Kazakhstan adopt new Tax Code
ASTANA. Dec 25 (Interfax) – President of Kazakhstan Nursultan Nazarbayev has signed the Code on Taxes and Other Mandatory Payments to the Budget (the Tax Code), the president’s press service said in a statement.
The new Code is devised with the aim of achieving the objectives of removing inefficient tax benefits, improving tax schemes, bringing the fiscal policy into conformity to new economic demands, stimulating business to get out of the shadow market, expanding the taxation in the commodity sector, and improving VAT administration.
Incentives will be provided to various economic sectors, administration will be simplified and will motivate taxes payments, Minister of National Economy Timur Suleimenov said earlier when presenting the bill to the Majilis, the lower chamber of the Kazakh parliament.
With a maximum income of 300 million tenge per year, and 50 employees, 30% of revenue can be deducted for tax payments without confirmation, and at the same time, taxpayers are given the right to choose options, according to Suleimenov.
Existing special tax regimes remain. The patent rate is reduced from 2% to 1%. This is in order to reduce the tax burden in connection with the introduction of compulsory social health insurance. The period of limitation for small and medium-sized businesses is reduced from 5 to 3 years. The threshold for VAT is kept at 30,000 monthly calculated rates.
On mineral exploration and subsoil use – there has been a proposal to abolish the super-profit tax for the mining industry with full transfer of the tax burden to the rental tax on coal exports, while the commercial discovery bonus has been canceled in order to encourage successful exploration and a simpler alternative to subsoil use tax has been proposed for marine and deep oil deposits. In order to accelerate the exploration of minerals a mechanism for rent payments is offered.
The new Tax Code envisages measures to optimize VAT refund procedures. In particular, the refund term is reduced to 30 working days for taxpayers using electronic invoices.
The Code includes main conditions for forced liquidation of idle entities. In order to ensure transparency of this procedure, information is to be posted in advance in the media, and work on claims of potential creditors of these companies is to be carried out.
Kazakhstan’s new Tax Code will enter into effect beginning on January 1, 2018. The provisions for individual income tax will be altered from January 1, 2020 in connection with the introduction of universal declarations for citizens. The norms regarding the issuance of invoices and excise rates will come into force on January 1, 2019, while the norms on taxation of dividends and value increments, as well as the Free Economic Zones will enter into force from January 1, 2020.
The current exchange rate is 332.68 tenge/$1.