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

Article 708. General provisions

1. For the purposes of application of this Code, an organization operating in the territory of a special economic zone is a legal entity meeting all of the following requirements:

1) is a participant of a special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economicand industrial zones;

2) it is registered as a taxpayer at its location with a tax authority in the territory of a special economic zone or with a territorial subdivision of a tax authority in charge of the territory of the special economic zone;

3) if there is necessary infrastructure and facilities for carrying out priority activities in the territory of a special economic zone, a legal entity may not have branches and other separate structural units outside the special economic zone, except for representative offices;

4) it carries out a priority activity, which meets the purpose of creation of a special economic zone, in the territory of the special economic zone.

The list of priority activities in the context of special economic zones corresponding to the goals of creating a special economic zone, and the rules for its formation shall be determined by the Government of the Republic of Kazakhstan.

Priority activities are defined in keeping with the general classifier of economic activities, approved by the authorized state body for state technical regulation.

The provisions of this paragraph shall not apply to the persons indicated in paragraphs 2 and 3 of this article.

2. For the purposes of application of this Code, an organization operating in the territory of a special economic zone shall also mean a legal entity meeting all of the following requirements:

1) is a participant of the “Park of Innovative Technologies” special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones;

2) it is registered as a taxpayer at its location;

3) it has no branches and other separate structural units,

except for representative offices;

4) it carries out a priority activity that meets the purpose of creation of the “Park of Innovative Technologies” special economic zone.

For the purpose of applying the provisions of part one of this paragraph, the Government of the Republic of Kazakhstan shall establish a separate list of priority activities corresponding to the goals of creating a special economic zone "Park of innovative technologies", the implementation of which is possible outside the territory of the specified special economic zone.

3. For the purposes of application of this Code, an organization or an individual entrepreneur operating in the territory of a special economic zone shall mean a person meeting all of the following requirements:

1) is a participant of a special economic zone, the limits of which fully or partially coincide with sections of the customs border of the Eurasian Economic Union, in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones;

2) it is registered as a taxpayer at its location with the tax authority in the territory of a special economic zone, the limits of which fully or partially coincide with sections of the customs border of the Eurasian Economic Union or with a territorial subdivision of a tax authority in charge of the territory of the territory of a special economic zone, the limits of which fully or partially coincide with sections of the customs border of the Eurasian Economic Union;

3) it has no branches and other separate structural units, except for representative offices;

4) in the territory of the special economic zone, it carries out a priority activity meeting the purpose of creation of a special economic zone, the limits of which fully or partially coincide with sections of the customs border of the Eurasian Economic Union.

The list of priority activities corresponding to the goals of creating a special economic zone, the limits of which fully or partially coincide with sections of the customs border of the Eurasian Economic Union, shall be determined by the Government of the Republic of Kazakhstan.

4. Organizations and individual entrepreneurs operating in the territories of special economic zones do not include:

1) subsoil users;

2) organizations producing excisable goods, except for organizations engaged in the production, assembly (completion of a set) of excisable goods specified in subparagraph 6) of Article 462 of this Code;

3) organizations and individual entrepreneurs applying special tax regimes;

4) organizations applying investment tax preferences - under incomplete contracts concluded with the authorized state body for investments before January 1, 2009;

5) organizations carrying out (that carried out) a priority investment project or a strategic investment project in accordance with the legislation of the Republic of Kazakhstan on investments;

6) organizations engaged in the gambling business.

At the same time, in relation to a special economic zone, the limits of which fully or partially coincide with the sections of the customs border of the Eurasian Economic Union, foreign individuals and legal entities also shall not belong to the applicants.

If an investment agreement is concluded with an organization operating in the territory of a special economic zone in accordance with the Entrepreneurial Code of the Republic of Kazakhstan, such a taxpayer shall be recognized to apply the provisions of this Code as a person who has entered into an investment agreement and applies the provisions of Chapter 80-1 of this Code.

5. The imposition of VAT on goods sold to the territory of a special economic zone, as well as the procedure for the refund of excess VAT on zero-rated turnovers, shall be conducted in the manner prescribed by this Code, with account of the features provided for in this Section and Articles 389 and 391 of this Code.

6. In case of amendments and additions to the tax legislation of the Republic of Kazakhstan made after the date of conclusion of an agreement on the performance of activity as a participant of a special economic zone, such an organization or an individual entrepreneur shall apply the provisions of this Chapter effective as of the date of conclusion of such an agreement if such amendments and additions provide for the exclusion and (or) the change in the amount of reduction used in the calculation of corporate income tax, individual income tax, land tax, property tax and fee for the use of land plots.

The provisions of part one of this Paragraph shall be applied within the term of the agreement on the performance of activity as a participant of a special economic zone, concluded in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones, but in any event within ten years at most of the date of the first introduction of such an amendment and (or) addition.

The provisions of part one of this Paragraph shall not apply in case of unilateral termination of an agreement on the performance of activity as a participant of a special economic zone by the management authority of a special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones in the Republic of Kazakhstan.

Footnote. Article 708 as amended by the Law of the Republic of Kazakhstan dated 03.04.2019 No. 243-VI (shall be enforced upon expiry of ten calendar days after its first official publication); 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 709. Taxation of organizations and individual entrepreneurs carrying out the Activity in the territory of a special economic zone, and management companies of special economic and industrial zones

Footnote. Heading of Article as amended by the Law of the Republic of Kazakhstandated 03.04.2019 No. 243-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

1. When determining the amount of land tax, property tax and fee for the use of land plots to be paid to the budget, an organization or an individual entrepreneur operating in the territory of a special economic zone reduces the amount of the calculated tax and (or) the fee by 100 percent with regard to taxable items (items subject to the fee) located in the territory of a special economic zone and used in the implementation of priority activities.

For the purposes of this Chapter, the reduction provided for in part one of this paragraph is a tax- or fee-related preference.

Tax- or fee-related preferences apply:

from the 1^st day of the month, in which an agreement on the performance of activity as a participant of a special economic zone was concluded – with regard to the land tax;

from the date of emergence of a taxable item, but not earlier than the date of conclusion of an agreement on the performance of activity as a participant of a special economic zone – with regard to the property tax;

from the first day of the month, in which an agreement on the performance of activity as a participant of a special economic zone was concluded, until expiration of the term of an agreement on temporary land use for a fee (lease), but not longer than the lifespan of a special economic zone – with regard to the fee for the use of land plots.

2. If taxable items (an item subject to the fee) located in the territory of a special economic zone are (is) used both for carrying out priority activities and other activities, the amount of the tax or the fee, to which the provisions of part one of paragraph 1 of this article apply, shall be determined in proportion to the share of income from priority activities to total annual income.

3. In case of unilateral termination of a contract on performance of activity as a participant of a special economic zone by the management company of a special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones, preferences on taxes and fees shall be canceled from the date of the start of the taxable period in which there is a violation, which is the reason for termination of the contract.

The management company of a special economic zone not later than thirty calendar days from the date of termination of the contract shall provide information on the participants of the special economic zone with which the contract shall be terminated, indicating the date of the violation that was the reason for termination of the contract to the tax authorities at the location of such participants.

In this case, a taxpayer shall be obliged, within thirty calendar days of the date of the contract’s termination, to file additional tax reporting for taxable periods, in which there was a violation that was the reason for the termination of the contract.

4. An organization operating in the territory of the special economic zone, when determining the amount of corporate income tax payable to the budget, shall reduce the amount of corporate income tax calculated in accordance with Article 302 of this Code by 100 percent on the income received from the sale of goods, works, services resulting from the implementation of priority activities, unless otherwise provided by this paragraph.

In this case, the provision of part one of this Paragraph shall not apply to income from the sale of the following construction projects, unless this sale is included in the list of priority activities in the territory of the special economic zone, the limits of which fully or partially coincide with the customs border sections of the Eurasian Economic Union:

hospitals, polyclinics, schools, kindergartens, museums, theaters, higher and secondary educational institutions, libraries, schoolchildren’s palaces, sports complexes in accordance with design estimates;

infrastructure, administrative and residential complexes in accordance with the design and estimate documentation.

The procedure for determining the income from intellectual property objects and provision of services in informatization, to which a 100 percent reduction in the amount of calculated corporate income tax is applied, shall be determined by the authorized body in agreement with the authorized body in informatization area.

5. An individual entrepreneur operating in the territory of a special economic zone, the limits of which fully or partially coincide with the sections of the customs border of the Eurasian Economic Union, when determining the amount of individual income tax payable to the budget, reduces the amount of the calculated individual income tax by 100 percent. The provision of this Paragraph applies to individual entrepreneurs operating in the generally established manner.

6. An organization or an individual entrepreneur operating in the territory of a special economic zone shall maintain separate tax accounting for taxable and (or) tax-related items in order to calculate tax obligations for a relevant priority activity and other activities.

7. Income of an organization or an individual entrepreneur, operating in the territory of a special economic zone, from the performance of other types of activities that are not priority ones shall be subject to corporate income tax or personal income tax in accordance with the generally established procedure.

8. An organization operating in the territory of a special economic zone is not entitled to apply other provisions of this Code allowing for 100-percent reduction of corporate income tax calculated in accordance with Article 302 of this Code.

9. An organization operating in the territory of the “Park of Innovative Technologies” special economic zone reduces by 100 percent the amount of the calculated social tax, payable to the state budget, on the employer’s expenses paid in the form of income to employees engaged in the implementation of priority activities, provided that such expenses for a taxable period are not less than 70 percent of the total amount of expenses of such an organization according to accounting records. The expenses specified in this paragraph are determined in accordance with the legislation of the Republic of Kazakhstan on accounting and financial reporting.

The term for applying this Paragraph begins on the 1 day of the month in which the legal entity entered into an agreement on the activity as a participant in the special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones.

10. Management companies of special economic and industrial zones when determining the amount of land tax, property tax and fees for using land plots to be paid to the budget for taxable items (to taxable items) used (planned for use) for servicing special economic and industrial zones shall reduce the amount of calculated tax and fees by 100 percent.

Footnote. Article 709 as amended by the Law of the Republic of Kazakhstan dated 03.04.2019 No. 243-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 20.12.2021 No. 85-VII (shall be enforced from 01.01.2023).