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

Article 290. Taxation of organizations operating in the social sphere

1. When determining the amount of corporate income tax payable to the budget, taxpayers, that are organizations operating in the social sphere in accordance with this article, reduce the amount of corporate income tax calculated in accordance with Article 302 of this Code by 100 percent.

2. For the purposes of this Code, organizations operating in the social sphere include organizations that carry out the types of activities specified in part two of this Paragraph, the income from which, with account of income in the form of property received free of charge and interest on deposits,and also the excess of amount of positive exchange rate difference over the amount of negative exchange rate difference that arose on such income shall not be less than 90 percent of total annual income of such organizations.

Activities in the social sphere are as follows:

1) rendering of services in the form of medical assistance in accordance with the legislation of the Republic of Kazakhstan (including medical activities not subject to licensing) by a healthcare entity licensed to carry out medical activity;

2) rendering of services for primary, secondary, general secondary education, technical and professional, post-secondary, higher and postgraduate education under appropriate licenses entitling to carry out educational activities, as well as additional education, pre-school education and training.

The income specified in this Subparagraph also includes the income of a non-profit organization created in the form of a public fund, in the form of:

dividends received from an organization operating in social sphere, the founder of which is such a non-profit organization created in the form of a public fund, carrying out activity in social sphere specified in this Subparagraph;

income from increase in value in sale of shares and (or) participatory interests in organizations carrying out the activity in social sphere, the founder of which is such a non-profit organization created in the form of a public fund, carrying out activity in social sphere specified in this Subparagraph;

The income of a non-profit organization created in the form of a public fund carrying out the activity in social sphere specified in Subparagraph 2) of part two of this Paragraph shall also not be taxable when it is directed to create an organization carrying out the activity in social sphere and provide it with interest-free repayable financial assistance (loan).

3) activities in science (including scientific research, use, including sale, by the author of scientific intellectual property), carried out by scientific and (or) scientific and technical entities accredited by the authorized body in the field of science, sports (except for sports- entertainment commercial activities), culture (except for entrepreneurial activities, with the exception of entrepreneurial activities of organizations with 100% participation of the state in the authorized capital), provision of conservation services (except for the dissemination of information and propaganda) historical and cultural heritage sites and cultural values ​​included in the State List of monuments of history and culture in accordance with the legislation of the Republic of Kazakhstan, as well as in the field of social protection and social security of children, the elderly and the disabled;

4) library services.

The income of the organizations indicated in this paragraph is not subject to taxation if it goes to carry out the specified types of activities.

The income of a non-profit organization created in the form of a public fund carrying out the activity in social sphere specified in Subparagraph 2) of part two of this Paragraph shall also not be taxable when it is directed to create an organization carrying out the activity in social sphere and provide it with interest-free repayable financial assistance (loan).

3. For the purposes of this Code, organizations operating in the social sphere shall also include public associations of disabled people of the Republic of Kazakhstan and organizations created by public associations of disabled people of the Republic of Kazakhstan, which for the reporting tax period, as well as the tax period preceding the reporting tax period, meet one of the following conditions:

1) the average number of disabled persons who are employees is at least 51 percent of the total number of employees;

2) expenses for remuneration of the disabled who are employees are at least 51 percent (in specialized organizations employing the disabled with loss of hearing, speech, and vision - at least 35 percent) of the total labor remuneration expenses.

In this case, compliance with the condition referred to in part one of this paragraph shall be determined by:

newly created (emerged) organizations – over the reporting tax period in which they were registered with the justice authority;

organizations operating under a long-term contract - during the entire period of such a contract.

Income of the organizations provided for by this paragraph shall be exempt from taxation if 90 percent of the income is received (receivable) from the sale of produced (manufactured) goods, performance of work, provision of services, the production of which was carried out with participation of disabled people who are employees of such an organization, and direction of the received income for the activities of such an organization.

4. Organizations operating in the social sphere do not include those receiving income from activities related to the production and sale of excisable goods.

5. In case of violation of the conditions stipulated by this article, the income received is subject to taxation in the manner determined by this Code.

6. The provisions of this article shall not apply to organizations recognized autonomous educational organizations in accordance with Article 291 of this Code.

Footnote. Article 290 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated December 10, 2020 No. 382-VI (enforcement, Article 2).