Kazakhstan: Legislation on taxation of digital sales

Kazakhstan: Legislation on taxation of digital sales

The lower house (Mazhilis) of the parliament in a first reading approved a bill concerning the taxation of digital services and the electronic sales of goods.

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The legislation includes measures defining certain terms—such as:

  • “Electronic services” are services provided to individuals through the information and telecommunications net­work, including via the internet.
  • An “electronic sale of goods” is a sale of goods to individ­uals via an internet platform.
  • An “internet platform” is an information system in the internet for electronic sale of goods.

Under the legislation, foreign companies that apply their internet platforms for electronic sales of goods or services to individuals in Kazakhstan are regarded as payers of value added tax (VAT). A foreign internet company would be required to calculate and pay VAT on an electronic sale of goods or services to an individual, if one of the following conditions is met:

  • The individual buyer's place of residence is Kazakhstan.
  • The buyer pays the foreign internet company through a bank account in a bank or via an operator of electronic money located in Kazakhstan.
  • The individual buyer's network address is registered in Kazakhstan.
  • The buyer uses for the transaction a telephone number (including mobile) with an international country code assigned to Kazakhstan.

For the calculation of VAT on an electronic sale of goods or services, the value of the transaction if listed in a foreign currency would need to be converted into the tenge (the currency of Kazakhstan) at a market exchange rate determined as of the last business day preceding the date of payment. For electronic sales from abroad, the quarterly VAT payments would be required by the 25th day of the second month following the quarter in which a foreign entity sold goods or services electronically.


KPMG observation

According to the legislation, foreign internet companies would not be required to register in Kazakhstan for VAT purposes or required to issue VAT invoices. However, the legislation does not address how foreign Internet companies are to remit and report VAT to the tax authorities without VAT registration. Possibly the legislation could be amended by the second reading in the Mazhilis.

The second reading in the Mazhilis is expected to be in September 2020, and if passed, the legislation would be subject to consideration by the upper house of the parliament for further review.


For more information, contact the head of KPMG’s Global Indirect Tax Services:

Lachlan Wolfers | +852 2685 7791| lachlan.wolfers@kpmg.com

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