The State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan directs the procedure for taxation of income of a non-resident legal entity from sources in the Republic of Kazakhstan from activities in the Republic of Kazakhstan through a permanent establishment, for use and application in work.
In accordance with paragraph 2 of paragraph 2 of Article 666 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (Tax Code), if a non-resident has established a permanent establishment in the Republic of Kazakhstan, a tax agent is not entitled to apply the provisions of an international agreement regarding the release of income of non-residents in the Republic of Kazakhstan.
In this connection, if the activity of a non-resident leads to the formation of a permanent establishment in the Republic of Kazakhstan, or such a non-resident has a registered permanent establishment in the Republic of Kazakhstan, then the provisions of the international treaty on the avoidance of double taxation in terms of exemption from taxation are not subject to application.
Regarding the taxation of income from sources in the Republic of Kazakhstan of a non-resident legal entity in some cases
Paragraph 1 of Article 653 of the Tax Code defines that a tax agent who pays income from the performance of works, rendering services on the territory of the Republic of Kazakhstan, as well as income specified in subparagraph 4) of part one of paragraph 2 and paragraph 3 of Article 651 of the Tax Code, calculates, withholds and transfers corporate income tax from these incomes without making deductions at the rate of 20 percent if the following conditions are simultaneously met:
1) the absence of a contract concluded with a structural subdivision of a non-resident legal entity, a permanent establishment of a non-resident legal entity without opening a branch, representative office;
2) the absence of an invoice for goods sold, works, services issued by a branch, representative office of a non-resident legal entity, permanent establishment of a non-resident legal entity without opening a branch, representative office.
At the same time, it follows from subparagraph 4) of the first part of paragraph 2 and paragraph 3 of Article 651 of the Tax Code that the total annual income of a permanent establishment of a non-resident legal entity is the income of a non-resident legal entity, including the income of its structural units in other states received from the implementation of activities in the Republic of Kazakhstan, identical or homogeneous to that carried out by through the permanent establishment of this non-resident legal entity in the Republic of Kazakhstan, related to the activities of such a permanent institution, received (to be received) from the date of commencement of activities in the Republic of Kazakhstan.
Therefore, if a non-resident carries out business activities both in the Republic of Kazakhstan and abroad within the framework of one project or related projects carried out jointly with his permanent establishment in the Republic of Kazakhstan, the income of such a permanent establishment will be considered the income that it could receive if it were a separate and separate legal entity. a person engaged in the same or identical activity under the same or similar conditions, and acted independently of the legal entity- a non-resident whose permanent establishment it is.
Thus, while fulfilling the conditions set out in paragraph 1 of Article 653 of the Tax Code, the tax agent is obliged to calculate, withhold and transfer to the budget corporate income tax on the specified income of a non-resident without deductions at the rate of 20 percent.
At the same time, if only one of the conditions specified in paragraph 1 of Article 653 of the Tax Code is fulfilled, the tax agent is not entitled to tax the income of a non-resident at the source of payment. That is, for example, a contract was concluded with a structural subdivision of a non-resident legal entity, a permanent establishment of a non-resident legal entity without opening a branch, representative office or specified persons, invoices were issued for goods, works, services sold. At the same time, taxation of such income is carried out in accordance with Article 651 of the Tax Code.
Regarding the taxation of income from sources in the Republic of Kazakhstan of a non-resident legal entity whose activities led to the formation of a permanent establishment in the Republic of Kazakhstan
It follows from paragraph 2 of Article 653 of the Tax Code that the income of a non-resident legal entity received from activities in the Republic of Kazakhstan through a permanent establishment not registered with the tax authorities as a taxpayer in violation of the requirements of Article 76 of the Tax Code is subject to corporate income tax at the source of payment without deductions at the rate of 20 percent.
Accordingly, if the activity of a non-resident has led to the formation of a permanent establishment in the Republic of Kazakhstan, but such a non-resident, in violation of the requirements of Article 76 of the Tax Code, has not registered with the tax authorities as a taxpayer, then the tax agent is obliged to calculate, withhold and transfer to the budget corporate income tax on the income of such a non-resident without deductions at the rate of 20 percent.