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

Article 665. Method of immediate (direct) recognition of expenses as deductibles

1. The method of immediate (direct) recognition of allocable expenses of a non-resident legal entity as deductibles is used if a non-resident legal entity maintains separate accounting for income and expenses (including managerial and general administrative expenses) of its head office and permanent establishments in the Republic of Kazakhstan and other countries.

2. Allocable expenses of a non-resident legal entity shall be recognized as deductibles by a permanent establishment in the Republic of Kazakhstan in accordance with this article if they are identified on the basis of supporting documents and directly incurred in order to obtain income from activity in the Republic of Kazakhstan through a permanent establishment.

3. The below mentioned documents are considered to be supporting ones:

1) accounting source documents confirming allocable expenses of a non-resident legal entity incurred in the territory of the Republic of Kazakhstan in order to receive income from activity in the Republic of Kazakhstan through its permanent establishment;

2) copies of accounting source documents confirming allocable expenses of a non-resident legal entity incurred outside the Republic of Kazakhstan in order to receive income from activity in the Republic of Kazakhstan through its permanent establishment;

3) tax registers accounting for allocable expenses of a non-resident legal entity incurred both in and outside the Republic of Kazakhstan the Republic of Kazakhstan in order to receive income from activity in the Republic of Kazakhstan through its permanent establishment, which are drawn up on the basis of accounting source documents confirming these expenses.

The form of a tax register, the order for its completion are recorded in the tax accounting policy of a non-resident legal entity operating in the Republic of Kazakhstan through its permanent establishment;

4) a copy of financial statements of a non-resident legal entity drawn up in accordance with the requirements of the legislation of the state of its establishment and (or) residency of such a legal entity and certified by a signature of its head and a seal (if any) of such a non-resident legal entity.

At the same time, the total amount of managerial and general administrative expenses of a non-resident legal entity shall be indicated in a separate line in the financial statements, specified in this subparagraph;

5) a copy of a tax audit report on the audit of financial statements of a non-resident legal entity (in case of auditing such financial statements).
Article 666. The order for application of an international treaty in respect of full exemption from taxation of non-resident’s income received from sources in the Republic of Kazakhstan

1. The taxation procedure established by this Article shall apply to the income of foreigners and stateless persons sent to the Republic of Kazakhstan by a non-resident legal entity that is not registered as a taxpayer of the Republic of Kazakhstan, including income specified in Article 322 of this Code, received (receivable):

1) in respect of which the procedure for applying the provisions of an international treaty is established by Articles 667, 668, 669, 670 and 671 of this Code;

2) specified in Article 650 of this Code, in respect of which the procedure established by Articles 672, 673 and 674 of this Code applies.

2. If a non-resident receives income from rendering services, performing works within the framework of one and the same project or related projects for the purposes of this article, a tax agent establishes the fact of formation of a permanent establishment by a non-resident, also on the basis of an agreement (contract) on (for) rendering services or performing works, as well as the documents, specified in paragraph 5 of this article.

If a tax agent establishes the fact of formation of a permanent establishment by a non-resident in the Republic of Kazakhstan, he/she/it is not entitled to apply the provisions of an international treaty regarding the exemption of income of non-residents in the Republic of Kazakhstan.

3. The tax agent shall have the right to independently apply the exemption from taxation when paying income to a non-resident or deducting the accrued but not paid income of a non-resident.

In case of payment of income to a non-resident - an interconnected party that is a resident of the state with which the Republic of Kazakhstan has concluded an international agreement, which is not amended by a multilateral international agreement, the tax agent shall have the right to apply the provision of part one of this paragraph, provided that such a non-resident is the final (actual) recipient (owner) of income.

In case of payment of income to a non-resident - an interconnected party that is a resident of the state with which the Republic of Kazakhstan has concluded an international agreement, which has been amended by a multilateral international agreement, the tax agent has the right to apply the provision of part one of this paragraph, while simultaneously fulfilling the following conditions:

such income shall be subject to inclusion in the taxable income of a non-resident in a foreign state of which the non-resident is a resident, and shall be subject to taxation without the right to exclude such income from taxable income and (or) reduce (adjust) taxable income by the amount of such income in the reporting period, and (or) refund in the reporting and (or) subsequent periods of the tax paid on this taxable income;

the nominal tax rate, which is applied when taxing this income in a foreign state, of which the non-resident is a resident, in the reporting period is at least 15 percent.

For part three of this paragraph, the nominal rate shall refer to the rate established by the tax legislation of a foreign state.

4. An international treaty is applied if a non-resident submits a document, confirming his/her/its residency, to a tax agent.

In this case, a non-resident shall submit a document confirming residency to a tax agent on or before one of the dates below, whichever comes first:

1) March 31 of a year following a taxable period, determined in accordance with Article 314 of this Code, within which income was paid to a non-resident or unpaid income of a non-resident was recognized as deductibles;

2) within five business days before completing a tax audit on the fulfillment of a tax obligation for income tax withheld at source of payment for a taxable period, within which income was paid to a non-resident. The date of completion of the tax audit is determined in accordance with a relevant prescription.

5. If a non-resident legal entity renders services or performs works in the territory of the Republic of Kazakhstan within a time period not leading to the formation of a permanent establishment in the Republic of Kazakhstan, for the purposes of applying the provisions of an international treaty, such a non-resident submits to a tax agent, along with a document confirming residency,:

notarized copies of constituent documents or

an extract from the commercial register (register of shareholders) or another similar document provided for by the legislation of the state of registration of a non-resident, indicating the founders (participants) and majority shareholders of the non-resident legal entity.

If the legislation of a foreign state does not require a non-resident to have constituent documents or an obligation to register in the commercial register (register of shareholders) or another similar document provided for by the legislation of the state of registration of a non-resident, such a non-resident submits to a tax agent:

a document (certificate) that underlay the formation of a non-resident, the legal force (validity) of which is confirmed by a relevant authority of the foreign state of registration of such a non-resident or

another document indicating the organizational structure of a consolidated group, to which the non-resident belongs, indicating the names of all of its participants and their geographical location (the names of the states (territories) where the members of the consolidated group are established (set up) and the state and tax registration numbers of all participants in the consolidated group.

6. If services are rendered or works are performed in the territory of the Republic of Kazakhstan within a time period not leading to the formation of a permanent establishment in the Republic of Kazakhstan within the framework of a joint activity agreement, a non-resident legal entity that is a party to such an agreement, for the purposes of application of the provisions of an international treaty, along with the documents, specified in paragraphs 4 and 5 of this article, shall provide to a tax agent a notarized copy of the joint activity agreement or another document confirming its participatory interest in the joint activity.

If a non-resident does not form a permanent establishment as a result of rendering services or performing works under such an agreement (contract) and related projects, a tax agent has the right to apply the provisions of an international treaty to the income of a non-resident legal entity in proportion to its participatory interest in the joint activity, specified in a joint activity agreement or another document confirming its participatory interest in the joint activity.

7. In tax returns filed to a tax authority, a tax agent is obliged to indicate the amount of income that was assessed (paid) to a non-resident and the amount of taxes withheld, the amount of taxes exempted from withholding in accordance with the provisions of international treaties, income tax rates and international treaties.

In this case, within five calendar days of the date set for filing tax returns for the fourth quarter, a tax agent shall submit to a local tax authority a copy of a document confirming the residency of the non-resident that is a final (actual) recipient (owner) of income.

8. If a tax agent fails to apply the provisions of an international treaty, a tax agent shall withhold income tax at source of payment in the manner prescribed by Article 645 of this Code.

The amount of withheld income tax shall be transferred to the state budget within the time limits established by Article 645 of this Code.

9. In case of unlawful application of the provisions of an international treaty, resulting in non-payment or incomplete payment of tax to the state budget, the tax agent shall be liable in accordance with the laws of the Republic of Kazakhstan.

Footnote. Article 666 as amended by the Law of the Republic of Kazakhstan dated December 10, 2020, No. 382-VI (refer to Article 2 for the procedure of enacting);



Article 667. The order for application of an international treaty in respect of tax exemption or application of a reduced tax rate to income of a non-resident in the form of dividends, fees and (or) royalties received from sources in the Republic of Kazakhstan

1. Unless otherwise established by an international treaty, when paying income to a non-resident in the form of dividends, remuneration and (or) royalties or when classifying unpaid income of a non-resident in the form of remuneration and (or) royalties as deductions, a tax agent shall the right to independently apply tax exemption or a reduced rate tax provided for by an international treaty, subject to the following conditions:

1) a non-resident is a final (actual) recipient (owner) of income;

2) a document confirming the residency of a non-resident is submitted to a tax agent within the time period established by paragraph 4 of Article 666 of this Code.

For this section, the final (actual) recipient (owner) of income should be understood as a person who has the right to own, use, dispose of income and is not an intermediary concerning such income, including an agent, nominee holder.

At the same time, when paying income in the form of dividends, remuneration and (or) royalties to a non-resident - a related entity that is a resident of a state with which the Republic of Kazakhstan has concluded an international agreement, which has been amended by a multilateral international agreement, the tax agent shall have the right to apply the provision of part one of this paragraph upon simultaneous fulfillment of the following conditions:

such income is subject to inclusion in the taxable income of a non-resident in a foreign state of which the non-resident is a resident, and is subject to taxation without the right to exclude such income from taxable income and (or) reduce (adjust) taxable income by the amount of such income in the reporting period, and ( or) refund in the reporting and (or) subsequent periods of the tax paid on this taxable income;

the nominal tax rate, which is applied when taxing this income in a foreign state, of which the non-resident is a resident, in the reporting period is at least 15 percent.

For the purposes of part three of this paragraph, the nominal rate is understood as the rate established by the tax legislation of a foreign state.

2. When paying income in the form of fees to a final (actual) recipient (owner) of income through an intermediary, a tax agent is entitled to apply tax exemption or a reduced income tax rate provided for by an international treaty concluded with the state of residency of the final (actual) recipient (owner), provided all of the following requirements are met:

1) an agreement (contract), which is a ground for paying fees, specifies the fee amounts with respect to each person that is a final (actual) recipient (owner) of the fee through an intermediary, indicating the data of such a person (the last name, first name, patronymic (if it is indicated in an identity document) of an individual or the name of a legal entity); tax registration number in the country of incorporation or its equivalent (if any); state registration number in the country of incorporation (or its equivalent);

2) a document confirming the residency of a non-resident that is a final (actual) recipient (owner) of the fee is submitted to a tax agent within the time period established by paragraph 4 of Article 666 of this Code.

3. Within five calendar days of the date set for filing tax returns for the fourth quarter, a tax agent shall submit to the tax authority at his/her/its location a copy of a document confirming the residency of the non-resident that is a final (actual) recipient (owner) of income.

4. If a tax agent fails to apply the provisions of an international treaty, the tax agent is required to withhold income tax at source of payment in the manner specified in Article 645 of this Code.

The amount of withheld income tax shall be transferred to the state budget within the time limits established by Article 647 of this Code.

5. In accordance with the provisions of an international treaty, a non-resident final (actual) recipient (owner) of income has the right to claim the refund of income tax withheld at source of payment in excess, in case income tax withheld at source of payment of income to such a non-resident was transferred to the state budget by a tax agent. Income tax withheld in excess shall be refunded to a non-resident by a tax agent.

In this case, a non-resident final (actual) recipient (owner) of income is obliged to submit to a tax agent:

1) a notarized copy of an agreement (contract) concluded with an intermediary, stating the amount of the fee to such a non-resident, indicating the data of such a person (the last name, first name, patronymic (if it is indicated in an identity document) of an individual or the name of a legal entity); tax registration number in the country of incorporation or its equivalent (if any); state registration number in the country of incorporation (or its equivalent);

2) a document confirming the residency of a non-resident for the period, for which income in the form of a fee is assessed to such a non-resident.

The documents, specified in part two of this paragraph, shall be submitted by a non-resident within the limitation period, established by Article 48 of this Code, from the date of the last transfer of income tax withheld at source of payment to the state budget, unless an international treaty provides for other time limits.

6. In case of refund of withheld income tax to a non-resident in accordance with paragraph 5 of this article, a tax agent has the right to submit to the tax authority at his/her/its location an additional calculation of income tax withheld at source of payment with regard to the amount of reduction, when applying a reduced tax rate or tax exemption for the taxable period, within which income tax on the income of a non-resident final (actual) recipient (owner) of income in the form of fees was withheld and transferred.

In this case, the amount of income tax withheld at source of payment in excess is credited to the tax agent in the manner prescribed by Article 102 of this Code.

Footnote. Article 667 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); dated 21.12.2022 No. 165-VII (shall be enforced from 01.01.2023).



Article 668. The order for application of an international treaty in respect of partial exemption from taxation of income of a non-resident in the form of dividends on shares that are the underlying asset of depositary receipts

1. When paying income in the form of dividends on shares that are the underlying asset of depositary receipts to a non-resident final (actual) recipient (owner) of income through a nominal holder of depositary receipts, a tax agent has the right to apply a reduced income tax rate provided for by a relevant international treaty concluded with the state of residency of the final (actual) recipient (owner) of such income, provided all of the following requirements are met:

1) there is a list of holders of depositary receipts containing:

last names, first names, patronymics (if any) of individuals or the names of legal entities owning depositary receipts, the underlying asset of which is shares issued by a resident of the Republic of Kazakhstan;

information on the number and type of depositary receipts;

the name and details of identity documents of individuals, or the numbers and dates of state registrations of legal entities.

The list of holders of depositary receipts is made by the following persons:

the central depository - if an agreement for the registration and confirmation of ownership of depositary receipts is concluded between a resident issuer of shares that are the underlying asset of depositary receipts and the central depository;

or another organization with the right to carry out the depository activity on the securities market of a foreign state - if an agreement for the registration and confirmation of ownership of depositary receipts is concluded between a resident issuer of shares that are the underlying asset of depositary receipts and such an organization;

2) there is a document confirming the residency of a non-resident that is a final (actual) recipient (owner) of dividends on shares that are the underlying asset of depositary receipts.

In this case, a document confirming the residency is submitted to the tax agent within the time period established by paragraph 4 of Article 666 of this Code.

2. In tax returns filed to a tax authority, a tax agent is obliged to indicate the amount of income assessed (paid) and the amount of taxes withheld, the amount of taxes exempted from withholding in accordance with the provisions of international treaties, income tax rates and international treaties.

In this case, a tax agent is obliged to submit a copy of a document confirming the residency of a non-resident taxpayer to the tax authority at his/her/its location. Such a copy shall be submitted within five calendar days of the date set for filing tax returns for the fourth quarter.

3. If a tax agent fails to apply the provisions of an international treaty, when paying income to a non-resident in the form of dividends on shares that are the underlying asset of depositary receipts, in accordance with the procedure, specified in paragraph 1 of this article, the tax agent is obliged to withhold income tax at source of payment at the rate established by Article 646 of this Code.

The amount of withheld income tax shall be transferred to the state budget within the time period established by subparagraph 1) of paragraph 1 of Article 647 of this Code.

4. In accordance with the provisions of an international treaty, a non-resident final (actual) recipient (owner) of income has the right to claim the refund of income tax withheld at source of payment in excess, in case income tax withheld at source of payment of income to such a non-resident was transferred to the state budget by a tax agent. Income tax withheld in excess shall be refunded to a non-resident by a tax agent.

In this case, a non-resident is obliged to submit to a tax agent:

1) a notarized copy of a document confirming the right of ownership of depositary receipts, the underlying asset of which is shares of a resident issuer;

2) a document confirming his/her/its residency for the time period, for which income in the form of dividends was assessed to such a non-resident.

The documents, specified in part two of this paragraph, shall be submitted by a non-resident within the limitation period, established by Article 48 of this Code, from the date of the last transfer of income tax withheld at source of payment to the state budget, unless an international treaty provides for other time limits.

In this case, income tax withheld in excess is refunded to a non-resident by a tax agent.

5. A tax agent has the right to submit to the tax authority at his/her/its location an additional calculation of income tax withheld at source of payment with regard to the amount of reduction, when applying a reduced tax rate for the taxable period, within which income tax on the income of a non-resident in the form dividends on shares, which are the underlying asset of depositary receipts, was withheld and transferred.

In this case, the amount of income tax withheld at source of payment in excess is credited to the tax agent in the manner prescribed by Article 102 of this Code.
Article 669. The order for application of an international treaty in respect of exemption from taxation of income of a non-resident from providing international transportation services through its permanent establishment

1. A non-resident shall have the right to apply exemption from taxation of income from the provision of international transportation services in accordance with the provisions of an international agreement if such a non-resident is the final recipient of income and a resident of the state with which the international agreement is concluded.

With regard to tax exemption, an international treaty is applied if a non-resident has a document confirming its residency as of the date of submitting a corporate income tax declaration.

A non-resident submits a document confirming its residency to the tax authority at the location of its permanent establishment, when submitting a corporate income tax declaration.

2. A non-resident is obliged to maintain separate accounting for the amounts of income from providing international transportation services and other income from sources in the Republic of Kazakhstan for a taxable period.

3. The amount of expenses related to the provision of international transportation services is determined by a non-resident using the direct or proportional method.

The method chosen for determining expenses can be changed only upon agreement with a tax authority superior to the tax authority at the location of the permanent establishment of such a non-resident (except for the authorized body), before the beginning of a taxable period.

Within one taxable period, only one method of determining expenses can be applied.

4. When applying the direct method of determining expenses, a non-resident shall maintain separate accounting for expenses related to the provision of international transportation services and other expenses.

5. When applying the proportional method, the amount of expenses is defined as the product of a share and total amount of expenses of a non-resident in connection with the performance of its activity in the Republic of Kazakhstan for a taxable period.

A share is defined as the ratio of the amount of income from providing international transportation services to the total amount of income in connection with the performance of activity in the Republic of Kazakhstan for a taxable period.

6. In case of no document confirming the residency of a non-resident, as of the date of submission of a corporate income tax declaration, a non-resident is not entitled to apply the provisions of an international treaty.

At the same time, in case of calculating and paying corporate income tax to the state budget, a non-resident has the right to apply the provisions of an international treaty within the limitation period established by Article 48 of this Code, unless other time limits are set by an international treaty, provided that an additional declaration of corporate income tax and a document confirming the residency of a non-resident are submitted to a tax authority.

Footnote. Article 669 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).



Статья 670. The order for application of an international treaty in respect of partial exemption from taxation of net income from the activity of a non-resident in the Republic of Kazakhstan through its permanent establishment

1. A non-resident shall have the right to apply a reduced tax rate on net income from activities in the Republic of Kazakhstan through a permanent establishment, provided for by an international treaty, if he is a resident of a state with which an international treaty is concluded, and such an international treaty provides for a procedure for taxing a non-resident's net income, different from the procedure established by Article 652 of this Code.

A reduced tax rate is applied if a non-resident has a document confirming its residency as of the date of submission of a corporate income tax declaration.

A non-resident submits the document confirming its residency to the tax authority at the location of its permanent establishment when submitting the corporate income tax declaration.

2. In case of no document confirming the residency of a non-resident, as of the date of submission of a corporate income tax declaration, a non-resident is not entitled to apply the provisions of an international treaty.

At the same time, in case of calculating and paying corporate income tax to the state budget, a non-resident has the right to apply the provisions of an international treaty within the limitation period established by Article 48 of this Code, unless other time limits are set by an international treaty, provided that an additional declaration of corporate income tax and a document confirming the residency of a non-resident are submitted to a tax authority.

Footnote. Article 669 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (effective from 01.01.2021).



Article 671. The order for application of an international treaty in respect of exemption from taxation of income of a non-resident individual received from persons that are not tax agents

1. A non-resident individual shall have the right to apply, in accordance with the provisions of an international treaty, exemption from taxation of income received from persons who are not tax agents, if such a non-resident individual is the final recipient of income and a resident of the state with which the international treaty is concluded.

With regard to tax exemption, the international treaty is applied if a non-resident has a document confirming his/her residency as of the date of submission of an individual income tax declaration.

A non-resident individual submits a document confirming his/her residency to the tax authority at the place of his/her stay (residence) when submitting an individual income tax declaration.

2. In case of no document confirming residency as of the date of submitting an individual income tax declaration, a non-resident individual is obliged to pay income tax to the state budget in accordance with the procedure and within the time limits established by Article 658 of this Code.

In this case, a non-resident individual has the right to claim the refund of the paid income tax from the state budget in the manner prescribed by Articles 672, 673 and 674 of this Code.

Footnote. Article 671 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).