On taxes and other obligatory payments to the budget (Tax Code)

Article 224. Taxable income

Taxable income is defined as the difference between total annual income, with account of adjustments provided for in Article 241 of this Code, and deductions provided for in this section.

Footnote. Article 224 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (effective from 01.01.2020).

Subchapter 1. Total annual income

Article 225. Total annual income

1. Total annual income of a resident legal entity of the Republic of Kazakhstan consists of income (to be) received by this person from sources in the Republic of Kazakhstan and outside it within a taxable period.

For the purposes of this Section, all types of income that are not income from sources in the Republic of Kazakhstan are recognized as income from sources outside the Republic of Kazakhstan, regardless of the place of their payment.

Total annual income of a non-resident legal entity carrying out activity in the Republic of Kazakhstan through a permanent establishment consists of income specified in Article 651 of this Code.

2. For tax purposes, income is not:

1) the value of property received as a contribution to the authorized capital;

2) the value of property (to be) received by a shareholder, including that (to be) received in return of earlier contributed one, in the course of distribution of property upon liquidation of a legal entity or reduction of the authorized capital, and also the repurchase of shares issued by a legal entity-issuer of these shares from a shareholder in the amount of the paid authorized capital attributable to the number of shares, for which the property is distributed;

3) value of the property received by the participant, founder, including the property to be received (received) in exchange for previously contributed in the course of property distribution upon liquidation of a legal entity or reduction of the authorized capital, as well as repurchase by a legal entity from the founder, participant of a participatory interest or part thereof in this legal entity in the amount of the paid authorized capital attributable to the participation share to which the property is distributed, but no more than the initial value of such participatory share, determined as prescribed by paragraph 7 of Article 228 of this Code, for such a participant, founder;

4) the value of property received from the placement of shares by their issuer;

5) the value of property transferred free of charge - for a taxpayer transferring property;

6) the amount of penalties and fines written off in accordance with the tax legislation of the Republic of Kazakhstan;

7) the value of goods received for advertising purposes (also in the form of donations) at no cost, if the value of a unit of goods does not exceed 5 times the monthly calculated index established for a relevant financial year by the law on the republican budget and effective as of the date of such receipt of the goods;

8) the amount of reduction in a tax obligation in cases provided for by this Code;

9) unless otherwise provided by this Code, income arising from a change in the value of assets and (or) liabilities recognized as income in accounting in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting, except for the one to be received (received) from another person;

The provisions of this subparagraph shall also apply in the case provided for by paragraph 7-1 of Article 228 of this Code;

10) increase in undistributed profits due to reduction of reserves for revaluation of assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

11) income generated in connection with recognition of an obligation in accounting in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting, in the form of a positive difference between the size of the binding obligation and the cost of this obligation, recognized in accounting;

12) investment income received by mutual investment funds in accordance with the legislation of the Republic of Kazakhstan on investment and venture funds and recognized as such by the custodian of a mutual investment fund, except for remuneration for such a management company - for a management company that performs trust management of the assets of a mutual investment fund on the basis of a license for managing an investment portfolio;

13) the amount of compensation (to be) received in fulfillment of the tax obligation by such a person to pay excise duty on excisable goods, which is the product of processing of the customer’s raw materials - for a person who produced gasoline (except for aviation fuel), diesel fuel from the customer’s raw materials;

14) the value of property received by a state enterprise from a state institution in the form of:

fixed assets assigned to such an enterprise by the right of economic management or operations management;

money for the acquisition of fixed assets that will be assigned to such an enterprise on the basis of the right of economic management or operations management;

15) insurance payment received in the amount by which the group’s value balancewas reduced in accordance with paragraph 8 of Article 270 of this Code, with account of the excess amount provided for by Article 234 of this Code, if any;

16) the value (in monetary terms) of mineral resources received from a subsoil user in fulfillment of the tax obligation to pay taxes in kind - for a recipient on behalf of the state;

17) income from write-offs before commercial discovery during the period of exploration by a strategic partner of the liabilities of a national subsoil use company or a legal entity whose shares (participatory interests in the authorized capital) are directly or indirectly owned by such a national subsoil use company, and for remuneration on investment financing in accordance with the Code of the Republic of Kazakhstan On Subsoil and Subsoil Use - in the amount of remuneration that is assessed but not paid and is subject to accounting for the purposes of forming a separate group of depreciable assets in accordance with Article 258 of this Code;

18) income from the sale of minerals received from a subsoil user, in fulfillment of the tax obligation in kind, by a recipient on behalf of the state or by a person authorized by a recipient on behalf of the state to implement such realization;

19) commission of a recipient on behalf of the state or a person authorized by a recipient on behalf of the state, in terms of reimbursement of expenses associated with the sale of minerals received from a subsoil user in fulfillment of the tax obligation in kind;

20) the value of property, including works, services received in accordance with paragraph 8 of Article 243 of this Code;

21) receivable (received) remuneration that reduces the value of a facility under construction in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting, within the remuneration amount payable (paid) that increases the value of such a facility in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

22) the cost of electric grids:

recognized as ownerless in accordance with the civil legislation of the Republic of Kazakhstan, accepted by the energy transmission organization into ownership gratuitously;

accepted on a gratuitous basis by the power transmitting company by way of ownership transfer from state or local executive bodies, other power transmitting organizations or power grids owners that do not carry out power transmission activities;

23) the cost of services received for public money in the form of non-financial state support of business entities in accordance with the state program forthe development of agro-industrial complex of the Republic of Kazakhstan, programs approved by the Government of the Republic of Kazakhstan and operated by the National Chamber of Entrepreneurs of the Republic of Kazakhstan;

24) remained in force before 01.01.2019 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI;

Subparagraph 25) is valid until 01.01.2027 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.




25) income of a sustainability organization, whose 100 percent of voting shares are held by the National Bank of the Republic of Kazakhstan, arising in connection with depreciation, in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting, of a positive difference between:

the amount of assets in accordance with the terms of the agreement on gratuitous transfer of assets from the organization for improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan,

and their fair value;

26) technogenic mineral formations received, donated from state property;

26-1) an increase in the cost balance of groups (subgroups) of depreciable assets resulting from application of a conditional coefficient by a subsoil user under a contract for exploration and production or production of hydrocarbons on complex projects (with the exception of onshore gas projects) in accordance with paragraph 6 of Article 258 and (or ) paragraph 2-1 of Article 268 of this Code;

Subparagraph 27) is valid until 01.01.2027 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.




27) for a railway carrier carrying out activities for the transportation of passengers, baggage, cargo luggage, postal items - income arising from the receipt of services of the main railway network when transporting passengers by rail on a free basis, from the National Infrastructure Operator, including using a temporary reduction coefficient in the amount of 0 to the tariff for regulated services of the main railway network when transporting passengers by rail in accordance with the legislation of the Republic of Kazakhstan;

Subparagraph 28) shall be valid from 01.01.2020 to 01.01.2027 in accordance with the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI.




28) forfeits (fines, penalties) awarded to a bank that underwent restructuring by a court resolution, whose more than 90 percent of voting shares as of December 31, 2013 belong to the national managing holding or a legal entity that was previously such a bank, on credits (loans) and (or) debt related to a credit (loan), whose debt, subject to forgiveness, is included in the list approved before July 1, 2019 by the management body of such a legal entity and submitted to the authorized body no later than August 1, 2019;

28-1) the cost of property, the cost of major repairs, reconstruction of state-owned facilities received gratuitously as part of charitable assistance by a legal entity with one hundred percent participation of the state in the authorized capital from a non-profit organization established in the form of a fund in accordance with the civil legislation of the Republic of Kazakhstan;

29) was valid from 01.01.2018 to 01.01.2021 in accordance with the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI.

Footnote. Article 225 as amended by the Law of the Republic of Kazakhstan dated 04.07.2018 No. 174-VІ (shall be enforced upon expiry of ten calendar days after its first official publication); No. 295-VІ dated 27.12.2019 (shall be enforced since 01.01.2020); dated 10.12. 2020 No. 382-VI (enforcement, Article 2); dated 21.12.2022 No. 165-VII (enforcement, see art.4).