Tuesday May 21, 2024

A Detailed Tax Guide For Foreign Establishments In Kazakhstan

tax in Kazakhstan for foreigners

The aim of the revised tax system in Kazakhstan is to simplify the process of filing taxes and reduce the amount of paperwork required. Thus, it ensures to make the tax system more transparent. However, there are special rules and different rates and regulations for tax in Kazakhstan for foreigners to establish their businesses. 

The tax that foreign citizens and organizations are required to pay depends on the type of business. In addition, it also depends on the amount of time they spend in the country. If you spend more than 183 days per year in Kazakhstan, you are required to pay income taxes on your income in the country. On the contrary, those who are employed by a Kazakhstan company or organization must pay taxes on their salaries. However, a person with Kazakhstan’s permanent residency can avail of a number of benefits in paying the tax.

Some Important Points About Taxation System In Kazakhstan

  • The legal system of the Republic Of Kazakhstan is not limited to just the Constitution and laws. It also includes international agreements and obligations from the Constitutional Council and Supreme Court.
  • The State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan (the SRC) administers the taxation system. Their role is to collect taxes, monitor tax payments, and audit taxpayers. They also contribute to developing and implementing Kazakhstan’s tax policies, laws, and regulations.
  • Kazakh law gives foreign companies the same rights and responsibilities as local companies.
  • A foreign company may establish a wholly owned subsidiary or joint venture in Kazakhstan. It is also possible to set up a representative office or branch of an existing company. However, Subsidiaries and joint ventures of this type must be registered and comply with local laws and regulations.
  • The most common types of business entities in Kazakhstan are the LLP ( Limited Liability Partnership) and the JSC ( Joint Stock Company). Both of the business entities offer limited liability protection to their owners and shareholders.  JSC is a public limited company and an LLP is a private limited company. An LLP requires at least two members, while a JSC requires at least three members. 

Registration With Tax Authorities 

To conduct some legal operations in Kazakhstan, it is mandatory for business owners to register themselves with tax authorities. Registering with the Ministry of Taxes and Duties provides the owners a Business Identification number. This tax number is a unique identifier for the business and is used for filing taxes, opening a bank account, and other official purposes.

Types Of Tax For Foreign Establishments In Kazakhstan

Kazakhstan’s tax system includes Value Added Tax (VAT) and Corporate Income Tax (CIT) for foreign firms doing business there. In addition, other taxes include excise taxes, social security tax, property tax and import duties.

  • Corporate Income Tax in Kazakhstan is set at 20% for both domestic and foreign companies.
  • Taxes on Value Added (VAT) are charged at a standard rate of 12% to foreign companies operating in Kazakhstan.
  • Property taxes are calculated as 1.5% of the average annual value of immovable property owned, leased, or possessed.
  • The size, location, and purpose of the land determine the land tax for foreign establishments in Kazakhstan. A local authority usually sets the rate. It can change at any time.

Need Of A Bank Account In Kazakhstan:

To pay taxes and for other financial transactions in Kazakhstan, foreign establishments need to open a bank account in Kazakhstan.

How To Open A Bank Account In Kazakhstan? 

The documents required for opening a bank account include proof of identity (Passport), proof of residency, and proof of tax registration. Additionally, you may need to provide a copy of your company’s registration documents. Then, a representative from the bank will guide you through the entire procedure. Thus, you will be able to have a bank account in Kazakhstan.

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