Tax Figures
Corporate Income Tax
20% on taxable profits
Income Tax Rate
IIT deduction from payment source is made for: employee’s income; income of an individual from a tax agent; pension payment from saving pension funds; dividend, fees, winnings; scholarships; income under saving insurance contracts.
Assessment and payment of tax from self-declared income (property and other income, individual entrepreneur’s income) is performed by a taxpayer on its own.
Tax deductions (reduced tax base): standard tax deductions: minimum salary; property-related tax deductions: repayment of loan benefits received in the housing construction savings banks to carry out activities to improve living conditions; social tax deductions: sums of obligatory pension taxes, medical service costs, insurance premium costs.
Sales Tax
VAT: 12%
Withholding Tax
- Dividends, capital gains, interest, royalties 15%;
- Any income of an entity registered in a tax haven jurisdiction 20%;
- Insurance premiums under risk insurance agreements 15%;
- Income from international transportation services; insurance premiums under risk reinsurance agreements 5%.
Other Tax
- Social Tax: 11%, calculated on gross salaries less obligatory pension contributions;
- Property Tax: 1.5%, calculated on property annual average net book value;
- National Chamber of Entrepreneurs contribution: 160*MCI (1 MCI = KZT 1,852 for 2014);
- Land tax: KZT 28.95 per square meter (of land area);
- Pension contributions: 10%.
Income Tax (Personal Allowance)
IIT deduction from payment source is made for: employee’s income; income of an individual from a tax agent; pension payment from saving pension funds; dividend, fees, winnings; scholarships; income under saving insurance contracts.
Tax deductions (reduced tax base):
- Standard tax deductions: minimum salary;
- Property-related tax deductions: repayment of loan benefits received in the housing construction savings banks to carry out activities to improve living conditions;
- Social tax deductions: sums of obligatory pension taxes, medical service costs, insurance premium costs.
Time to prepare and Pay Taxes
178 Hours
Payroll
In 2015 Kazakhstan made paying taxes more complicated for companies by introducing a mandatory contribution to the National Chamber of Entrepreneurs and by increasing the vehicle and environmental taxes.
Remote Payroll
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Kazakhstan. Under Kazakhstan Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
Local Payroll Administration
In some cases, a company will register their business in Kazakhstan under one of the forms available: Limited liability partnerships (LLP), joint stock companies (JSC), and branches of foreign legal entities; but prefer to have another company administering its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Kazakhstan may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Kazakhstan payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Kazakh employment laws.
Setting up payroll in Kazakhstan
Currency
KZT (Approx. 0.0028 USD)
Tax Registration Requirements
Fulfilment of the tax liability shall be performed by the taxpayer independently, unless it is established otherwise by the Tax Code.
In fulfilment of the tax liability the taxpayer shall perform the following acts:
- Register with the tax authority;
- Keep records of taxable items and (or) items related to taxation;
- Calculate, proceeding from taxable items and items related to taxation, the tax base and tax rates, amounts of taxes and other obligatory payments, which are payable to the budget, as well as advance and current payments thereof;
- Make and present, except for tax registers, tax forms to the tax authorities in accordance with the established procedure;
- Pay calculated and assessed amounts of taxes and other obligatory payments to the budget, advance and current payments in respect of taxes and other obligatory payments to the budget in accordance with special part of this Code.
In payment of taxes, other obligatory payments to the budget, social assessments, transfer of obligatory pension contributions, obligatory professional pension contributions by a taxpayer’s authorised representative in cases established by this Code, the remitter of money shall specify in the payment documents the surname, name, patronymic (if any) or the official name of the taxpayer and its identification number.
Documentation Required for New Employees
For conclusion of an employment contract, the following documents are required:
- Identity document or passport (birth certificate for persons under the age of sixteen years);
- Residence permit or stateless person’s certificate (for foreigners and stateless persons permanently resident on the territory of the Republic of Kazakhstan);
- Document certifying education, qualifications, possession of special knowledge or occupational training on conclusion of an employment contract for work requiring corresponding knowledge, abilities and skills;
- Document confirming labour activities (for persons with a service record);
- Military registration document (for people liable for military services and subject to conscription for military service);
- Document on preliminary medical fitness certification (for persons required to undergo medical fitness certification in accordance with the Labor Code and the legislation of the Republic of Kazakhstan);
- Copies of allocation of a taxpayer registration number and individual social code.
Payment Mode
On payment of wages, the employer shall notify each employee, every month, in writing of the component parts of the wage due him for the corresponding period, the amount of and grounds for withholdings made, including information about mandatory pension contributions withheld and remitted, as well as about the aggregate monetary sum due for payment.
Wage payments to employees shall be made at the place where they work, unless the terms and conditions of the employment contract or the collective bargaining agreement envisage otherwise.
Frequency of Salary Payment
Wages shall be paid in monetary form in the national currency of the Republic of Kazakhstan at least once a month, no later than the 10th day of the following month. The date for payment of wages shall be envisaged by employment contracts and collective bargaining agreements.
Minimum Wage
The minimum monthly wage established annually by the law of the Republic of Kazakhstan on the republican budget for the corresponding financial year shall not be less than the subsistence level and shall not include additions and mark-ups, compensatory and social allowances, bonuses or other incentive payments and shall be paid in proportion to the time worked.
The minimum standard labour compensation shall be determined on the basis of the minimum monthly wage established by the law of the Republic of Kazakhstan on the republican budget for the corresponding year, and branch multipliers determined by branch agreements and approved by the Government of the Republic of Kazakhstan.
The minimum hourly wage of an employee fulfilling his job duties (work time standards), may not be less than the minimum monthly wage divided by the average number of working hours in the month according to the working time balance for the corresponding calendar year.
The minimum monthly wage or monthly base rate of a first rank employee envisaged by the terms and conditions of the employment contract, collective bargaining agreement and (or) acts of the employer, may not be less than the minimum monthly wage established by the law of the Republic of Kazakhstan on the republican budget for the corresponding financial year, while for employees engaged in heavy work or work under harmful (particularly harmful) or hazardous working conditions, it shall not be less than the minimum standard labour compensation.
