Kazakhstan: Electronic sales by foreign entities via internet subject to VAT beginning in 2022

Kazakhstan: Electronic sales by foreign entities

Electronic sales of goods and services to individuals in Kazakhstan, when made by foreign entities via the internet, will be subject to value added tax (VAT) effective 1 January 2022.

1000

Related content

A new section that has been added to the tax law addresses the VAT treatment of sales made by foreign internet companies, and accordingly there are newly defined terms including electronic services, electronic sale of goods, and an internet platform.

  • Foreign entities that, via their internet platforms, make electronic sales of goods or services to individuals in Kazakhstan will be regarded as VAT payers.
  • A foreign internet company will be required to calculate and pay the amount of VAT on an electronic sale of goods or services made 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 or via an operator of electronic money transfer service 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.

The measures also introduce a registration process for foreign internet companies, requiring a foreign internet company to submit to the tax authorities a hardcopy of a confirmation letter with the following information:

  • Name of the company
  • Tax registration number (or its equivalent), if there is such number in the country of incorporation or the country of residence
  • State registration number (or its equivalent) in the country of incorporation or the country of residence
  • Bank account details from which the company will pay the Kazakh VAT
  • Postal details (official e-mail address, address of location in the country of incorporation or the country of residence)

Foreign internet companies will not be required to issue VAT invoices or submit VAT declarations in Kazakhstan.

For the calculation of VAT on an electronic sale of goods or services, a foreign currency value of the transaction must be converted into tenge at the market exchange rate on the last business day preceding the payment date.

The rules provide for quarterly VAT payments, to be remitted by the 25th day of the second month following the quarter in which a foreign entity sold goods or services electronically.


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

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

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal