Individual - Significant developments

Last reviewed - 05 January 2021

Law no. 28/20, of 20 July, published in the Official Gazette, amends the Employment Income Tax Code, approved by Law no. 18/14, of 22 October. It also revokes Law no. 9/19 of 24 April, and Law no. 28/19 of 25 September, both Laws having previously amended the Employment Income Tax Code. Among the several measures we highlight the following:

  • The tax base on income earned by the employees or service providers is extended. Cashier’s allowances, severance payments, and the full amount of housing allowances (previously only subject in 50% of the rental contract amount) are now subject to tax;
  • The minimum threshold for taxation of employment income (Group A) increases from Kz 35 001 to Kz 70 001;
  • Additionally, the minimum tax rate for employment income increases from 7% to 10% (applicable from Kz 70 001) and the maximum rate increases from 17% to 25% (applicable from Kz 10 000 001), with relevant increases also in the fixed amounts of each tax bracket;
  • Self employment income of Groups B and C is subject to a withholding tax rate of 6.5% on the amount of the service provided when paid by entities with organized or simplified accounting model;
  • The taxable income of self-employed individuals of Groups B and C not subject to withholding tax is liable to a 25% tax rate;
  • Group B and C taxpayers with organized accounts may be subject to the provisions of Corporate Income Tax Code for the assessment of the taxable income; the taxpayers of those are allowed to deduct 30% of the costs if they have simplified accounts or record books; in all other cases they are not allowed to deduct any costs;
  • Services acquired from non residents, as foreseen in the Corporate Income Tax Code, are subject to a tax at the rate of 15%;
  • The list of activities taxed under Group B was extended;
  • The deadlines for submitting tax returns and payments have changed from the last day of the month to the last working day of the month.

This law entered into force 30 days after its publication.