Tell me, is it true that pension benefits from the UAPF are taxed? What proportion of citizens can count on tax deductions?
The Tax Code of the Republic of Kazakhstan defines payments attributable to income in the form of pension benefits subject to taxation and the tax rate applicable to income in the form of pension benefits.
Thus, according to Article 326 of the Tax Code, income in the form of pension benefits subject to taxation includes benefits made by UAPF:
1) from pension savings of taxpayers formed from: compulsory pension contributions in accordance with the legislation of the Republic of Kazakhstan; compulsory occupational pension contributions in accordance with the legislation of the Republic of Kazakhstan;
voluntary pension contributions in accordance with the terms of the agreement on pension provision at the expense of voluntary pension contributions;
2) individuals-residents of the Republic of Kazakhstan who have reached retirement age and left for a permanent place of residence outside the Republic of Kazakhstan in accordance with the Law of the Republic of Kazakhstan On Pension Provision in the Republic of Kazakhstan;
3) to individuals-residents of the Republic of Kazakhstan who have not reached retirement age and have left for permanent residence outside the Republic of Kazakhstan in accordance with the Law of the Republic of Kazakhstan On Pension Provision in the Republic of Kazakhstan;
4) to individuals in the form of pension savings inherited in the manner prescribed by the legislation of the Republic of Kazakhstan;
5) to individuals in the form of a lump sum benefit payment for the burial of a deceased person who has pension savings, in the manner prescribed by the legislation of the Republic of Kazakhstan.
According to Article 320 of the Tax Code, the taxpayer's income, with the exception of income in the form of dividends, received from sources in the Republic of Kazakhstan, is taxed at a rate of 10 percent.
According to paragraph 3 of Article 353 of the Tax Code, the amount of taxable income in the form of pension benefits from the UAPF is determined in the following order:
the amount of income in the form of pension benefits subject to taxation,
minus
the amount of the adjustment for individual income tax, provided for in paragraph 1 of Article 341 of the Tax Code.
minus
the amount of tax deductions in the manner and amount specified in paragraph 1 of Article 345 and in subparagraphs 2) and (or) 3) of paragraph 1 of Article 346 of the Tax Code;
According to Article 345 of the Tax Code, taxable income in the form of pension benefits is subject to a tax deduction in the following amounts:
1) for payments provided for by subparagraph 1) of Article 326of the Tax Code - in the amount of 14 times the monthly calculation indexestablished by the law on the republican budget and effective on the date of accrual of income in the form of a pension benefit, for each month for which the pension benefit is paid;
2) for payments provided for by subparagraph 2) of Article 326of the Tax Code - in the amount of 168 times the monthly calculation index established by the law on the republican budget and effective on the date of accrual of income in the form of a pension benefit.
The adjustment for individual income tax (hereinafter referred to as IIT) in accordance with subparagraph 18) of paragraph 1 of Article 341 of the Tax Code includes payments for burial, if there is a death certificate, within 94 times the amount of the minimum calculation indicator.
Also, in accordance with subparagraphs 2) and 3) of paragraph 1 of Article 346 of the Tax Code, standard tax deductions in the amount of 882 times the monthly calculation index for a calendar year are applied to the following recipients of pension benefits when determining the amount of taxable tax, based on the fact that the beneficiary on the date of payments from UAPF is:
- a participant in the Great Patriotic War and a person equated to them;
- a person awarded orders and medals of the former USSR for selfless work and impeccable military service in the rear during the Great Patriotic War;
- a person who worked (served) for at least six months from June 22, 1941 to May 9, 1945 and was not awarded orders and medals of the former USSR for selfless work and impeccable military service in the rear during the Great Patriotic War;
- a disabled person of I, II or III groups;
- a disabled child;
- one of the parents, guardians, trustees of a disabled child, - for each such disabled child until he/she reaches the age of eighteen;
- one of the parents, guardians, trustees of a person recognized as disabled due to "disabled since childhood" - for each such person during his life;
- one of the adoptive parents (adopters), - for each such person until the adopted (adopted) child reaches the age of eighteen;
- one of the adoptive parents who accepted orphans and children left without parental care into a foster family, - for each such person for the period of validity of the agreement on the transfer of orphans, children left without parental care to a foster family.
Article 351-1 of the Tax Code provides for the specifics of calculating, withholding and paying IIT from lump-sum pension benefits withdrawn by the contributor (beneficiary) from the UAPF in order to improve housing conditions and (or) pay for medical treatment, in the manner established by the Law on Pensions.
At the same time, the IIT is calculated by the UAPF by applying the rates established by Article 320 of the Tax Code (in the amount of 10%) to the amount of the lump sum pension benefit.
Withholding and transfer of IIT from the amounts of lump-sum pension benefits from the UAPF in accordance with paragraph 2 of Article 351-1 of the Tax Code are made by the UAPF in accordance with the application of an individual to withhold the IIT in one of the following ways:
1) at a time, no later than the day of making a lump-sum pension benefit in the manner prescribed by Article 351 of the Code;
2) monthly in equal installments for no more than sixteen years according to the schedule established by the UAPF for pension benefits.
IIT is withheld on the basis of an application for withholding IIT submitted by an individual to a tax agent represented by UAPF in the form established by the authorized body in agreement with the authorized body in the field of pension provision.
Please note that the following incomes of recipients of pension benefits are subject to PIT at a rate of 10 (ten) percent without tax deductions:
- benefits to individuals in the form of inherited pension savings, with the exception of persons specified in subparagraphs 2), 3) of paragraph 1 of Article 346 of the Tax Code;
- benefits to individuals who are non-residents of the Republic of Kazakhstan (subparagraph 3 of Article 655 of the Tax Code);
- lump-sum pension benefits withdrawn by the contributor (beneficiary) from the UAPF in order to improve housing conditions and (or) pay for medical treatment.
