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Kazakhstan - Other taxes and levies

Kazakhstan - Other taxes and levies

Taxation of international executives

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Social tax

Are there social security/social insurance taxes1 in Kazakhstan? If so, what are the rates for employers and employees?

Employer and employee

Employers in Kazakhstan, including Kazakh companies and representative offices and branches of foreign legal entities, are required to pay social tax for their employees. The social tax is borne entirely by the employer and is not withheld from employees’ salaries.

Social tax is levied on all income, irrespective of whether it is received in cash or in-kind. In addition, representative offices and branch offices of foreign legal entities must pay social tax for their head office’s employees who receive any remuneration for work in Kazakhstan.

There is no maximum threshold for the social tax base. Obligatory contributions to pension funds in Kazakhstan and a few other minor allowances, such as compensation for unused vacation, are exempt from social tax. These allowances include the following:

  • payments received from an employer or insurance company as compensation for occupational injuries
  • reimbursements of medical expenses (with the exception of cosmetic surgery expenses), within the overall deduction limit of KZT249,194 in 2020
  • reimbursements of business trip expenses
  • payments received from an employer for relocation
  • the value of training, professional development and retraining related to the employer's business activity
  • the value of accommodation provided to rotational employees
  • meals provided to rotational employees, up to KZT15,906 per day starting from January 2019
  • payment received from an employer upon the termination of an employment contract in the event of liquidation of a company or reduction in staff numbers, up to the amount of the average monthly salary of the terminated employee
  • payment received for unused vacation
  • employer-paid premiums for occupational injury insurance.

Social tax applies to all employees, including foreign personnel, at a flat rate of 9.5 percent.

Social tax payments are due by the 25th day of the month following the month of income payment. An income tax and social tax report is due quarterly by the 15th day of the second month following the calendar quarter.

Social insurance contributions

Employers in Kazakhstan must make contributions to the State Social Insurance Fund. Contributions are required for local employees as well as for expatriate personnel with a Kazakhstan permanent residence permit. A foreign individual without a permanent residence permit is not subject to this contribution requirement.

Employers must make contributions individually for each employee. Contributions are based on an employee’s monthly gross salary, up to a maximum monthly income KZT297,500 in 2020. For 2020, contributions are computed at the rate of 3.5 percent of applicable gross salary.

Social insurance contributions are fully creditable against an employer’s social tax liabilities and therefore do not represent an additional tax burden on the employer.

Obligatory social medical contributions

Employers must make monthly employer obligatory social medical insurance (hereinafter, “OSMI”) contributions to the Social Medical Insurance Fund at their own expense calculated based on 2 percent rate (as of 1 January 2020).

The calculation base of the Employers’ OSMI contributions includes gross salaries and other benefits that individuals earn under a labor contract or service agreement excluding type of income that is not subject to OSMI contributions. Contributions are based on an employee’s monthly gross salary, up to a maximum monthly income KZT425,000 in 2020.

All employers, including branches and representative offices should pay OSMI contributions for all their employees. Employers' contribution will be made from the employers’ funds (not from the employee’s).

In addition, from 1 January 2020 there are OSMI payments which should be remitted to the budget by tax agent at a 1 percent rate. OSMI payments are based on an employee’s monthly gross salary, up to a maximum monthly income KZT425,000 in 2020 and it is obligation of employee (i.e. tax agent obliged to withhold OSMI payments from employee’s gross income on a monthly basis). 

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Kazakhstan?

None.

Real estate tax

Are there real estate taxes in Kazakhstan?

Individuals owning residential properties, garages, and other buildings and constructions in Kazakhstan are subject to property tax. The tax is assessed on the value of real estate as appraised by the authorized governmental body as of 1 January each year.

The following table indicates property tax rates applicable to individuals in 2020.

Property value (KZT)

Tax (KZT)

Up to 2,000,000

0.05%

From 2,000,001 to 4,000,000

1,000 + 0.08% of property value exceeding 2,000,000

From 4,000,001 to 6,000,000

2,600 + 0.10% of property value exceeding 4,000,000

From 6,000,001 to 8,000,000

4,600 + 0.15% of property value exceeding 6,000,000

From 8,000,001 to 10,000,000

7,600 + 0.20% of property value exceeding 8,000,000

From 10,000,001 to 12,000,000

11,600 + 0.25% of property value exceeding 10,000,000

From 12,000,001 to 14,000,000

16,600 + 0.30% of property value exceeding 12,000,000

From 14,000,001 to 16,000,000

22,600 + 0.35% of property value exceeding 14,000,000

From 16,000,001 to 18,000,000

29,600 + 0.40% of property value exceeding 16,000,000

From 18,000,001 to 20,000,000

37,600 + 0.45% of property value exceeding 18,000,000

From 20,000,001 to 75,000,000

46,600 + 0.50% of property value exceeding 20,000,000

From 75,000,000 to 100,000,000

321,600 + 0.60% of property value

exceeding 75,000,000

From 100,000,000 to 150,000,000

471,600 + 0,65% of property value

exceeding 100,000,000

From 150,000,000 to 350,000,000

796,600 + 0,70% of property value

exceeding 150,000,000

From 350,000,000 to 450,000,000

2,196,600 + 0,75% of property value

exceeding 350,000,000

Over 450,000,000

2,496,600 + 2% of property value exceeding 450,000,000

Sales/VAT tax

Are there sales and/or value-added taxes in Kazakhstan?
 

An individual who is registered as an individual entrepreneur and has taxable revenues in excess of KZT79,530,000 in any period of 12 consecutive months should register as a VAT payer and pay VAT. VAT registration is optional for all other persons.

The standard VAT rate in 2020 is 12 percent and applies to revenues derived from the sale of goods or services within Kazakhstan and to the import of goods into Kazakhstan. Tax law provides special rules for determining when and where various types of transactions are deemed to occur.

Certain activities are exempt from VAT. The list of exempt activities includes, among others, the lease or sale of residential buildings (except for buildings or portions thereof used for hotel services) and the lease or sale of land and land use rights (except for land used for parking passenger vehicles).

Registered VAT payers must charge VAT on their taxable output and may claim a credit for input VAT they pay to suppliers who are registered VAT payers in Kazakhstan.

Kazakhstan VAT payers are required to charge VAT to themselves on taxable transactions they conduct in Kazakhstan with non-residents that are not VAT payers in Kazakhstan.

Taxpayers may claim a credit for this self-charged VAT.

The VAT base for imported goods includes the declared customs value of the goods and any excise duties, customs duties, and customs clearance fees payable upon customs clearance of the goods. Importers must pay import VAT before goods are cleared through customs.

VAT exemptions at the time of import are available for certain types of equipment, pharmaceuticals, raw materials and spare parts.

VAT declarations and payments are due quarterly. The amount due to the state is the difference between the total amount of output VAT that a taxpayer charges during the tax period and the total amount of input and/or import VAT that the taxpayer pays during the tax period.

Certain activities are subject to VAT at a rate of 0 percent. The list of such activities includes, among others, exports of goods from Kazakhstan, sales of refined precious metals to the National Bank of Kazakhstan, international transportation services, sales of goods on the territory of special economic zones, sales of certain self-produced goods to petroleum or mining business whose subsoil use contract grants them exemption from import VAT, and sales of certain self-produced goods to companies that entered into infrastructure investment contracts with the government of Kazakhstan, if the sales take place during the construction of new facilities

Unemployment tax

Are there unemployment taxes in Kazakhstan?

None.

Other taxes

Are there additional taxes in Kazakhstan that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, etc.

Local taxes

Various local taxes, including land tax and vehicle tax, may apply to individuals.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/jurisdiction’s fiscal or banking authorities?

The expatriates and local citizens that are recognized as Kazakh tax residents are required to file a PIT declaration annually, pay the related tax on income they earn outside of Kazakhstan (if any), and report bank accounts, property (immovable property, security papers and partnership share in foreign legal entity) they have outside of Kazakhstan, if any. This requirement does not relates to the employer’s responsibility.

Therefore, information about the individuals’ securities should be reported in the individual’s tax return and submitted to the Kazakhstan tax authority. This information relates only to informative character and do not lead to additional tax burden. The Kazakhstan tax return filing due date is 31 March of the year following the reporting period.

If the individual receives the dividend income from the securities and/or gain from the securities sale, this income will be subject to personal income tax in Kazakhstan (at 5 percent on the dividend income from Kazakhstan sources and 10 percent on the dividend income from abroad and on the gain from the securities’ sale). The individual (who is regarded as a tax resident in Kazakhstan for the reporting period) should specify this income in their annual tax return.

Foot Note

7According to Law № 105-V of the Republic of Kazakhstan on Pension Security in the Republic of Kazakhstan, dated 23 June 2013 (hereinafter, the “Pension Law”) and the Tax Code.

Disclaimer

All information contained in this publication is summarized by KPMG Tax and Advisory LLC, a company incorporated under the Laws of the Republic of Kazakhstan, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the Code of the Republic of Kazakhstan «On taxes and other obligatory payments to the budget (Tax Code)» dated 25 December 2017 № 120-VI, has been amended by the 2019); Labor Code of Kazakhstan dated 23 November 2015 № 414-V (with amendments as of 1 January 2019); The Law of the Republic of Kazakhstan «On Pensions in the Republic of Kazakhstan» dated 21 June 2013 No. 105-V; The Law of the Republic of Kazakhstan «On obligatory social insurance» dated 25 April 2003 No. 405-II (with amendments as of January 8, 2019), the Rules for Documentation of Invitations, Approval of Invitations for Entrance of the Foreign Nationals and Individuals Without Citizenship to the Republic of Kazakhstan, and Issuance, Cancellation, Recovery of Visas of the Republic of Kazakhstan, as well as Extension and Reduction of Their Validity Term approved by the Joint Order of the Acting Minister of Foreign Affairs of the Republic of Kazakhstan No.11-1-2/555 dated 24 November 2016 and the Minister of Internal Affairs of the Republic of Kazakhstan No.1100 dated 28 November 2016 (with amendments and additions as of 31 January 2019); the Rules for the Entrance and Stay of Immigrants in the Republic of Kazakhstan, as well as Their Departure from the Republic of Kazakhstan approved by the Order No. 148 of the Government of the Republic of Kazakhstan dated 21 January 2012 (with amendments and additions as of 29 December 2018); the Web site (Visa and Migration Portal of the Republic of Kazakhstan); the Code on Administrative Offences of the Republic of Kazakhstan adopted by Law No. 156-II of the Republic of Kazakhstan dated 30 January 2001 (with amendments and additions as of 1 July 2019); Labor Code of the Republic of Kazakhstan No. 414-V dated 23 November 2015 (with amendments and additions as of 1 January 2019).

© 2021 KPMG Tax and Advisory LLC, company incorporated under the Laws of the Republic of Kazakhstan, subsidiary of KPMG Europe LL P, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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