Kazakhstan

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. sales of medicines, financial services provided by financial institutions, financial leasing services, notary and advocacy services, operations with financial securities and investment gold, loan transactions).

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.

A new clause in the Tax Code from 2022 introduces the notion of 'traceability of the turnover of goods imported into the customs territory of the Eurasian Economic Union (EAEU or EEU)'. The national traceability system would be the electronic invoice information system. E-invoice is an accompanying document of the national tracing system. The tax authorities should ensure provision of data on goods subject to tracing and associated turnover transactions contained in the E-Invoicing System to the respective EAEU states.

Since 2022, issuance of e-invoices is not required upon sale of (i) goods from the list of exclusions, (ii) imported goods, and (iii) goods of non-VAT payers reflected in a VW module if such goods are sold to:

• individuals using purchased goods for own, family, home, or any other purposes not related to business operations, or
• individuals or legal entities being subjects of micro-entrepreneurship.

In addition, Kazakhstan launched a pilot project for issuance of e-waybills on importation, shipment, and export of goods from Kazakhstan. A different timeline of the pilot project is envisaged for different categories of goods.

From 2022, minimum prices apply to certain goods imported to Kazakhstan from the Eurasian Economic Union for determination of VATable import. Currently, the list includes only certain types of spirits and alcohol, but the list could potentially be amended in future.

From 2022, VAT on electronic sale of services and goods is introduced (the so-called 'Google Tax'). The tax will be assessed and paid by foreign companies rendering services to Kazakhstan individuals in electronic format or by foreign companies owning Internet platforms through which Kazakhstan individuals purchase goods.

The payer of the VAT shall calculate the Google tax if one of the following conditions is met:

• The place of residence of the individual buyer is the Republic of Kazakhstan.
• The location of the bank in which the bank account is opened, used by the individual buyer to pay for services, or the electronic money operator through which the individual buyer pays for services is the territory of the Republic of Kazakhstan.
• The network address of the individual buyer used in the purchase of services is registered in the Republic of Kazakhstan.
• The international country code of the telephone number (including mobile) used to purchase or pay for services is assigned by the Republic of Kazakhstan.

Issuance of invoices by the payer of Google tax is not required. A foreign company is required to pay the calculated Google tax for each quarter no later than the 25th day of the second month following the quarter in which the sale of goods and services was carried out.

The obligatory VAT registration threshold in 2024 is set at 20,000 times the Monthly Calculation Index (MCI). For individual entrepreneurs using special tax regimes, the VAT threshold is set at 124,184 times the MCI.

The VAT reporting period is a calendar quarter.

Customs duties

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 (USD).

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.

Customs fees

A customs processing fee is assessed at 20,000 Kazakhstan tenge (KZT) 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 Eurasian 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 a 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

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.

Property tax

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.

Land tax

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.

Transfer taxes

There are no transfer taxes in Kazakhstan.

Stamp taxes

There are no stamp taxes in Kazakhstan.

Social tax

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). The minimum limit for calculating social tax is 14 times the MCI * 9.5% (approximately USD 10).

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 (MMW) at maximum limit (approximately USD 45). The minimum limit is at 1% of MMW * 3.5% (approximately USD 6) 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, 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 MMW (approximately USD 9,239) per employee per month. 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, who have a local employment agreement, 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).

Obligatory Employer Pension Contributions (OEPC)

Starting from 1 January 2024, the employer shall pay OEPC at the rate of 1.5%. Income accepted for calculating the OEPC includes all types of wages in monetary terms and other income. At the same time, the monthly income accepted for calculating the OEPC must be no less than the MMW and must not exceed 50 times the MMW established for the corresponding financial year by the law on the republican budget. Exempt from paying OEPC are individuals who have reached retirement age, individuals with disabilities of the first and second groups, military personnel, employees of special government and law enforcement agencies, and individuals over 48 years of age.

Obligatory Professional Pension Contributions (OPPC)

The employer is required to allocate 5% of one's own resources as OPPC to the employees engaged in jobs with harmful (especially harmful) work conditions. The list of positions subject to OPPC is published by the authorised state authority. Income accepted for calculating the OPPC includes all types of wages in monetary terms and other income. At the same time, the monthly income accepted for calculating the OPPC must be no less than the MMW and must not exceed 50 times the MMW established for the corresponding financial year by the law on the republican budget.

Obligatory social medical insurance contributions (OMIC)

Starting from 1 January 2022, employer’s OMIC are increased to the rate of 3%. For 2024, the rate is the same 3%. 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 OMIC should not exceed ten times the MMW (in 2024, the calculation of income is not more than KZT 850,000). 

Starting from 1 January 2021, for 2022, 2023, and 2024, employee OMIC are withheld at a rate of 2% 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 MMW 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

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 21.06%.

The amendments to the Tax Code introduced a 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.

The application of MET rates effective as of 31 December 2022 is possible if the field of solid minerals is classified as low profit (5% or less).

The criteria for providing incentives for exemption from MET for new fields with a link to the level of the internal profitability rate were introduced.

The tax on digital mining

Starting from 2022, entities engaged in digital mining (i.e. mining of cryptocurrencies) are required to pay the digital mining tax, which is charged for the amount of electrical energy consumed during the mining process.

The tax rate is set at KZT 2 per kilowatt-hour of electrical energy consumed depending on the amount of electricity consumed. The tax period is a calendar quarter. The tax is payable not later than the 20th day of the month following the reporting quarter.

The persons engaged in digital mining have the obligation to submit a declaration of payment for digital mining (form 880.00), which is carried out to the body of state income at the location of the taxpayer. Submission deadline is quarterly, no later than the 15th day of the second month following the reporting quarter.

The tax is payable not later than the 25th day of the second month following the reporting quarter.