Kazakhstan

On 12 December 2023, the President of Kazakhstan signed a law introducing the following significant changes in the Kazakhstan Tax Code entering into force on 1 January 2024 (including retrospective changes):

• Tax deduction of expenses related to purchase of ‘intangible’ services from affiliated non-resident parties, registered in blacklisted countries, is limited as an adjustment of the taxable income within the amount not exceeding 3% of the taxable income. The Law defines expenses on ‘intangible’ services as costs of management, consulting, audit, design, legal, accounting, advocacy, advertising, marketing, franchising, financial (except for interest expenses), engineering, agency services, royalties, and transfer of intellectual property (IP) rights (retrospective from 1 January 2023).

• Dividend income on securities that are listed on the official stock exchanges functioning on the territory of Kazakhstan is exempt from taxation irrespective of whether such securities were traded on the stock exchange or not. The change in taxation was applied in a retrospective way from 1 January of 2023.     
• Interest income of non-residents on securities that are listed on the official stock exchanges functioning on the territory of Kazakhstan is subject to exemption from taxation at the source of payment only if there is trading on the stock exchange within the tax period in accordance with the criteria determined by the Kazakhstan government.
• The list of types of income that are not income from a source of the Republic of Kazakhstan, subject to reflection in tax reporting, has been increased by the following types of income:
• The amount of income tax calculated from the income of a non-resident and paid to the budget by the tax agent at one’s own expense without withholding such income tax. 
• Compensation for expenses management members incurred in connection with the performance of the management duties assigned to them by the resident (e.g. travel expenses, rental housing, daily allowances.).
• Non-resident income received from autonomous, non-profit organisations, as well as Astana International Financial Centre (AIFC) authorities and organisations.
• The value of property received in the form of a contribution to the authorised capital of a non-resident, as well as the value of property received by a non-resident issuer from the placement of shares issued by it.