Upcoming amendments in the Tax Law: Alterations for Kazakhstani residents in 2025
Buckle Up, Kazakhstan! A New Tax Code is Afoot
After months of intense discussions, debates, and amendments, the revised Tax Code of the Republic of Kazakhstan is heading towards the Senate for approval. With a majority of 76 in favor, 7 against, and 4 abstaining, the bill has made significant strides through the Mazhilis. The "AMANAT" party, a considerable faction in the working group refining the document, has played a pivotal role in its development.
Say Goodbye to Light Pockets?
Value Added Tax (VAT) remains a sensitive topic for the populace, as it directly impacts the cost of goods and services. Initially proposed to rise to 20%, the rate has been negotiated down to 16%. However, with a few exceptions, the increase still stings.
Among the exceptions, key exemptions include:
- Goods and services covered under the GOMBP (Guaranteed Volume of Free Medical Care), OSMS, and treatments for orphan and socially significant diseases.
- Select foodstuffs and domestic printed books.
- Reduced rates for paid medical services and medications starting from 2026 (5%) and 2027 (10%).
More lenient VAT rules have also been put in place for agricultural producers, with the refund threshold raised from 70% to 80%.
Small Business Scale-up
Small entrepreneurs could be in for a treat: the mandatory VAT registration limit has been bumped up to KZT 40 million, originally slated to drop to 15 million. Furthermore, the simplified declaration system has undergone a shift, transitioning from a permit-based system to a prohibited list of activities, allowing more small businesses to participate. A unified rate of 4% has been set, with regional authorities granted some leeway for adjustments.
Progressive IPN: Pay More, Earn More
From 2025, Kazakhstan will adopt a progressive Individual Income Tax (IIT) scale. Those earning up to 33.5 million tenge per year will still pay 10%, but those surpassing this amount will be subject to a 15% rate.
Meanwhile, dividend rates have also been restructured: 5% on earnings up to 1 billion tenge, and 15% on anything above. Non-residents of Kazakhstan will pay 10% on any income up to 2.3 billion tenge, with an additional 17% levied on any excess income.
The corporate income tax (CIT) rate for banks and the gambling sector increases to 25%, up from 20%. However, banks supporting small and medium businesses can still benefit from a preferential 20% rate for these incomes.
Minimum Indicators and Administrative Changes
The minimum calculation index (MIO) is escalating from 3,692 to 3,932 tenge, while the minimum wage remains at 85,000 tenge. This alteration will impact social payment and tax calculations.
New investment deductions have been instituted for expenses related to construction, equipment, software, and geological exploration. Fresh tax regimes, including a 0% mineral extraction tax (MET) rate for oil companies and subsoil users developing low-profit deposits, have also been introduced.
With the bill now in the Senate's hands, it is expected to either be approved or returned with minor tweaks. The Senate has sixty days to deliberate on the bill from the date of its registration in the Senate apparatus. The main parameters of the fiscal reform are already set in stone.
In total, the Government has proposed 71 amendments to the new code project and related bills, as well as 67 amendments to the existing Tax Code.
Stay tuned for the latest developments in this taxing tale!
Daria Stamgaliyeva
- The Impact on General News: The proposed Tax Code in Kazakhstan is a subject of interest in the general news arena, as it involves changes in finance, business, politics, and has significant implications for the populace.
- Businesses Brace for Change: With modifications in VAT, Individual Income Tax (IIT), and corporate income tax (CIT) rates, as well as changes in minimum indicators, businesses across Kazakhstan are preparing for potential adjustments and seizing opportunities in this taxing landscape.
