1. Question: Until 2026, the sale of veterinary medicinal products was exempt from VAT. Is such an exemption предусмотрено in 2026?
Answer: Under subparagraph 34) of Article 394 of the Tax Code, in force until January 1, 2026, supplies of medicinal products used in veterinary practice were exempt from VAT. The Tax Code effective from January 1, 2026, does not contain analogous provisions.
Therefore, starting from January 1, 2026, no VAT exemption is предусмотрено for the sale of veterinary medicinal products, and the turnover from their sale is subject to VAT.
2. Question: The sale of medicinal products within the framework of the Guaranteed Volume of Free Medical Care (GVFMC) is exempt from VAT. However, in practice, a purchaser may buy medicinal products with co-payment at a higher price, with partial reimbursement of the cost within the GVFMC from the budget. Is such co-payment amount subject to VAT?
Answer: From January 1, 2026, the sale of medicinal products within the framework of the Guaranteed Volume of Free Medical Care (GVFMC), as well as for the treatment of orphan and socially significant diseases included in the List of Medicinal Products (approved by Resolution No. 1203 of the Government of the Republic of Kazakhstan dated December 31, 2025), is exempt from VAT.
The Code of the Republic of Kazakhstan “On Public Health and the Healthcare System” provides that the GVFMC represents a scope of medical care provided at the expense of budgetary funds. Financing of the GVFMC is carried out at the expense of the budget and may also be carried out at the expense of citizens through voluntary co-payment.
Thus, based on the definition established by the Health Code, the GVFMC covers medical care provided at the expense of budgetary funds, while co-payment constitutes payment by the purchaser, on a voluntary basis, of the difference between the cost of the medicinal product and the amount reimbursed within the GVFMC from the budget.
Accordingly, the voluntary co-payment made by the purchaser for the difference between the cost of the medicinal product and the reimbursed amount within the GVFMC is subject to VAT without application of exemptions.
3. Question: One of the conditions for applying the VAT exemption is the existence of a supply contract for medicinal products within the GVFMC and the Mandatory Social Health Insurance (MSHI), executed in accordance with Order No. 110 of the Minister of Health of the Republic of Kazakhstan dated June 7, 2023.
In practice, public procurement of medicinal products is carried out after the actual importation of goods. Therefore, the importer cannot apply the VAT exemption directly at the time of import of medicinal products subsequently supplied within the GVFMC and MSHI.
Answer: From January 1, 2026, the import of medicinal products within the GVFMC and MSHI, as well as for the treatment of orphan and socially significant diseases, is exempt from import VAT. The List of Medicinal Products (the List), as well as the procedure for applying the VAT exemption upon import of medicinal products (the Rules), were approved by Resolution No. 1203 of the Government of the Republic of Kazakhstan dated December 31, 2025.
One of the conditions for granting the VAT exemption under the Rules is the existence of a supply contract for medicinal products within the GVFMC and MSHI. Only a supply contract executed in accordance with Order No. 110 of the Minister of Health of the Republic of Kazakhstan dated June 7, 2023, confirms that the sale of medicinal products is carried out within the GVFMC and MSHI.
Therefore, in the absence of a supply contract for medicinal products within the GVFMC and MSHI at the time of importation, import VAT shall be paid at the rate of 5% if such medicinal products are included in the List of medicinal products, medical devices, components of medical devices, as well as technical assistive (compensatory) devices in accordance with the legislation of the Republic of Kazakhstan on social protection (the List subject to 5% VAT).
If the medicinal products are not included in the List subject to 5% VAT, import VAT shall be paid at the rate of 16%.
4. Question: Is it true that taxpayers providing medical services who are not registered as VAT payers are required to issue electronic invoices (ESF)?
Answer: From January 1, 2026, certain categories of non-VAT payers are required to issue electronic invoices (ESF).
In accordance with subparagraph 11) of paragraph 1 of Article 208 of the Tax Code, these categories include taxpayers providing medical services in respect of the sale of medicinal products, medical devices, components of medical devices, as well as technical assistive (compensatory) devices in accordance with the legislation of the Republic of Kazakhstan on social protection.
5. Question: Until 2026, the sale and import of raw materials and supplies intended for the production of medicinal products were exempt from VAT. Are the sale and import of raw materials and supplies for the production of medicinal products exempt from VAT as of January 1, 2026?
Answer: Under subparagraph 33) of Article 394, as well as subparagraphs 10) and 10-1) of paragraph 1 of Article 399 of the Tax Code in force until January 1, 2026, VAT exemptions were provided for the sale and import of raw materials and supplies intended for the production of medicinal products.
The Tax Code effective from January 1, 2026, does not provide analogous VAT exemptions for the sale and import of raw materials and supplies intended for the production of medicinal products.
Therefore, the Tax Code does not establish provisions granting VAT exemption for raw materials, supplies, or equipment used in the production of medicinal products.
Accordingly, the import and sale of raw materials and supplies used for the production of medicinal products are subject to VAT.
6. Question: The introduction of different VAT rates within the supply chain will result, for some VAT payers, in an increase in debit balances due to input VAT credited at 16% while sales are taxed at 5%. For other VAT payers, the VAT burden will increase if goods, works, and services are purchased at a 5% VAT rate and subsequently sold at 16%. How should input VAT be credited when different VAT rates apply to purchases and sales? Is separate accounting required?
Answer: From January 1, 2026, paragraphs 1 and 2 of Article 503 of the Tax Code provide for different VAT rates. In particular, a reduced VAT rate applies to taxable turnover from the sale and import of medicinal products (except those supplied within the framework of the Guaranteed Volume of Free Medical Care (GVFMC), Mandatory Social Health Insurance (MSHI), or for the treatment of orphan and socially significant diseases) and medical devices:
5% from January 1, 2026;
10% from January 1, 2027,
provided that such goods are included in the List of medicinal products, medical devices, components of medical devices, as well as technical assistive (compensatory) devices (approved by Resolution No. 1204 of the Government of the Republic of Kazakhstan dated December 31, 2025).
Paragraph 1 of Article 480 of the Tax Code establishes the conditions under which a VAT-registered purchaser may credit input VAT on goods, works, and services. In addition, paragraph 1 of Article 210 of the Tax Code provides for the obligation to maintain separate tax accounting when conducting taxable turnover subject to different VAT rates.
Thus:
If a medical device is purchased at a 16% VAT rate and used for turnover taxed at 5%, the input VAT on such medical device shall be credited in full (16%), subject to compliance with the input VAT credit method and other applicable conditions.
If a medical device is purchased at a 5% VAT rate and used for turnover taxed at 16%, the input VAT on such medical device shall be credited in full (5%), subject to compliance with the input VAT credit method and other applicable conditions.
If a medical device is purchased at a 5% VAT rate and used for exempt turnover, the input VAT on such purchased medical device is not creditable.
At the same time, taxpayers conducting taxable turnover subject to different VAT rates are required to maintain separate tax accounting.
7. Question: Polyclinics act as co-performers in the provision of medical services within the framework of the GVFMC and MSHI. Are turnovers from medical services provided by co-performers exempt from VAT?
Answer: From January 1, 2026, pursuant to subparagraph 28) of Article 474 of the Tax Code, turnover from the sale of medical services, including services provided as part of a комплекс of services, in accordance with the legislation of the Republic of Kazakhstan by a healthcare entity licensed for medical practice, within the framework of the GVFMC and MSHI or for the treatment of orphan and socially significant diseases, is exempt from VAT, provided that such medical services are included in the List.
In addition, the provisions of subparagraph 28) of Article 474 of the Tax Code also apply to a supplier of medical services acting as a co-performer, provided that the contract for the provision of medical services within the GVFMC or MSHI expressly stipulates that the relevant medical services are to be provided by the co-performer.
If such a condition is absent from the contract, there are no grounds for applying the VAT exemption within the GVFMC or MSHI to services rendered by the co-performer.