ANNOUNCEMENT
On the procedure for paying individual income tax when withdrawing pension savings for the purpose of improving housing conditions and (or) paying for treatment
According to the Law on Pensions, a one-time pension payment is the amount of pension savings formed from mandatory pension contributions and (or) mandatory professional pension contributions, withdrawn by the contributor (recipient) from the UAPF in order to improve housing conditions and (or) pay for treatment.
Retirement savings –
money of a contributor (recipient of pension payments) accounted for on his individual pension account in the UAPF, including pension contributions, investment income, penalties and other receipts.
Pension contributions upon receipt to the individual pension account of the contributor are not subject to individual income tax (PIT). Retirement savings are taxable upon payment.
In order to determine the taxation procedure for the amounts of lump-sum pension payments, the Tax Code was supplemented with Article 351-1 “Peculiarities of calculating, withholding and paying individual income tax from a lump-sum pension payment in accordance with the legislation of the Republic of Kazakhstan on pension provision”.
According to the Tax Code, UAPF, as a tax agent, calculates the IIT when transferring a lump-sum pension payment calculated in accordance with the Pension Provision Law to the bank account of the recipient and (or) authorized operator. PIT is calculated by applying the rates established by Article 320 of the Tax Code (10%) to the lump sum pension payment.
The UAPF deducts and transfers the IIT amount to the state budget in accordance with paragraph 2 of Article 351-1 of the Tax Code in one of the following two ways, chosen by the contributor:
1) at a time, no later than the day the lump-sum pension payment is made in the manner prescribed by Article 351 of the Tax Code;
2) monthly in equal installments for no more than sixteen years upon retirement (according to the schedule for pension payments established by the UAPF).
The depositor's decision to choose the method of paying the IIT must be reflected in his application submitted to the authorized operator.
When a depositor submits an application for withholding the IIT at a time, the UAPF, when making a lump sum pension payment, will withhold the IIT immediately from the amount of the lump sum pension payment.
Example:
the amount of pension savings on the depositor's IP = 8,500,000 tenge
threshold of minimum sufficiency of pension savings = 3,500,000 tenge
amount available for a one-time pension payment = 8,500,000 - 3,500,000 = 5,000,000 tenge
accrued income in the form of a one-time pension payment = 5,000,000 tenge
IIT amount to be withheld and transferred to the budget = 5,000,000 * 10% = 500,000 tenge
the amount of income in the form of a lump-sum pension payment, minus the IIT withheld at the source of payment = 5,000,000 - 500,000 = 4,500,000 tenge.
When a depositor submits an application for withholding the IIT in equal monthly installments, the UAPF will calculate the amount of the IIT without withholding and transferring it to the state budget when making a lump-sum pension payment. Withholding and transfer of the calculated PIT will be carried out when an individual reaches retirement age in equal installments for no more than sixteen years according to the schedule for pension payments established by the UAPF.
Example:
the amount of pension savings on the depositor's IP = 8,500,000 tenge
threshold of minimum sufficiency of pension savings = 3,500,000 tenge
accrued income in the form of a one-time pension payment = 5,000,000 tenge
amount of calculated IIT = 5,000,000 * 10% = 500,000 tenge
the amount of income in the form of a one-time pension payment without withholding the IIT at the source of payment = 5,000,000 tenge.
If the depositor decides to choose the first method - to pay the IIT immediately in full, then he must indicate in the application the amount requested for withdrawal, minus the IIT in the amount of 10%. If the depositor decides to choose the second method - to use the deferred payment of the IIT, then he must indicate in the application the amount requested for withdrawal, without deducting the IIT.
Both amounts are already indicated in the statement provided by the UAPF to the depositor, for his convenience and independent choice. The amount specified by the depositor, requested for withdrawal, will come from the UAPF to his special account opened with an authorized operator.
UAPF was established on August 22, 2013 on the basis of JSC NPF GNPF. The founder and shareholder of UAPF is the Government of the Republic of Kazakhstan represented by the State Institution "Committee of State Property and Privatization" of the Ministry of Finance of the Republic of Kazakhstan. Trust management of UAPF pension assets is carried out by the National Bank of the Republic of Kazakhstan. Since January 1, 2016, the functions of developing proposals to improve the efficiency of pension assets management have been transferred to the National Fund Management Council. In accordance with the pension legislation, the UAPF attracts mandatory pension contributions, mandatory professional pension contributions, voluntary pension contributions, pension payments, individual accounting of pension savings and payments, provides the contributor (recipient) with information on the state of his pension savings (for more details, see www.enpf.kz )