Switching from a generally established procedure to simplified declaration taxation mode for the LLP

An LLP can operate according to the generally established taxation procedure (GETP) in several cases:

• when registering the LLP (by default), if none of the special tax regimes was initially selected (clause 1 of article 679 of the Tax Code);
• when the right to use special regime is ceased (the net income declared or the number of personnel has been reached beyond the established limit numbers, opening a branch or starting an activity for which the use of special regimes is prohibited ).

The LLPs that do not fall under the terms for the use of special regimes listed in Article 683 of the Tax Code are obliged to apply a generally established procedure:

• those conducting activities, the types of which are indicated in clause 3 of clause 2 of article 683 of the Tax Code;
• those having branches in Kazakhstan or representative offices abroad;
• had declared the excess of the income limit for the tax period (a calendar year) established by subparagraph 2 of paragraph 2 of article 683 of the Tax Code;
• had exceeded the number of employees specified in subparagraph 1 of paragraph 2 of article 683 of the Tax Code.

The specificity of LLP that use a generally established procedure is the absence of restrictions on the amount of turnover, on the number of employees hired, the ability to open branches in any region and be engaged in any type of activity not prohibited by the law.

If all of the following criteria are met, an LLP that applies a STR based on SD will be able to apply a reduced corporate income tax (CIT) rate of 3%, submit a simplified declaration form 910.00 every six months.

In order to be eligible for the application of STR based on SD, the LLP must meet the following basic criteria specified in Article 683 of the Tax Code:

• the half a year income should not exceed 24,038 times the monthly calculation index (MCI) established by the law on the republican budget and effective as of January 1 of the corresponding financial year;
• the number of employees should not exceed 30 people;
• there should be no branches and representative offices;
• in the authorized capital of a LLP that applies a STR based on SD, there should not be more than 25% of the participation share of other legal entities;
• the founder (participant) of the LLP applying a STR based on SD is not being simultaneously a member of another LLP, which also applies a special tax regime.
• There are no activities carried out specified in the list from subparagraph 3 of paragraph 2 of article 683 of the Tax Code.

In particular, those taxpayers who do not carry out the following types of activities have the right to apply the STR based on SD : 

1. production of excisable goods;
2. storage and wholesale of excisable goods;
3. sale of certain types of petroleum products - gasoline, diesel fuel and fuel oil;
4. holding lotteries;
5. subsoil use ;
6. collection and reception of glassware;
7. collection (procurement), storage, processing and sale of scrap and waste of non-ferrous and ferrous metals;
8. consulting services;
9. activities in the field of accounting or auditing;
10. financial , insurance activities and intermediary activities of an insurance broker and an insurance agent;
11. activities in the field of law, justice and jurisdiction;
12. activities within the framework of financial leasing.

How to switch from GEP to STR based on SD

InstructionReference Information

• Tax code RK
• Order of Minister of finance RK dated 8 February 2018 № 146 «On some issues of tax and customs administration”

 The right to switch to a simplified declaration from generally established procedure for a limited liability partnership is established by sub-clause 2 of clause 2 of article 679 of the Tax Code.

At the same time, in order for an LLP being on a GEP, which previously had already applied a special tax regime, to be able to take advantage of applying STR based on SD, is required to have applied the GEP for at least 1 calendar year. Such a requirement is contained in clause 4 of article 679 of the Tax Code.

Thus, if such a limited liability partnership plans to switch to the STR based on the SD from 01.01.2025, it must apply the generally established regime throughout 2024 and, at the time of the change in the tax regime, meet the requirements of Article 683 of the Tax Code.

If the LLP has applied the GEP for an incomplete year of 2024, it is possible to start applying the STR based on SD in 2025 only after the full 12 months of using the GEP have expired.

For example, 7 months - in 2023 and 5 months in 2024, it will be possible to apply the STR based on SD from June 2025.

For the transition of a limited liability partnership to a STR based on SD, it is necessary to submit a notice of the applicable tax regime to the State Revenue Department (clause 6 of article 679 of the Tax Code).

You can submit a notification:

• on paper;
• in electronic form through the "Taxpayer Cabinet".

To send an email notification in the Taxpayer's Office web application, you must use an EDS or a one-time SMS password. The notification form is located under Tax Statement - Special Tax Regime - Notice of Applicable Tax Regime. 

In the notification, you must fill in:

• name and BIN LLP;
• location (address) of the LLP;
• the selected taxation regime (based on a simplified declaration);
• the reason for the change in the tax regime.

After filling in all the fields, you must click "Check the filling in" and "Send to the SRD". In this case, the system will automatically warn you about the change in the current tax regime as a result of sending a notification. Confirm your intention by clicking on the "Confirm" button.

The date of the beginning of the application of STR based on SD when submitting the notification will be the 1st day of the month following the month of filing the notification (sub-clause 3, clause 8, article 679 of the Tax Code).

Thus, if the notification is filed in December 2024, the simplified declaration can be applied from 01/01/2025.