The tax year in Kazakhstan is the calendar year.
Annual CIT declarations are due by 31 March of the year following the tax year-end. However, a taxpayer may take a 30 calendar-day extension of the deadline upon request.
Certain taxpayers are required to submit their estimated calculations of monthly advance payments of CIT.
The deadline for the majority of other tax returns is the 15th calendar day of the second month following the reporting period (usually the calendar quarter). However, a taxpayer may take a 15 calendar-day extension of the deadline upon request.
Payment of tax
CIT advance payments are due every 25th day of the month. Taxpayers with aggregate annual income during the tax period preceding the previous tax period of less than 325,000 times the MCI established for the relevant financial year (approximately USD 2.2 million) are exempt from the obligation to calculate and pay CIT advance payments. Payment of any outstanding CIT liabilities is required within ten calendar days following the submission of the annual CIT declaration (i.e. 10 April).
Most other taxes are payable by the 25th day of the second month following the end of the reporting period (calendar quarter).
Fines and interest penalties
Late payment interest is reduced from 2.5 to 1.25 times the refinancing rate set by the National Bank per day of delay.
Starting from 21 July 2020, the National Bank refinancing rate has been set at 9% per annum.
Substantial fines are imposed for understatement of tax liabilities. Generally, the fines amount to 80% of the understated tax, with lower rates for small and medium-sized businesses.
For advance CIT payments, an administrative fine of 20% applies for understated advance tax payments as compared to the finally declared CIT, provided the understated amount is greater than 20% of the final declared amount.
If a taxpayer is deemed to have concealed taxable income, a fine of up to 200% of the concealed amount may be assessed. Small and medium-sized businesses have lower rates.
Tax audit process
Kazakhstan tax authorities have the right to conduct regular tax audits (at least once a year). There are two types of audits, selective and unplanned.
The tax authorities choose taxpayers for selective audits based on special risk assessment criteria. Information about misstatements in tax returns or any other discrepancy may trigger an unplanned tax audit.
From 2019, taxpayers (tax agents) are categorised by their activity as low, medium, or high risk, represented respectively with green, yellow, or red colour.
With respect to violations identified as a result of tax audit, the Tax Code introduced the following risk classification violations, for which various methods for elimination are provided:
- For high risk: Notification of the elimination of violations.
- For medium risk: Notification of violations.
The level of tax control for low-risk taxpayers is minimised.
Statute of limitations
The statute of limitations for tax purposes in Kazakhstan is three years (a five-year statute of limitations period applies to subsurface users and taxpayers on tax monitoring); it may be extended up to seven years in the part relating to transfer pricing matters. For taxpayers operating under subsurface use contracts, the tax authorities maintain the right to assess or revise the assessed amount of EPT and other taxes and obligatory payments to the state budget, where a methodology of calculation uses one of the following indices: internal rate of return (IRR) or internal revenue rate or R-factor (earning yield), during the effective period of a subsurface use contract and five years after the end of the effective period of the subsurface use contract.
Topics of focus for tax authorities
Tax audits may be comprehensive or thematic. Comprehensive tax audits cover all applicable taxes, while thematic tax audits may cover only some specific tax liabilities. As a rule, the Kazakhstan tax authorities are form, rather than substance, driven during tax audits.