Kazakhstan: Business Environment

Company Tax

20%

Tax Rate For Foreign Companies

Non-residents are only taxed on Kazakhstan-source income. Kazakhstan offers investment incentives in free trade zones in the form of total exemption from corporation tax and social tax as well as zero-rated property taxation. These incentives have specific expiry dates depending on the free trade area (between 2027 and 2043).
Non-residents without a permanent establishment in the country that receive income from sources in Kazakhstan are generally subject to income tax withheld at source of payment on Kazakhstan-sourced income.
Net income of a non-resident legal entity’s branch is subject to the 20% standard CIT rate and to a branch profits tax at a rate of 15% (bringing the effective rate to 32%; which may be reduced under a tax treaty).

Capital Gains Taxation

Capital gains are treated as normal income and taxed at the standard corporate tax rate of 20%. Capital gains realised from the sale of shares and participation interests in Kazakhstan that do not derive their value from subsurface use property and are held for more than three years may be exempt.

Main Allowable Deductions and Tax Credits

Documented expenses incurred to generate income are generally deductible.
Depreciation of tangible and intangible assets is tax-deductible (at rates ranging from 10% to 40%); however, the Kazakh Tax Code does not provide any arrangements for the amortisation of goodwill. Start-up costs, although not explicitly defined by the Kazakh Tax Code, are generally deductible.

Interest, receivables not recovered after a three-year deadline, fines (except those that go directly to the state budget) and taxes (except corporation tax, excess profits tax and taxes paid in jurisdictions with preferential tax treatment) are all tax-deductible. Donations to charitable organisations give rise to a reduction of the tax base, up to 4% of annual taxable income (3% for large taxpayers subject to monitoring). Payments to foreign affiliates are also deductible if they allow the company to earn income in Kazakhstan.

Tax losses can be carried forward for up to 10 years. The carryback of losses is not permitted.

Kazakhstan also offers investment incentives in free trade zones in the form of total exemption from corporation tax and social tax as well as zero-rated property taxation. These incentives have specific expiry dates depending on the free trade area (between 2027 and 2043).

Other Corporate Taxes

Oil and gas companies are subject to excess profits tax at rates ranging from 10% to 60%. The tax base is the portion of net income that exceeds 25% of the deductions for this tax.
Employers are required to pay a social tax equal to 9.5% of the employee's gross salary (the employer pays a surcharge equal to 5% of the gross wage when the employee is engaged in a hazardous activity). Contributions paid by the employer to the Social Security Fund are at an effective rate of 3.5% (capped at KZT 297,500) while those paid to the Health Insurance Fund amount to 2% (capped at KZT 425,000).

A property tax is levied at rates varying between 0.1% and 1.5% (most common rate) of the average net book value of the immovable property, depending on the taxpayer's activity. Property tax was levied at 0% in 2020 to legal entities and individual entrepreneurs using a property for conducting tourism, hotel and catering activities, as well as for legal entities and individual entrepreneurs in large retail facilities, shopping and entertainment centres, cinemas, theatres, exhibitions, fitness and sports facilities (COVID-19-related measure).
A land tax is also levied at varying rates according to the size, quality and use of land.

There is no stamp duty, however, the Kazakh authorities reserve the right to impose a levy on the distribution of certain legal documents by public institutions.
A mineral extraction tax applies to the monetary value of the extracted volume of crude oil, gas condensate, natural gas, minerals, and groundwater. Rates for crude oil and gas condensate range from 5% to 18% (with a 50% reduction for hydrocarbons supplied to domestic refineries); those for natural gas is set at 10% (reduced to 0.5%-1.5% for domestic sales); and those for coal and minerals that have undergone initial processing are between 0% and 18.5%.

Other Domestic Resources

Consult the Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

A lump-sum deduction based on the minimum monthly wage of KZT 42,500 or KZT 510,000 per year applies to all Kazakh tax residents.
Obligatory and voluntary pension contributions are deductible.
Insurance premiums paid by employees are deductible. Expenses for medical services are also deductible (capped at 94 times the monthly calculation index). Repayment of interest on housing is deductible.
Business expenses are only deductible for taxpayers that are registered as entrepreneurs.
For 2021, the minimum calculated indexes are as follows:
- minimum salary (MS): KZT 42,500
- rate of state basic pension payment: KZT 18,524
- minimum pension rate: KZT 43,272
- minimum subsistence level for the calculation of basic social payments rates: KZT 34,302.

Special Expatriate Tax Regime

Non-residents are generally subject to the same tax liabilities as residents, but only on their Kazakhstan-source income. Residents are taxed on their worldwide income.
Non-residents are taxed at 5% on insurance premiums under contracts of risk reinsurance and income from international transportation services; and 15% on insurance premiums under contracts of risk insurance, dividends, interest, royalties, and capital gains; otherwise, the rate is 20%.