Dear Readers,
The Ministry of Finance approved1 a list of tax treaty countries where the nominal income tax rate exceeds 75 percent of the corporate income tax rate in Kazakhstan. This list is used for determining controlled foreign companies.
Amendments2 introduced to the Tax Code in 2020 established several exceptions for the purpose of defining a controlled foreign company (the CFC).
One of the exceptions is outlined in Paragraph 1 of Article 294 of the Tax Code, according to which a foreign entity is not regarded as the CFC if the entity is registered in a tax treaty country with the nominal income tax rate exceeding 75 percent of the corporate income tax rate in Kazakhstan.
To avoid any misinterpretations, the Ministry of Finance approves the list of such countries by 31 December of the year following the reporting period.
The approved list includes 43 out of 54 countries that have effective tax treaty with Kazakhstan.
The order came into effect on 19 June 2023.
1 Order No. 680 of the Deputy Prime Minister - Minister of Finance of Kazakhstan, On the Approval of the List of Countries with Effective International Agreements on Avoidance of Double Taxation and Prevention of Tax Evasion, Where the Nominal Corporate Income Tax Rate Exceeds 75 Percent of the Income Tax Rate in Kazakhstan, dated 19 June 2023
2 Law No. 382-VI of the Republic of Kazakhstan On Amendments and Addenda to the Code of the Republic of Kazakhstan On Taxes and Other Obligatory Payments to the State (the Tax Code) and Law of the Republic of Kazakhstan On the Introduction of the Code of the Republic of Kazakhstan On Taxes and Other Obligatory Payments to the State (the Tax Code), dated 10 December 2020