Kazakhstan: Senate Passes Draft Tax Code, Returns Some Provisions for Revision

The Senate Committee on Finance and Budget has approved Kazakhstan's draft Tax Code in two readings, although certain provisions were returned to the Majilis in revised form, Orda.kz reports.

New Progressive Income Tax Scale

• Individuals earning over 8,500 MCI (approx. 33.4 million tenge annually) will have a 15% income tax.
  
• Dividends up to 230,000 MCI (approx. 904.4 million tenge) will be taxed at 5%, while earnings above that will incur an additional 15%.
  
• Individual entrepreneurs on the general regime will pay 10% on income up to 904.4 million tenge, and an additional 15% beyond that.

Luxury Tax Measures

A 10% excise tax will apply to:

• Cars valued above 75 million tenge.
  
• Aircraft and yachts over 100 million tenge.
  
• Property tax will be set at 2% per object for real estate with a combined value exceeding 450 million tenge.

Value-Added Tax (VAT) Adjustments

• The base VAT rate will rise from 12% to 16%.
  
• For medications and socially important goods, reduced rates will be introduced: 5% from 2026 and 10% from 2027.
  
• Services under the State Guaranteed Medical Care and Compulsory Health Insurance remain exempt.
  
• Tax invoice tracking will be automated, and refund processes will be simplified.

VAT Registration Threshold Lowered

The registration threshold will drop from 20,000 to 10,000 MCI to prevent tax evasion through artificial business splitting.

Special Tax Regimes (STR)

• Self-employed individuals will pay 4% on income up to 15 million tenge annually, without needing to register as individual entrepreneurs.
  
• Under the simplified declaration regime, income up to 600,000 MCI (approx. 2.36 billion tenge) will be taxed at 4% (adjustable between 2-6%).
  
• Farmers and agricultural households will shift from a unified land tax to an individual income tax model.

Reform of Tax Incentives

• Clear rules will govern the introduction, extension, and termination of tax benefits.
  
• Oversight responsibilities will be formally assigned to specific government agencies.

Asset Declarations

• General asset and liability declarations will not be mandatory for all citizens.
  
• Declarations will be required for the ownership or acquisition of high-value assets domestically or abroad exceeding 20,000 MCI (about 78.6 million tenge).

Support and Enforcement Improvements

• A new fiscal support system will accompany business registration, prioritizing taxpayer support and reducing bureaucracy.
  
• Shorter timeframes for tax audits and suspensions will be introduced.
• Installment plans will be available for tax debts up to 1,500 MCI (approx. 5.9 million tenge) without collateral.
• The Unified Land Tax will be abolished, and some fees and charges will be reduced.

Original Author: Ilya Astakhov