Is an individual required to register as an individual entrepreneur, if they do not use the labor of hired workers, receives income, but the income received exceeds 360 times the amount of the MCI?
Question: An individual does not use the labor of hired workers, and receives income from the sale of goods, performance of work, and provision of services to persons who are not tax agents. Is such a person required to register as an individual entrepreneur if the income received exceeds 360 times the MCI?
Answer: Based on paragraph 2 of Article 35 of the Entrepreneurial Code of the Republic of Kazakhstan dated 29.10.2015 No. 375-V SAM, individuals meeting one of the following conditions are subject to mandatory state registration as an individual entrepreneur if:
1.they use the labor of hired workers on a permanent basis;
2.have an annual income from private entrepreneurship, calculated in accordance with the tax legislation of the Republic of Kazakhstan, in an amount exceeding 360 times the monthly calculation index established by the law on the republican budget and effective on January 1 of the relevant financial year.
At the same time, in accordance with paragraph 3 of Article 35 of the Entrepreneurial Code, an individual who does not employ workers on a permanent basis has the right not to register as an individual entrepreneur in case of obtaining the following income established by the Tax Code:
1.income subject to taxation at the source of payment;
2.income subject to taxation by an individual independently.
According to the norms of the Tax Code, income subject to taxation by an individual independently includes, among other things, income from the sale of goods, performance of works, and provision of services to persons who are not tax agents.
Thus, an individual may not register as an individual entrepreneur at all in case of obtaining income subject to taxation by an individual independently, regardless of the amount of income received.