AIFC-Based Firm Legally Skips 200 Billion Tenge in Taxes — But Which One?

Deputy Prime Minister and Minister of National Economy Serik Zhumangarin recently stated that a company registered in the Astana International Financial Centre (AIFC) underpaid the state budget by over 200 billion tenge in corporate income tax and VAT.

According to Zhumangarin, the company acted within the law by taking advantage of a legislative gap.

First of all, the question is not about the AIFC. The AIFC itself is a super-platform. It is the heritage of Kazakhstan. I believe that it is the best financial center in Central Asia today. And it is not about the company as such. The company did not violate anything. That is why I will not tell you its name. Because these are reputational costs. The legislation allowed this to happen. And we talked about this, that we need to stop such loopholes,
 Zhumangarin said on June 25 while speaking to journalists in the Majilis.

The AIFC operates under a special legal regime based on English law and was designed to attract investment through tax incentives, simplified currency regulations, and independent courts.

One potential candidate is Kazakhmys Holding Limited. Until June 2024, it was registered in Luxembourg before relocating to the AIFC and opening an office in Astana.

Financial expert Rasul Rysmambetov said the assumption is plausible.

Maybe it’s Kazakhmys — why not? For Kazakhstan-based companies to enter international stock markets, borrow money, place shares, and so on — that was the idea when the AIFC was created. As far as I understand, the AIFC is now used for tax optimization. Unfortunately, I don’t know exactly how the company optimized taxes... But at the moment, tax optimization is not criminal tax evasion,
 Rysmambetov explained.

Kazakhmys Holding Limited appears to function as the group's management company. It is co-owned by Eduard Ogai and Vladimir Kim, both regularly listed among Kazakhstan’s wealthiest individuals.

Since 2021, it has paid around 5.6 million tenge in taxes, while the broader Kazakhmys Holding has contributed 23.6 billion tenge over the last decade.

However, its declared capital — $60,000 — stands out.

Another possible contender is KAZ Minerals Holding Limited, which was criticized by Majilis deputy Yerlan Sairov earlier this year.

There is another problem. The Astana International Financial Center, which has become an offshore paradise for domestic oligarchs... If you look at the list of participants in the center, you can find branches of the People’s Bank, CentrCredit, Jusan, Freedom, Kazpost, Kaz Minerals, KazPhosphat,
 Sairov said in April.

KAZ Minerals Holding Limited was registered in the AIFC on June 24, 2024, after also moving from Luxembourg. Its authorized capital is significantly larger — around $3.68 billion.

The company is part of an international structure that includes entities in Dubai and London.

In 2023, the KAZ Minerals group paid over $1 billion in taxes in Kazakhstan, including $425 million in corporate tax and VAT.

Still, there is no confirmation that it is the company.

Responding to an inquiry, the AIFC clarified that companies registered within the center are considered tax residents of Kazakhstan and must comply with national tax laws.

The only exceptions are certain tax preferences, which are established by Article 6 of the Constitutional Law of the Republic of Kazakhstan on the AIFC. Benefits for CIT and VAT are provided only for income received from the provision of licensed financial services on the territory of the AIFC. That is, only regulated companies that have the appropriate license from the AIFC Committee can use tax benefits for CIT and VAT. There are less than 300 such companies,
 the AIFC stated.

The editorial team has yet to receive responses from the State Revenue Committee or the Ministry of Economy.

Further updates will be published as new information becomes available.

Original Author: Ilya Astakhov