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

Article 648. Filing of tax returns

A tax agent is obliged to submit the calculation of the corporate income tax withheld at source of payment from the non-resident’s income to the tax authority at the place of its location within the following time limits:

1) for the first, second and third quarters – on or before the 15^th day of the second month following the quarter, in which income was paid to a non-resident;

2) for the fourth quarter – on or before March 31 of a year following a reporting taxable period established by Article 314 of this Code, in which income to a non-resident was paid and (or) for which income of a non-resident, assessed but unpaid, was allocated to deductibles.
Article 649. Features of filing tax returns

A non-resident operating in the Republic of Kazakhstan through its structural unit, which does not result in the formation of a permanent establishment in accordance with an international treaty or paragraph 6 of Article 220 of this Code, shall submit a corporate income tax declaration to the tax authority at its location within the time limits established by Article 315 of this Code.
Article 650. Calculation, withholding and transfer of tax on income from increase in value when selling property located in the Republic of Kazakhstan and shares, participatory interests related to subsoil use in the Republic of Kazakhstan

1. This article shall apply to the non-resident’s income from sources in the Republic of Kazakhstan from increase in value when selling:

1) 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;

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

3) shares issued by a resident and participatory interests in the authorized capital of a resident legal entity that is a subsoil user, or a consortium, whose participant (participants) is (are) a subsoil user (subsoil users);

4) shares issued by a resident legal entity and participatory interests in the authorized capital of a resident legal entity or consortium, in case of non-compliance with the conditions established by subparagraph 8) of paragraph 9 of Article 645 or subparagraph 7) of Article 654 of this Code;

5) shares issued by a non-resident legal entity and participatory interests in the authorized capital of a non-resident legal entity or a consortium, in case of non-compliance with the conditions established by subparagraph 8) of paragraph 9 of Article 645 or subparagraph 7) of Article 654 of this Code.

In this case, an increase in value is determined as follows:

1) as a positive difference between the property’s selling price and purchase price - when selling the property specified in subparagraphs 1) and 2) of this paragraph;

2) in accordance with Article 228 of this Code - when selling shares and participatory interests.

For the purposes of this subparagraph, a subsoil user is not recognized as a subsoil user only because of its right to extract groundwater and (or) common minerals for own use.

2. For the purposes of this article and Articles 288, 341, 645 and 654 of this Code, the share of the subsoil user’s (subsoil users’) property in the value of the legal entity’s assets, as of the day of sale of shares (participatory interests) or dividend payment, is the ratio of the value (values) of the subsoil user’s (subsoil users’) property, whose shares or participatory interests in which are owned by a legal entity paying dividends or whose shares (participatory interests) are being sold, to the total value of assets of such a legal entity.

For the purposes of this article and Articles 288, 341, 645 and 654 of this Code, the share of the subsoil user’s (subsoil users’) property in the total value of assets of consortium participants, as of the day of sale of participatory interests, is the ratio of the value (values) of the subsoil user’s (subsoil users’) property, whose shares or participatory interests in which are owned by consortium participants, participatory interests in which are being sold, to the total value of assets of such participants.

The value of the subsoil user’s property (depending on its organizational and legal form) is the book value of:

1) a participatory interest in such a subsoil user owned by a legal entity paying dividends, or shares (participatory interests) of which (in which) are being sold;

2) shares issued by such a subsoil user owned by a legal entity paying dividends, or shares (participatory interests) of which (in which) are being sold.

The total value of assets of a legal entity paying dividends or that, whose shares (participatory interests in which) are being sold, is the amount of the book value of all the assets of such a legal entity.

The book value of assets is determined on the basis of the data of separate financial statements of a legal entity paying dividends or that, whose shares (participatory interests in which) are being sold, or the data of participants in a consortium, whose participatory interests are being sold, which are prepared and approved in accordance with the requirements of the legislation of the state of establishment of such a legal entity or a consortium:

1) as of the date of payment of dividends or transfer of the right of ownership of shares (participatory interests) to a buyer;

2) in case of no separate financial statements as of the date of payment of dividends or transfer of the right of ownership of shares (participatory interests) to a buyer - as of the last reporting date preceding the date of payment of dividends or transfer of the right of ownership of shares (participatory interests) to a buyer.

3. The non-resident’s income, specified in paragraph 1 of this article, except for the income indicated in subparagraph 7) of paragraph 9 of Article 645 of this Code, shall be subject to income tax at source of payment at the rate established by Article 646 of this Code.

4. Authorized state and local executive bodies, carrying out state regulation in the field of subsoil use within their competence in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, submit to the authorized body information on a transaction for the purchase and sale of securities, participatory interests, specified in subparagraphs 3), 4) and 5) of paragraph 1 of this article, indicating:

1) the identification number and (or) its equivalent in the country of residence and the name of the legal entity and (or) the last name, first name, patronymic (if any) of an individual selling and purchasing the said shares (participatory interests);

2) the purchase price of the said shares (participatory interests);

3) the date of payment of income from the transaction;

4) information on the buyer’s previous activity, including the list of states, in which it has been operating within the last three years preceding the year of the transaction;

5) information on the affiliation of the person, selling the property, with other persons (the amount of direct or indirect participation).

5. Within three business days of the day of receipt of information from authorized state and local executive bodies carrying out state regulation in the field of subsoil use within their competence in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, the authorized body submits it to the tax authority at the location of a legal entity entitled to subsoil use in the Republic of Kazakhstan, specified in subparagraphs 3), 4) and 5) of paragraph 1 of part one of this article, concurrently notifying a tax authority vertically subordinated to it.

6. Within five business days of the day of receipt of the information, specified in paragraph 4 of this article, the tax authority at the location of a legal entity entitled to subsoil use in the Republic of Kazakhstan shall send to such a legal entity information on the acquirer of shares (participatory interests) and on the purchase price of such shares (participatory interests).

7. A person selling shares, participatory interests, immovable property is required to produce a copy of a document confirming the purchase (contribution) price to the buyer that is a tax agent.

In case of failure to submit to the tax agent a document confirming the purchase (contribution) price, the selling price shall be subject to income tax at source of payment.

8. The obligation and responsibility for calculating, withholding and transferring income tax at source of payment to the budget are imposed on a tax agent paying income.

In this case, a non-resident legal entity is recognized as a tax agent, regardless of whether or not it has a permanent establishment in the Republic of Kazakhstan, as well as a structural unit, whose activity does not result in the formation of a permanent establishment in accordance with the provisions of this Code or an international treaty.

9. A non-resident who is a tax agent is subject to mandatory registration.

Therewith, a non-resident legal entity that is a tax agent is subject to registration as a taxpayer with a tax authority in the manner prescribed by Article 76 of this Code.

10. Income tax at source of payment is withheld by a tax agent when paying income to a non-resident, regardless of the form and place of income payment.

11. A non-resident receiving income in the form of an increase in value, specified in paragraph 1 of this article, from a person that is not a tax agent shall calculate the income tax on its own by applying the rate established by Article 646 of this Code to the amount of such income.

12. A tax agent shall transfer the income tax amount to the budget within the time limits established by Article 647 of this Code.

The income tax, calculated in accordance with paragraph 11 of this article, shall be transferred to the budget within ten calendar days of the deadline set for filing tax returns.

Tax returns on the income tax withheld at source of payment from non-residents’ income are filed by a tax agent to the tax authority at the place of its registration in the Republic of Kazakhstan within the time limits established by Articles 648 and 657 of this Code.

Non-residents, calculating income tax in accordance with paragraph 11 of this article, shall submit an income tax declaration within the time limits established by Articles 315 or 659 of this Code.

13. A resident legal entity that is a subsoil user may pay income tax with the funds of a tax agent (taxpayer). At the same time, income tax shall be transferred to the budget by such a resident legal entity within 25 calendar days of the end of the month, in which the income tax amount is received from the tax agent (taxpayer). Tax returns on income tax withheld at source of payment from the non-resident’s income are filed by such a resident legal entity on or before the 15th day of the second month following the quarter, in which the income tax amount was received from the tax agent (taxpayer), to the tax authority at the location of the resident legal entity in the Republic of Kazakhstan.

The income tax amount transferred by a tax agent (taxpayer) to a resident legal entity that is a subsoil user specified in subparagraphs 3), 4) and 5) of part one of paragraph 1 of this article shall not be recognized as income of such a resident legal entity.

14. If a tax agent (taxpayer) fails to apply the provisions of paragraphs 12 and 13 of this article, a resident legal entity that is a subsoil user has the right to pay income tax on income from increase in value for a non-resident with its own funds within twenty five calendar days of the end of the month, in which the information specified in paragraph 6 of this article is received.

In case of payment of income tax in accordance with this paragraph, the resident legal entity, specified in subparagraphs 3), 4) and 5) of part one of paragraph 1 of this article, is required to file tax returns on income tax withheld at source of payment from the non-resident’s income to the tax authority at its location on or before the 15th day of the second month following the quarter, in which the information specified in paragraph 6 of this article is received.

At the same time, the tax amount paid for a non-resident is not subject to deduction when determining the taxable income of a legal entity that is a subsoil user.

15. If a tax agent (taxpayer), a resident legal entity that is a subsoil user specified in subparagraphs 3), 4) and 5) of part one of paragraph 1 of this article, apply the provisions of paragraphs 10, 12, 13 and 14 of this article, it is the duty of a resident legal entity that is a subsoil user to fulfill this obligation in the manner specified in Chapters 13 and 14 of this Code.

Footnote. Article 650 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall come into effect from 01.01.2021).

Chapter 73. THE ORDER FOR TAXATION OF INCOME OF A NON-RESIDENT LEGAL ENTITY OPERATING IN THE REPUBLIC OF KAZAKHSTAN THROUGH A PERMANENT ESTABLISHMENT