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 2019, all VAT payers should issue VAT invoices in electronic format (‘e-invoices’).
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, the 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 2020 is retained at 30,000 Monthly Calculation Indices (MCI; starting from 1 April 2020, 1 MCI = 2,778 Kazakhstan tenge [KZT]). For individual entrepreneurs using special tax regimes, the VAT threshold is set at 114,184 MCI.
Starting from 2022, the threshold will be reduced to 20,000 MCI.
The VAT reporting period is a calendar quarter.
The 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 World Trade Organization (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.
According to Order #1024 dated 19 October 2020 “On Rules and terms of implementation of Pilot project on administration of taxpayers importing goods into the EAEU customs territory with the application of a risk management system”, the Kazakhstan tax (customs) authorities conducted a pilot project on goods imported to the Eurasia Economic Union starting from 3 November 2020.
Under the Pilot project, the authorities carry out desk-top audits via an automated comparison and analysis of data indicated in tax and customs returns filed by the taxpayer. If this results in high score under the risk management system, a notification on deemed tax violations may be issued to the taxpayer. Failure to respond to the notification in time may result in the taxpayer’s bank accounts being blocked by the tax authorities.
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 KZT 24,935 per tonne|
|Alcoholic beverages and beer, tobacco||KZT 0 to KZT 9,900 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 Pension Centre of Pension Payments. Obligatory social insurance contributions are capped at 3.5% of seven times the minimum monthly wage (approximately 711 United States dollars [USD]) per month, and are deductible from social tax. Only Kazakhstan citizens, foreigners holding a residence permit in Kazakhstan, and citizens of member countries (i.e. Russia, Belarus, Armenia, and Kyrgyzstan) of the Eurasian Economic Union (EAEU or EEU), who have a local employment agreement, are subject to obligatory social insurance.
Obligatory pension contributions (OPC)
OPC 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 OPC is capped at 50 times the minimum monthly wage (approximately USD 5,079) per employee per month. Only Kazakhstan citizens and foreigners holding a residence permit in Kazakhstan are subject to OPC.
In addition, individuals who are working under a service agreement (providing services on a Civil Contract basis) should not make OPC to the State Pension Centre in their own favour. Starting from 2019, OPC for these individuals should be done by a tax agent (company with which the contract is concluded).
Besides that, the employer is required to allocate 5% of one's own resources as OPC to the employees engaged in jobs with harmful (especially harmful) work conditions.
Obligatory social medical insurance contributions (OMIC)
Starting from 1 January 2020, employer’s OMIC are increased to the rate of 2%. All employers, including branches and representative offices, should pay OMIC for all their employees, including Kazakhstan citizens and foreigners holding Kazakhstan residence permit, or citizens of member countries of the Eurasian Economic Union. The monthly income accepted for calculating deductions and contributions should not exceed ten times the minimum monthly wage (in 2020, the calculation of income is not more than KZT 425,000).
Starting from 1 January 2020, employee OMIC are withheld at a rate of 1% out of employees' gross income and paid to the Social Health Insurance Fund. The gross income subject to employee OMIC is capped at ten times the minimum monthly wage per employee per month. Subject to employee OMIC are Kazakhstan citizens, foreigners holding Kazakhstan residence permit, and citizens of member countries of the Eurasian Economic Union.
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%.
The amendments to the Tax Code introduced maximum MET rate of 1 MCI per cubic metre under certain conditions, as well as other reduced rates for specific cases, which simplifies the administrative procedure of tax liability calculation, with retrospective effect starting from 1 January 2018.