Single Aggregate Payment

Payment of the SAP will mean the start of automatic registration of the activities of self-employed individuals, and in case of suspension of payment, the suspension of activities. These individuals are exempt from registration as individual entrepreneurs, and also do not submit tax reports.

According to Article 774 of the Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget” (further – Tax Code), payers of a single aggregate payment are acknowledged to be the individuals, who carry out entrepreneurial activities without registration as an individual entrepreneur, who simultaneously meet the following conditions:

• have paid a single aggregate payment;
• do not use the labor of hired workers;
• provide services exclusively to individuals who are not tax agents, and (or) sell agricultural products of their own personal subsidiary farming, with the exception of excisable products, exclusively to individuals who are not tax agents.

      The amount of income of the payer of a single aggregate payment received as a result of the types of activities specified in subparagraph 3) of paragraph 1 of this article for a calendar year must not exceed 1175 times the monthly calculation index (2,966,875 KZT) established by the law on the republican budget and effective as of January 1 of the relevant financial year.

The followings are not recognized as payers of a single aggregate payment:

• persons carrying out the types of activities specified in subparagraph 3) of paragraph 1 of this article on the territory of commercial properties, as well as retail facilities, including those under the right of ownership, lease, use, trust management;
• persons leasing a property, with the exception of a dwelling place;
• persons engaged in private practice;
• foreigners and stateless persons, with the exception of repatriates (oralmans);
• persons having state registration as an individual entrepreneur.

Individuals are recognized as payers of the single aggregate payment from the day on which such payment was made until the last day of the month for which the single aggregate payment was made.

Also, Article 775 defines the procedure for calculating and paying a single aggregate payment

1. The single aggregate payment includes the payable sums of individual income tax and social payments.
2. The amount of a single aggregate payment for one month is 1-time the monthly calculation index in cities of republican and regional significance (2,525 KZT), the capital and 0.5-times the monthly calculation index - in other settlements (1,263 KZT).

In this case, the size of the monthly calculation index established by the law on the republican budget and valid as of January 1 of the corresponding financial year is applied.

3. The individual income tax of the payer of a single aggregate payment on income received (to be received) by him from the types of activities specified in subparagraph 3) of paragraph 1 of Article 774 of this Code is 10 percent of the amount of the single aggregate payment.
4. A single aggregate payment is subject to payment as a lump-sum by transferring through second-tier banks or organizations carrying out certain types of banking operations to the bank account of the State Corporation “Government for Citizens”.

Single aggregate payment shall be paid, distributed and transferred in the form of individual income tax and social payments, and also refunded in the manner determined by the Government of the Republic of Kazakhstan.

Also, according to Article 776 of the Tax Code, the competence of the State Corporation “Government for Citizens” is determined within the framework of a single aggregate payment

1. The State Corporation “Government for Citizens” within the framework of a single aggregate payment carries out the following types of activities related to the state monopoly:

• maintains a personalized record-keeping of payers of a single aggregate payment on the basis of an individual identification number;
• updates the personalized record-keeping of payers of a single aggregate payment;
• distributes and transfers the amount of a single aggregate payment to the State Social Insurance Fund, the Social Health Insurance Fund, the Unified Accumulative Pension Fund and the corresponding budget at the place of residence of the payer;
• refunds the erroneously (excessively) paid amounts of a single aggregate payment in the manner determined by the Government of the Republic of Kazakhstan.

2. Prices for works, services performed and (or) implemented by the State Corporation “Government for Citizens” are established by the authorized body which is determined by the decision of the Government of the Republic of Kazakhstan from among the central state bodies, upon agreement with the antimonopoly body and the authorized body.

A single aggregate payment – is the possibility to carry out own activities, receive earnings, notify the state about own activities and become a participant in social and health insurance. On January 1, 2019, a single aggregate payment began to operate in Kazakhstan.

The single aggregate payment is designed for people who work in personal subsidiary plots, unpaid family workers. That is, informally employed persons can carry out their activities without registering as an individual entrepreneur. This is a kind of fight against free riders by reducing the cost of tickets.

Individuals who are not registered with state bodies as individual entrepreneurs, but at the same time have a certain income. These include plumbers, shop assistants, or seamstresses working at home. After paying 2778 KZT to the treasury, they automatically receive the status of a self-employed person.

In addition, experts also note that the payment of a single aggregate payment is a voluntary measure. If desired, the SAP can be paid through second-tier banks, Kazpost offices, to the account of a state corporation or through a mobile application. At the same time, from the amount received, 10% will be individual income tax; 20% are social contributions; 30% are compulsory pension contributions and 40% are deductions for compulsory medical insurance.

By the way, from the beginning of the next year, it is planned to introduce compulsory social health insurance in Kazakhstan. And the SAP will allow individuals to automatically receive social security.

There are 2 important advantages to paying. Citizens who have paid a single aggregate payment automatically become users of social health insurance. When compulsory pension contributions are received, work experience will be considered. And that is very convenient.