions should also be withheld from employees’ gross income and paid by employers at the following rates:
- From 1 January 2020: 1% of employees’ salary.
- From 1 January 2021: 2% of employees’ salary.
Vehicle tax rates are based on MCI and determined in accordance with the type of vehicle, engine volume, operation period of vehicles (aircraft only), and other factors.
Mineral extraction tax (MET)
MET applies to the monetary value of extracted volume of crude oil, gas condensate, natural gas, minerals, and groundwater.
MET is calculated based on the value of the extracted content, which is computed by applying average global prices to the extracted volume (adjusted for content). The determination of average global prices is based on the list of publications that are considered as official sources for computation of MET (Platts Crude Oil Marketwire and Crude Argus).
Currently, MET rates for crude oil and gas condensate range from 5% to 18%, depending on the accumulated production volume for the calendar year. For hydrocarbons, rates can be reduced by 50% if they are supplied to domestic refineries on the basis of a sale/purchase agreement or tolling agreement.
The MET rate for natural gas is set at 10%. For domestic sales of natural gas, MET rates range from 0.5% to 1.5%.
MET rates for minerals that have undergone initial processing (except for widespread minerals) and for coal vary between 0% and 18.5%.