About the main changes in tax legislation

CPN

Retrospectively, for the period of 2022, a deduction of CPN is introduced for the amount of damage, loss of goods incurred during the state of emergency by a large business entity (paragraph 1 of Article 243 of the Tax Code).

From 2023, the deduction of the CPN of the calculated amount of the CSHI deductions will be based on the accrual method, regardless of payment in the reporting period, similar to social deductions (paragraph 12 of Article 243 of the Tax Code).

In order to limit deductions for expenses for the purchase of intangible services provided by non-resident affiliates (parent, subsidiaries), such as consulting, auditing, design, legal, accounting, advocacy, advertising, marketing, franchising, financial (except for remuneration costs), engineering, agency services, royalties, transfer rights to use intellectual property objects, article 264 of the Tax Code has been supplemented with a new subparagraph 23), providing for a ban on deduction of expenses for the purchase of "intangible" services.

Paragraph 1 of Article 288 of the Tax Code has been supplemented with a new subparagraph 3-2), which provides for a reduction in the taxpayer's taxable income (NOD) for expenses for the purchase of "intangible" services from non-resident affiliates in the amount of 3 percent of the NOD. Also, in order to apply these restrictions, these amendments provide for a new concept of interrelated parties.

According to Article 307 of the Tax Code, in 2023 dividends to a participant – a legal entity resident of the Republic of Kazakhstan will not be subject to CPN at the source of payment. Exception: dividends on securities that were on the stock exchange (KASE, AIFC) at the date of accrual of dividends, but were not regularly traded on them (the criteria are set out in the Resolution of the Government of the Republic of Kazakhstan dated November 17, 2022 No. 911 "On determining the criteria for securities trading on the Stock Exchange"). If the volume of transactions on the stock exchange is not less than 25 million tenge, and the number of transactions is not less than 50 per month, then the payment of dividends on such securities (shares) will not be subject to CPN. Otherwise, there is a CPN of 15% at the source of payment from dividends.

According to Article 241 of the Tax Code, in 2023, the dividend income will be adjusted (reflected in the CIT declaration as income, and then adjusted/ excluded). Exception: dividends on securities that were on the stock exchange at the date of accrual of dividends, but were not regularly traded on them (criteria in Government Decree No. 911 dated November 17, 2022), in this case, dividend income is reflected in the declaration 100.00, is not adjusted, is subject to CPN 20% minus withheld at source payments of CPN 15% from dividends (based on the certificate of the person who paid the dividends and withheld CPN 15% at the source of payment). That is, the adjustment of dividend income for the majority of legal entities – residents of the Republic of Kazakhstan remains in 2023.

CPN of a non-resident

Sub-paragraphs 4) and 5) of paragraph 9 of Article 645 of the Tax Code, providing for the full exemption of non-residents' income in the form of dividends, are excluded.

Article 646 of the Tax Code is supplemented by paragraphs 4 and 5, if the conditions specified in these paragraphs are met, the CPN rate on dividends to a non-resident is reduced from 15% to 10% (the term of ownership is over 3 years, and other conditions).

Dividends and remuneration to non-residents on securities that are regularly traded on the stock exchanges of the Republic of Kazakhstan (KASE, AIFC) will not be subject to CPN at the source of payment, taking into account the criteria established by Government Decree No. 911 dated November 17, 2022.

Article 644 of the Tax Code is supplemented by subparagraph 5-1), according to which the amount of an advance (prepayment) received by a non-resident is recognized as income of a non-resident from sources in the Republic of Kazakhstan, if an international agreement on avoidance of double taxation has not been concluded with the non-resident state, and the term of the agreement (contract) is more than 2 years.

In Article 667 of the Tax Code, paragraph 1 is supplemented with the provisions that when paying income in the form of dividends, remuneration or royalties to a non-resident-an interconnected party, from a state with which the Republic of Kazakhstan has concluded an international agreement, which has been amended by a multilateral international convention, a tax agent has the right to apply the convention while fulfilling the following conditions:

- such income is subject to inclusion in the taxable income of a non-resident without tax benefits;

- the nominal income tax rate of a non-resident in his state is at least 15%.

Social tax

In subparagraph 3) of paragraph 3 of Article 484 of the Tax Code, the word "subparagraph 53" has been replaced with the word "subparagraph 50)", this is a corrected error on Astana Hub. The income of an employee – a citizen of the Republic of Kazakhstan at the Astana Hub participant will be subject to social tax, the income of foreign employees will not be subject to social tax.

VAT

Imports of raw cane sugar and raw materials for the production of pesticides are exempt from VAT (Article 399 of the Tax Code). VAT exemption is also introduced for sales of household appliances and (or) consumer electronics appliances, if such devices were included in the list. The import of works of art imported by non-state museums is exempt from VAT, with the approval of the list of such works.

Article 394 of the Tax Code provides for VAT exemption for the sale of refined gold by an refining plant to jewelry manufacturers.

Article 404 of the Tax Code introduced for 2022 the adjustment of VAT offset in cases arising as a result of emergency situations, the procedure for recognizing income and adjusting them when reimbursing from the budget.

Article 411 of the Tax Code provides for an additional 70% VAT offset for commercial fishing, and also extended the validity period of an additional 70% offset in the production of sugar, confectionery, yeast.

In article 388 of the Tax Code, a zero VAT rate may be applied when refueling aircraft of foreign airlines by ground handling service providers.

Paragraph 5 of Article 440 of the Tax Code has been changed, the period of stay in the territory of the Republic of Kazakhstan of temporarily imported goods from the EAEU is limited to 2 years, after the expiration of 2 years, the import of EAEU goods with the obligation to pay VAT at the rate of 12% is recognized.

Article 431 of the Tax Code reduces the period for the refund of excess VAT offset from 155 calendar days to 75 working days.

Payment for digital mining

The mining fee rates have been increased (see the table in Article 606-3 of the Tax Code).

When using your own electric energy for digital mining purposes, the fee is calculated at the rate of 10 tenge per 1 kilowatt-hour of consumed electric energy.

At the same time, the fee is calculated at the rate of 1 tenge per 1 kilowatt-hour of consumed electric energy in the case of using electric energy produced from renewable sources of electric energy at own power plants in the territory of the Republic of Kazakhstan.

In the absence of control devices for measuring the volume of electric energy consumption and (or) finding them in a faulty state for the purposes of digital mining, the fee is calculated at the rate of 25 tenge per 1 kilowatt-hour of consumed electric energy.

In the absence of control devices for measuring the volume of electrical energy consumption and (or) finding them in a faulty state for the purposes of digital mining, the amount of electrical energy consumed is calculated from the calculation of the round-the-clock consumption of the maximum power of electrical energy.

If there are several grounds for applying different fee rates at the same time, the highest fee rate is applied.

Amendments have been made to Article 606-4 of the Tax Code, providing that the declaration on payment for digital mining for tax obligations that will arise from January 1, 2023, will be submitted to the state revenue body at the taxpayer's location quarterly no later than the 15th of the second month following the reporting quarter, and payment of the fee for digital mining will be carried out no later than the 25th day of the second month following the reporting quarter;

Article 44-2 of the Law on the Entry into Force of the Tax Code Article 606-4 of the Tax Code is set out in the wording providing that the tax period for calculating payments on tax liabilities incurred in 2022 is a calendar year.

The declaration for 2022 is submitted to the state revenue body at the taxpayer's location no later than March 31 of the year following the reporting year, and the amount of the fee is paid by April 10, 2023.

Changes have been made on taxation issues for digital mining, which will be introduced from April 1, 2023:

– the procedure for determining the income of a person engaged in digital mining, digital mining pool, digital asset exchange has been established;

– it is determined that the fee for issuing licenses for digital mining activities issued from April 1, 2023 to December 31, 2023, will be paid in the amount provided for in paragraph 4 of Article 554 of the Tax Code until February 15 of the year following the year of obtaining the license. In this case, the fee rate is determined in the amount of a multiple of the monthly calculation index effective on the date of payment of the license fee.

Digital assets

Introduced from January 1, 2023:

– amendments to subparagraph 8) of paragraph 1 of Article 331 of the Tax Code, providing that property income arises from the sale of digital assets;

– a new subparagraph 12-1, Article 363 of the Tax Code, which provides for the assignment of the obligation to submit an individual income tax declaration to citizens of the Republic of Kazakhstan, Candas and persons with a residence permit in the Republic of Kazakhstan who own digital assets as of December 31 of the reporting tax period.

IPN

Starting from 2023, there will be a single IPN rate on dividends of 10% (Article 320 of the Tax Code). These changes are envisaged in order to equalize the IPN rate for all types of income (entrepreneurship, wages, property income, etc.).

Amendments and additions have been made to subparagraph 7) of paragraph 1 of Article 341 of the Tax Code on the application of income adjustments in the form of dividends received on securities that are on the date of accrual of such dividends in the official list of stock exchanges operating on the territory of the Republic of Kazakhstan, including the AIFC, provided that trading was carried out on the exchange in accordance with with the criteria defined by Government Decree No. 911 dated November 17, 2022 (the volume of transactions per month is not less than 25 million tenge, the number of transactions is not less than 50 per month).

Amendments and additions have been made to subparagraph 8) of paragraph 1 of Article 341 of the Tax Code: it is provided not to tax dividends received from a resident legal entity for a calendar year within 30,000 MCI (in 2023, 30,000 MCI will amount to 103 500,000 tenge (30,000 × 3,450 tenge)), over the specified amount of dividends are subject to IPN at the rate of 10%. This norm applies to business entities, regardless of the category of entrepreneurship (micro-, small-, medium-, large-).

According to the amendments made to paragraph 2 of Article 319 of the Tax Code, they are not considered as income of an individual:

from January 1, 2018:

- compensation payments to employees in cases when their work takes place on the road, has a traveling nature, is associated with official trips within the serviced areas, - within the limits of the norms established by collective, employment contracts and (or) an act of the employer. Previously, the amount of such compensation payments was limited to the amount of 0.35-fold MCI for each day of traveling work;

from January 1, 2019:

- the amount credited by the bank and (or) the National Mail Operator at the expense of the bank and (or) the National Mail Operator to the account of an individual for making non-cash payments;

from January 1, 2021:

- the cost of uniforms issued to an employee in cases where the legislation of the Republic of Kazakhstan establishes the obligation to wear uniforms and (or) provide them;

from January 1, 2022:

- income upon termination of obligations in accordance with the civil legislation of the Republic of Kazakhstan on a loan (loan, mortgage loan, housing mortgage loan, micro-loan);

from January 1, 2022 to January 1, 2023:

- income generated when writing off the debt on the lease of a dwelling purchased by a mortgage organization under the Refinancing Program of mortgage housing loans (mortgage loans) approved by the National Bank of the Republic of Kazakhstan;

from January 1 , 2023:

- the amount of remuneration received by the person who reported the facts of violation of the use of KKM and equipment (device) intended for accepting payments using payment cards.

From February 21, 2023, an individual resident of the Republic of Kazakhstan becomes a tax agent, upon payment to a non–resident (not registered with the tax authority as a taxpayer) of income from value gains from the sale of property located in the territory of the Republic of Kazakhstan, the rights to which or transactions on which are subject to state registration in accordance with the laws of the Republic of Kazakhstan (real estate, share participation). The procedure for determining the amount of income from value gains is specified in Article 650 of the Tax Code. A resident individual will be required to withhold CPN/IPN from the income of a non–resident, and pay tax to the budget.

Single payment

The Tax Code has been supplemented with a new section 24-1, which defines the procedure for applying a single payment.

Individual entrepreneurs and legal entities that are subjects of micro-entrepreneurship and small entrepreneurship, applying special tax regimes based on a simplified declaration for agricultural producers and peasant farms, paying income to an individual in the form of wages and choosing to fulfill obligations to calculate, withhold and transfer IPN from such income as part of a single payment, are recognized as tax agents of a single payment.

The single payment includes the amounts of personal income tax payable from income subject to taxation at the source of payment, OPV and OPVR, social contributions, contributions and deductions to the OSMS.

At the same time, for employees who are exempt from paying social payments (with the exception of social security payments), the single payment rate is reduced by the corresponding share of social payments (with the exception of social security payments).

The Single payment rate from January 1, 2023 is 20%.

Payment of a Single payment is made by the payer in cash or by non–cash method no later than the 25th day of the month following the reporting one, in the total amount through second-tier banks and organizations engaged in certain types of banking operations, to the bank account of the NAO "State Corporation "Government for Citizens" (hereinafter referred to as the State Corporation) indicating the month for which the Single payment.

When transferring a Single Payment, the payment order must specify the payment destination code (KNP) – 185.

ESF

The pilot project on desk control through the use of ESF is enshrined in the Tax Code (Article 96 of the Tax Code). The tax authorities for violations with a high degree of risk restrict the statement of the ESF in the ESF IS in case of non-fulfillment within the prescribed period or recognition as unfulfilled of the notification on the elimination of violations identified by the tax authorities based on the results of desk control (Article 120-1 of the Tax Code). At the same time, the taxpayer's appeal of the decision to restrict the discharge of the ESF does not suspend its effect.

Article 412 of the Tax Code is supplemented by paragraph 2-1: when limiting the statement of the ESF in the ESF IS in accordance with Article 120-1 of the Tax Code, the invoice is issued on paper. At the same time, an invoice issued on paper is subject to introduction into the ECF IS within 15 calendar days from the date of cancellation of the restriction on issuing invoices in electronic form in the ECF IS.

Article 412 of the Tax Code limited the period for applying for an ECF statement to 180 calendar days: in the cases provided for in subparagraphs 1) and 2) of Part one and part three of paragraph 13 of Article 412 of the Tax Code, the recipient of goods, works, services has the right to contact the data supplier within 180 calendar days from the date of the supplier's turnover on sale goods, works, services with the requirement to issue an invoice, and the supplier is obliged to fulfill such a requirement, including in terms of specifying the details of the legal entity in the information about the recipient of goods, works, services, through a proxy of which the purchase of goods, works, services is carried out, or an individual entrepreneur who purchases goods, works, services. The term of discharge of such an ESF after the application will not exceed 195 calendar days (paragraph 2 of Article 413 of the Tax Code).

Single aggregate payment

Paragraph 3 of Article 774 of the Tax Code is supplemented by sub-paragraphs 6) and 7), according to which, from January 1, 2023, they are not additionally recognized as payers of a single aggregate payment:

– persons engaged in the following activities:

consulting and/or marketing services;

accounting or auditing activities;

financial, insurance and intermediary activities of an insurance broker and insurance agent;

activities in the field of law, justice and justice;

digital mining and (or) digital asset turnover activities;

-- persons providing services on the basis of agency contracts (agreements).

At the same time, agency contracts (agreements) are understood to be contracts (agreements) of a civil nature concluded in accordance with the legislation of the Republic of Kazakhstan, under which one party (agent) undertakes for remuneration to perform certain actions on behalf of the other party on its own behalf, but at the expense of the other party or on behalf and at the expense of the other party.

Special tax regimes

From 2023, the SNR for small businesses cannot be applied by persons engaged in the following types of activities (subparagraph 3) of paragraph 2 of Article 683 of the Tax Code):

- marketing services;

- rent and operation of the trading market;

- subletting of retail facilities related to trade markets, stationary retail facilities of category 1, 2 and 3 in accordance with the legislation of the Republic of Kazakhstan on the regulation of trade activities, as well as retail outlets, retail facilities and catering facilities located on their territory;

- the activities of two or more taxpayers in the provision of hotel services on the territory of one hotel or a detached non-residential building in which such services are provided.

When carrying out these types of activities, business entities from 2023 should work under the generally established taxation regime.

SNR of retail tax

Chapter 77-1 "Special tax regime of retail tax" was in effect from January 1, 2021 to January 1, 2023 in accordance with the Law of the Republic of Kazakhstan dated 12/25/17 No. 121-VI.

According to the press service of the NCE RK "Atameken", the SNR of the retail tax will be restored in 2023.

Tax accounting documentation

Documents with an electronic digital signature are recognized as accounting documentation.

Relevant amendments have been made to Article 190 of the Tax Code: accounting documentation or primary accounting documents issued in the electronic invoice information system using an electronic digital signature are also recognized as accounting documentation.

Thus, the acts of work performed, services rendered, issued in the information system "ESF", are recognized as accounting documentation for tax accounting purposes.

At the same time, individual entrepreneurs who do not maintain accounting records also have the right to issue primary accounting documents in the ESF IS using an electronic digital signature.

The changes are introduced retrospectively from April 1, 2018.

Taxpayer's personal account

From January 1, 2023, in order to receive an extract from the taxpayer's personal account on the status of settlements with the budget for all or certain types of taxes, payments to the budget, social payments, fines, penalties, it is not required to submit a tax application.

An extract from the personal account will be issued by the tax authorities at the request of the taxpayer in electronic form using the website cabinet.salyk.kz , an e-government portal indicating the BIN/IIN, the period and the state revenue authority (OGD) within one working day from the date of receipt of the request.

Tax audits

From 2023, periodic tax audits will be conducted.

Tax audits conducted according to a special procedure based on a risk assessment have been replaced by periodic tax audits based on a risk assessment.

Periodic tax audits based on risk assessment are inspections appointed by the tax authorities in relation to taxpayers (tax agents) based on the results of the analysis of tax reports, information from authorized state bodies, as well as information obtained from official and open sources of information on the activities of taxpayers (tax agents).

The basis for the appointment of periodic tax audits will be a semi-annual schedule approved by the decision of the authorized body and posted by it on the Internet resource for six months until December 25 of the year preceding the year of inspections, and until May 25 of the current calendar year.

At the same time, changes to the semi-annual inspection schedules are not allowed.

Since January 1 , 2023 , changes have been put into effect:

- to paragraph 8 of Article 146 of the Tax Code, providing for the exclusion of the possibility of extension by the state revenue authorities of the timing of the survey for more than 30 working days;

- in paragraph 3 of Article 158 of the Tax Code, providing for the regulation of the procedure for handing over a tax audit report if a taxpayer refuses to receive it by drawing up a protocol (act) with the involvement of witnesses.

Information about taxpayers

On the Internet resource of the SRC of the Ministry of Finance of the Republic of Kazakhstan will be published:

- information on the number of employees reflected in the tax statements, since these data are excluded from the information related to the taxpayer's tax secrecy;

- register of recipients of foreign financing;

- information about taxpayers who are restricted from issuing electronic invoices in the electronic invoice information system.

Informing taxpayers

Paragraph 1 of Article 73 of the Tax Code is supplemented by subparagraph 9) (effective from January 1, 2023), which provides for the sending of information messages through service software products, including to the head and (or) responsible employee for calculations with the budget. This innovation does not apply to large business entities.

 

Estimated indicators for work in 2023

 

The Law of the Republic of Kazakhstan "On the Republican Budget for 2023-2025" dated December 1, 2022 No. 163-VII is established from January 1, 2023:

- monthly calculation index - 3,450 tenge;

- minimum wage - 70,000 tenge;

- the minimum amount of the state basic pension payment is 24,341 tenge;

- the minimum pension amount is 53,076 tenge;

- the amount of the subsistence minimum for calculating the amount of basic social benefits - 40,567 tenge.