Kazakhstan

On 11 July 2022, the President of Kazakhstan signed a law introducing the following significant developments in the Kazakhstan Tax Code (to be effective from 2023):

• Tax exemption on dividends paid to non-residents would be replaced by the possibility to apply a reduced tax rate of 10% upon a three-year holding period.
• Application of tax exemption on dividends from securities listed on the Kazakhstan Stock Exchange (KASE) / Astana International Exchange (AIX) is retained (active trade of securities is required).
• Tax deduction of expenses related to purchase of ‘intangible’ services from affiliated non-resident parties would be limited as an adjustment of the taxable income within the amount not exceeding 3% of the taxable income. The draft 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.
• Mineral extraction tax rates for metal ores would be increased. At the same time, it is proposed to provide a 0% mineral extraction tax rate for new projects on low-margin mineral deposits until the enterprise reaches 15% profitability.
• Digital mining tax rates would be increased depending on the electricity prices and their sources.