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

Article 640. Excess on individual income tax

Article 641 is provided for amendments by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall come into effect from 01.01.2021)

Article 641 shall come into effect from 01.01.2025 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.
Article 641 Procedure and terms for payment of tax calculated in the declaration of income and property

Article 642 shall come into effect from 01.01.2025 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.
Article 642. Income of a resident labour immigrant

Article 643 shall come into effect from 01.01.2025 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.
Article 643 Personal income tax declaration and deadlines for its submission
Section 19. Taxation of non-residents
Article 644. Income of a non-resident from sources in the Republic of Kazakhstan

1. The following types of income are recognized as income of a non-resident from sources in the Republic of Kazakhstan:

1) income from the sale of goods in the territory of the Republic of Kazakhstan, as well as income from the sale of goods, located in the Republic of Kazakhstan, beyond its borders for the purposes of foreign trade activity;

2) income from the performance of works, rendering of services in the territory of the Republic of Kazakhstan;

3) income from the provision of managerial, financial, consulting, engineering, marketing, auditing and legal services (except for services for representation and protection of rights and legitimate interests in courts, arbitration tribunals or mediation courts, as well as notarial services) outside the Republic of Kazakhstan.

For the purposes of this Section, financial services are as follows:

the activity of participants in the insurance market (except for insurance and (or) reinsurance services), securities market;

the activity of the single accumulative pension fund and voluntary accumulative pension funds;

banking activities, activities of organizations for conducting certain types of banking operations (except for services provided to a structural unit of a legal entity-resident of the Republic of Kazakhstan, located outside the Republic of Kazakhstan, for opening and maintaining bank accounts, transfer, cash transactions, exchange transactions with foreign currency, including exchange operations with foreign currency in cash, acceptance of payment documents for collection);

the activity of the central depository and mutual insurance companies;

the activity of the social health insurance fund;

4) income of a person, registered in a state with preferential taxation, included in the list approved by the authorized body, from performing works, rendering services irrespective of the place of their actual performance, rendering and also other income indicated in this article.

The provisions of this subparagraph do not apply to income from:

rendering tourist services to an individual in the territory of such a state;

carrying out the airport activity defined in accordance with the legislation of the Republic of Kazakhstan;

5) income of a person registered in a foreign state in the form of obligations on the advance payment (prepayment) received, not taxed in accordance with subparagraph 5-1) of this part, if one of the following conditions is met:

not satisfied by a non-resident after a two-year period from the day of an advance payment (prepayment);

not satisfied by a non-resident as of the date of filing liquidation tax returns in the course of liquidation of a person that made an advance payment (prepayment) prior to expiration of a two-year period from the day of an advance payment (prepayment), unless otherwise provided for in this subparagraph.

If in case of liquidation of a person that made an advance payment (prepayment), it is required to conduct a liquidation tax audit or issue an opinion following the results of an in-house audit in accordance with this Code, the amount of such an obligation is determined as:

the amount of obligations (except for VAT amount) payable in accordance with the taxpayer’s source documents and (to be) indicated on interim liquidation balance-sheet, as of the date of approval of such balance-sheet

minus

the amount of obligations that will be satisfied between the day of approval of interim liquidation balance-sheet and the day of completion of a liquidation tax audit or an in-house audit.

Pursuant to the results of the liquidation tax audit, the amount of the obligation is determined by a tax authority on the basis of actual amount of satisfied obligations for the specified period. The amount of such an obligation is indicated in a tax audit report.

Pursuant to the results of an in-house audit, the amount of the obligation is determined by a tax authority on the basis of actual amount of satisfied obligations for the specified period and is indicated in a notification about elimination of violations revealed by the results of the in-house audit;

In this case, the provisions of this Subparagraph regarding the income of persons registered with the states not included in the list approved by the authorized agency of states with preferential taxation, apply to advances (prepayment) paid (from January 1, 2019);

5-1) income of a person registered in a foreign state in the form of obligations on the received advance payment (prepayment) if the following conditions are present simultaneously:

an international agreement on double taxation avoidance has not been concluded with the non-resident state;

the term of the agreement (contract) is more than two years;

6) income from increase in value in case of sale of:

property located in the territory of the Republic of Kazakhstan, the right to which or transactions for which are subject to state registration in accordance with the laws of the Republic of Kazakhstan;

property located in the territory of the Republic of Kazakhstan subject to state registration in accordance with the laws of the Republic of Kazakhstan;

securities issued by a resident, as well as participatory interests in the authorized capital of a resident legal entity, a consortium located in the Republic of Kazakhstan;

shares issued by a non-resident, as well as participatory interests in the authorized capital of a non-resident legal entity, a consortium, if 50 or more percent of the value of such shares, participatory interests or assets of a non-resident legal entity is property located in the Republic of Kazakhstan;

7) income from assigning the right to claim a debt to a resident or a non-resident legal entity operating in the Republic of Kazakhstan through a permanent establishment - for a non-resident that conceded the right to claim.

At the same time, the amount of such income is determined in the form of positive difference between the value of the right of claim, for which the assignment was made, and the value of the claim receivable from the debtor as of the date of assignment of the right of claim, according to the non-resident’s source documents;

8) income from assigning rights of claim when acquiring the rights to claim a debt from a resident or a non-resident legal entity operating in the Republic of Kazakhstan through a permanent establishment - for a non-resident acquiring the right of claim.

At the same time, the amount of such income is determined in the form of positive difference between the principal debt amount receivable from the debtor, including the amount in excess of the principal debt as of the date of assignment of the right of claim, and the value of acquisition of the right of claim;

9) income in the form of forfeit (fines, penalty) and other types of sanctions, except for unreasonably withheld fines that were returned from the budget;

10) income in the form of dividends received from a resident legal entity, as well as from mutual funds established in accordance with the laws of the Republic of Kazakhstan;

11) income in the form of interest, except for interest on debt securities;

12) income in the form of interest on debt securities received from their issuer;

13) income in the form of royalties;

14) income from providing property into property lease (rent) that is or will be located in the Republic of Kazakhstan, except for financial lease;

15) income received from immovable property located in the Republic of Kazakhstan;

16) income in the form of insurance premiums paid under insurance or reinsurance contracts for risks arising in the Republic of Kazakhstan;

17) income from rendering international transportation services.

For the purposes of this Section, any transportation of passengers, baggage, goods, including mail, by sea, river or air, road or rail between points located in different states, one of which is the Republic of Kazakhstan, is recognized as international transportation.

For the purposes of this Section, the following is not recognized as international transportation:

transportation carried out only between points outside the Republic of Kazakhstan, and also only between points located in the territory of the Republic of Kazakhstan;

transportation of goods through main pipelines;

18) income in the form of payment for the demurrage of a vessel during loading and unloading operations in excess of the lay time provided for in an agreement (contract) on (for) the carriage of goods by sea;

19) income received from the operation of pipelines, power transmission lines, fiber-optic communication lines located in the territory of the Republic of Kazakhstan;

20) income of a non-resident individual from activity in the Republic of Kazakhstan under an employment contract (agreement) concluded with a resident or non-resident employing him/her;

21) income of a non-resident migrant worker under an employment contract concluded in accordance with the labor legislation of the Republic of Kazakhstan on the basis of a permit to a migrant worker;

22) the director’s fee and (or) other payments to members of the management body (the board of directors or other body) received by the said persons in connection with the performance of management duties imposed on them with respect to a resident, regardless of the place of actual performance of such duties;

23) allowances to a non-resident individual paid to him/her in connection with residence in the Republic of Kazakhstan by a resident or non-resident employing him/her;

24) income of a non-resident individual from activity in the Republic of Kazakhstan in the form of material benefits received from his/her employer.

For the purposes of this Section, material benefits also include:

payment and (or) reimbursement of the value of goods, performed works, rendered services that were received by a non-resident individual from third parties;

negative difference between the value of goods, works, services sold to a non-resident individual and the purchase price or production cost of these goods, works, services;

write-off of the amount of debt or obligation of a non-resident individual;

25) income of a non-resident individual in the form of material benefits received from a person, who is not his/her employer

26) pension payments made by a resident accumulation pension fund;

26-1) insurance payments to non-resident individuals, made under a pension annuity agreement;

27) income of a theater, film, radio, TV actor/actress, musician, artist, athlete and another non-resident individual from his/her activity in the Republic of Kazakhstan in the field of culture, art and sports, regardless of how and to whom payments are made;

28) income in the form of a prize;

29) income from rendering independent personal (professional) services in the Republic of Kazakhstan;

30) income in the form of property received for free or inherited one, including works, services, except for property received for free by a non-resident individual from a resident individual.

The value of works performed and services rendered free of charge is determined as the amount of expenses incurred in connection with the performance of such works, rendering of such services.

The value of property received for free, except for works performed and services rendered for free, is determined as the amount of its book value according to accounting records of a person, who transferred such property, as of the date of transfer of the property.

If it is not possible to determine the value of the property received free of charge according to accounting records, and also that of inherited property, the value of such property as of the date of transfer or inheritance is established in one of the following ways:

on the basis of the value established by the “Government for Citizens” State Corporation as of January 1 of a calendar year, within which such property was received;

on the basis of the quotation price of a security traded on a Kazakhstani or foreign stock exchange, as of the day of coming into inheritance (possession) of the said security.

If it is not possible to determine the value of the property received for free or inherited in the manner prescribed by this subparagraph, the value is determined on the basis of a property appraisal report;

31) income from derivative financial instruments;

32) income from transfer of property into trust management to a resident not obliged to fulfill a tax obligation in the Republic of Kazakhstan for a non-resident, who is a trust management founder;

33) income from an investment deposit placed with an Islamic bank;

34) other income arising from activity in the territory of the Republic of Kazakhstan.

In this case, the provisions of subparagraphs 3), 4), 5), 11), 12), 13), 25) and 28) of this paragraph shall apply if income is assessed, paid and (or) expenses for income payment are allocated to deductibles by:

a resident;

a non-resident operating in the Republic of Kazakhstan through a permanent establishment if the assessment, payment of income and (or) allocation of expenses for income payment to deductibles are related to the activity or property of such a permanent establishment;

a structural unit of a non-resident legal entity, in case such a structural unit does not set up a permanent establishment in accordance with an international treaty regulating the avoidance of double taxation and prevention of tax evasion, or paragraph 6 of Article 220 of this Code.

2. The income of a non-resident from sources in the Republic of Kazakhstan is not:

1) the amount of income tax calculated from the income of a non-resident in accordance with the provisions of this Code and paid to the budget of the Republic of Kazakhstan by a tax agent with his/heregulatingiblesto , as t ln e a own funds without withholding this income tax;

2) compensation of expenses to members of the management body (the board of directors or other body) incurred in connection with the performance of managerial duties imposed on them by a resident, to the extent of:

actually incurred travel expenses to the place of performance of managerial duties and back, including the payment of expenses for reservation, on the basis of documents confirming such expenses (including an electronic ticket, an electronic travel document given a document confirming its payment, as well as a boarding pass or another document confirming the fact of travel and issued by a carrier);

accommodation expenses actually incurred outside the Republic of Kazakhstan on the basis of documents confirming such expenses, but within the ceiling rates for reimbursement of expenses for hiring single standard hotel rooms for civil servants being on business trips abroad;

accommodation expenses actually incurred in the Republic of Kazakhstan on the basis of documents confirming such expenses;

the amount of money not exceeding 6 times the monthly calculation index established by the law on the national budget and effective as of January 1 of a relevant financial year for each calendar day of stay within the Republic of Kazakhstan for performing managerial duties for a period not exceeding forty calendar days;

the amount of money not exceeding 8 times the monthly calculation index established by the law on the national budget and effective as of January 1 of a relevant financial year for each calendar day of stay outside the Republic of Kazakhstan for performing managerial duties for a period not exceeding forty calendar days. In this case, the place of fulfillment of managerial duties shall not coincide with the place of permanent residence;

3) income of a non-resident legal entity received from:

autonomous educational organizations defined by subparagraphs 1), 2) and 3) of paragraph 1 of Article 291 of this Code;

a non-profit organization applying the provisions of Article 289 of this Code, established by the person specified in the second paragraph of this subparagraph;

autonomous educational organizations, defined by subparagraphs 4) and 5) of paragraph 1 of Article 291 of this Code, for the performance of work, the provision of services for the types of activities specified in subparagraphs 4) and 5) of paragraph 1 of Article 291 of this Code;

bodies of the Astana International Financial Center or organizations of the body of the Astana International Financial Center;

Paragraph 3-1) shall remain in force before 01.01.2029 in accordance with the Law of the Republic of Kazakhstan dated 26.12.2018 No. 203-VI.




3-1) income, except for income of a person registered with a state with preferential taxation, included in the list approved by the authorized agency, from the provision of consulting, marketing, engineering services, information security services, work on the creation of data processing centers, paid by the legal entity specified in Subparagraph 6) of Paragraph 1 of Article 293 of this Code.

The provision of this subparagraph shall apply subject to the acquisition of such works, services for the implementation of activities included in the list of priority activities in the field of information and communication technologies, approved by the authorized body in the field of informatization in agreement with the central authorized body for state planning, the authorized state body carrying out state regulation in the field of technical regulation, and the authorized body;

4) income of a non-resident legal entity in the form of royalties paid by the autonomous educational organizations defined by subparagraphs 2), 3), 4) and 5) of paragraph 1 of Article 291 of this Code;

Paragraph 4-1) shall remain in force before 01.01.2024 in accordance with the Law of the Republic of Kazakhstan dated 26.12.2018 No. 203-VI.




4-1) income of a non-resident legal entity, except for income of a person registered with a state for preferential taxation included in the list approved by the authorized agency in the form of royalty paid by the legal entity specified in Subparagraph 6) of Paragraph 1 of Article 293 of this Code.

The provision of this Subparagraph applies to royalty income paid for implementation of activity included in the list of priority activities for information and communication technologies, approved by the authorized agency for informatization in agreement with the central authorized agency for state planning, the authorized agency for state supporting of industrial and innovative activity and the authorized agency;

5) the value of property received as a contribution to the authorized capital of a non-resident legal entity, as well as the value of property received by a non-resident issuer from the placement of shares issued by it.

Footnote. Article 644 as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VІ (see Article 2); dated 26.12.2018 No. 203-VI (shall be enforced from 01.01.2019); dated 03.07.2019 No. 262-VI (shall come into effect from 01.01.2021); dated December 10, 2020, No. 382-VI (refer to Article 2 for the procedure of enacting); dated 21.12.2022 No. 165-VII (shall be enforced from 01.01.2023)

Chapter 72. THE ORDER FOR TAXATION OF INCOME OF A NON-RESIDENT LEGAL ENTITY, WHOSE ACTIVITY DOES NOT RESULT IN THE FORMATION OF A PERMANENT ESTABLISHMENT IN THE REPUBLIC OF KAZAKHSTAN