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

Article 288. Reduction of taxable income

1. A taxpayer has the right to reduce taxable income with regard to the following types of expenses:

1) taxpayers who were monitored as large taxpayers in a taxable period – to the extent of total amount not exceeding 3 percent of taxable income:

the amount of excess of actually incurred expenses over income (to be) received from the operation of social facilities provided for by Article 239 of this Code;

the value of property transferred free of charge, the recipient of which is:

a non-commercial organization;

an organization carrying out activity in the social sphere;

charitable assistance given a taxpayer’s decision based on an application from a recipient of assistance.

The provisions of this subparagraph shall also apply to taxable income from contract activity of a subsoil user;

2) taxpayers, except for taxpayers specified in subparagraph 1) of this paragraph - to the extent of total amount not exceeding 4 percent of taxable income:

the amount of excess of actually incurred expenses over income (to be) received from the operation of social facilities provided for in Article 239 of this Code;

the value of property transferred free of charge, the recipient of which is:

a non-commercial organization;

an organization carrying out activity in the social sphere;

charitable assistance given a taxpayer’s decision based on an application from a recipient of assistance.

The provisions of this subparagraph shall also apply to taxable income from contract activity of a subsoil user;

3) twice the amount of incurred expenses for disabled people’s salaries and 50 percent of the amount of calculated social tax from wages and other payments to disabled people;

3-1) social entrepreneurship entities included in the register of social entrepreneurship entities - in the size of expenses incurred for training in a profession, vocational training, retraining or advanced training of employees who are disabled; parents and other legal representatives raising a disabled child; pensioners and citizens of pre-retirement age (within five years before the age entitling for pension payments by age); pupils of children's villages and graduates of orphanages, boarding schools for orphans and children left without parental care, under the age of twenty-nine; by persons released from penitentiary (penal) institutions after the served sentence, within twelve months after their release; kandases, but not more than 120 times the monthly calculation index established by the law on the republican budget and effective as of January 1 of the corresponding financial year, per employee for the tax period.

At the change of an employee’s status, provided for in part one of this subparagraph, the reduction in the amount of taxable income shall be based on the proportion of months in the tax period when the employee was disabled; a parent and other legal representative raising a disabled child; a pensioner and a citizen of pre-retirement age (within five years before reaching the age entitling to pension payments by age); a pupil of children's villages and a graduate of orphanages, boarding schools for orphans and children left without parental care, under the age of twenty-nine; by a person released from penitentiary (penal) institutions after the served sentence, within twelve months after the release; kandases.

When applying a reduction in taxable income in a tax period to an employee in subsequent tax periods, such reduction is not applied;

3-2) the costs of acquiring from a non-resident, by a related entity of management, advisory, consulting, auditing, designing, legal, accounting, lawyer, advertising, marketing, franchising, financial (excluding remuneration costs), engineering, agency services, royalties, rights to use intellectual property objects, in the size of a total amount not exceeding 3 percent of taxable income.

For the purposes of this subparagraph, related entities are interconnected parties recognized as such in accordance with subparagraph 23) of Article 264 of this Code;

4) expenses for the training of an individual having no labor relations with a taxpayer given an agreement concluded with the individual on the latter’s obligation to work for the taxpayer for at least three years.

For the purposes of this subparagraph, the costs of training include:

actually incurred training expenses;

actually incurred living expenses within the limits established by the authorized body;

expenses for the payment of the amount of money fixed by the taxpayer for a trainee, but not exceeding the limits established by the authorized body;

actually incurred expenses for travel to the place of study in case of admission and back after graduation;

actually incurred expenses for insurance in case of illness of the student during the temporary stay outside the Republic of Kazakhstan in the period of study.

The provisions of this subparagraph do not apply in case of:

non-conclusion of an employment agreement with an individual, to whose training expenses the provisions of this subparagraph were applied, within three months from the day of his/her graduation, except for the case of the individual’s compensation for training expenses, in whole or in part, during a period of time that includes the taxable period in which the individual graduated and also a subsequent taxable period. In case of such compensation, the provisions of this subparagraph do not apply to the extent of training expenses not reimbursed by the individual;

termination of an employment agreement with an individual, to whose training expenses the provisions of this subparagraph were applied, before expiration of a three-year period from the date of concluding the employment agreement with such a person, except for the case of the individual’s compensation for training expenses, in whole or in part, during a period of time that includes the taxable period in which the employment agreement was terminated and also a subsequent taxable period. In case of such compensation, the provisions of this subparagraph do not apply to the extent of training expenses not reimbursed by an individual;

subsoil user’s application of the provisions of Article 261 of this Code to such training expenses;

5) the value of property transferred free of charge, the recipient of which is an autonomous educational organization provided for in paragraph 1 of Article 291 of this Code;

6) was valid until 01.01.2023 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI;




7) acquisition or construction of industrial buildings and structures that meet the requirements of paragraph 4 of Article 274 of this Code.

The provisions of this subparagraph shall be applied by a small business entity in accordance with the Entrepreneur Code of the Republic of Kazakhstan, operating in the manufacturing industry, applying the generally established taxation procedure, in an amount not exceeding the amount of taxable income for the reporting tax period.

The assets provided for by part one of this subparagraph are not recognized as fixed assets in accordance with paragraph 3 of section 7 of this Code and are not preference items for the purposes of applying paragraph 4 of section 7 of this Code.

For the purposes of this paragraph, the value of property transferred free of charge is determined:

in the amount of money transferred - when transferring money;

in the amount of expenses incurred to perform such works, render such services - when performing works, rendering services;

in the amount of the book value of the transferred property specified in the certificate of transfer of the said property – with regard to other property.

2. A taxpayer has the right to reduce the following types of taxable income:

1) remuneration under a lease agreement, except for forfeits (fines, penalties);

2) interest on debt securities that, as of the date of such interest’s accrual, are in the official list of a stock exchange operating in the territory of the Republic of Kazakhstan;

3) remuneration for government-issued securities, agency bonds;

4) income from increase in value in case of sale of government-issued securities, reduced by losses from the sale of government-issued securities;

5) income from increase in value in case of sale of agency bonds, reduced by losses incurred from the sale of agency bonds;

6) the value of property received in the form of humanitarian assistance in the event of natural and man-made emergencies and used for its intended purpose;

7) the value of fixed assets received by a state-owned enterprise on a non-repayable basis from a state body or a state-owned enterprise on the basis of a decision of the Government of the Republic of Kazakhstan;

The amendment made to the first paragraph of subparagraph 8) shall be valid until 01.01.2029 in accordance with Law of the Republic of Kazakhstan No. 203-VI dated 26.12.2018.




8) capital gains in the sale of shares issued by a resident legal entity or participatory interest in a resident legal entity or a consortium established in the Republic of Kazakhstan, reduced by losses incurred from the sale of shares issued by a resident legal entity or participatory interest in a resident legal entity or a consortium established in the Republic of Kazakhstan, unless otherwise provided by subparagraphs 9) and 11) of this paragraph, while the following conditions shall be met:

on the day the shares or participation interests are sold, the taxpayer has owned these shares or participation interests for more than three years;

such a legal entity-issuer or such a legal entity, the share of participation in which is being sold, or a member of such a consortium that sells a share of participation in such a consortium, is not a subsoil user;

property of persons (person) who are (are) subsoil users (subsoil user), in the value of the assets of such a legal entity-issuer or such legal entity, the participation interest in which is being sold, or the total value of the assets of the participants of such consortium, the participation interest in which is being sold, as of the day such implementation is no more than 50 percent.

The term specified in this subparagraph by the taxpayer of shares or participatory interests shall be determined cumulatively, taking into account the terms of holding the shares or participatory interests by the previous owners, if such shares or participatory interests were received by the taxpayer as a result of the reorganization of the previous owners.

For the purposes of this sub-paragraph, a subsoil user is not recognized as a subsoil user who is such solely because of the possession of the right to extract groundwater and (or) widespread minerals for their own needs, as well as a subsoil user exercising during the twelve month period preceding the first day of the month in which shares or participatory interest, subsequent processing (after primary processing) of at least 50 percent of the mineral raw materials mined for the specified period, including coal, at its own and (or) owned by a resident legal entity that is a related party, production facilities located in the Republic of Kazakhstan ...

When determining the volume of mineral raw materials, including coal, sent for further processing, raw materials are taken into account:

aimed directly at the production of products obtained as a result of any processing following the primary processing;

used in the manufacture of primary processing products for the purpose of their further use in subsequent processing.

In this case, the share of the property of persons (person) who are (are) subsoil users ( subsoil users ) in the value of the assets of a legal entity or consortium, whose shares or participation interests are being sold, is determined in accordance with Article 650 of this Code;

9) income from increase in value in case of sale through open bids at a stock exchange in the territory of the Republic of Kazakhstan of securities, which are in the official lists of this stock exchange as of the day of sale, reduced by losses arising from the sale through open bids at the stock exchange in the territory of the Republic of Kazakhstan of securities, which are in the official lists of this stock exchange as of the day of sale;

Subparagraph 10) is in effect until 01.01.2027 in accordance with Law of the Republic of Kazakhstan № 121-VI as of 25.12.2017.




10) remuneration under a bank deposit contract received by a sustainability organization, whose 100 percent of voting shares belong to the National Bank of the Republic of Kazakhstan, within the Mortgage (Home Loan) Refinancing Program, transferred by an organization for improving the quality of second-tier loan portfolios, the sole shareholder of which is the Government of the Republic of Kazakhstan.

Subparagraph 11) 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.




11) income from increase in value in sale of shares issued by legal entities specified in Subparagraph 6) of Paragraph 1 of Article 293 of this Code, participatory interests in legal entities specified in Subparagraph 6) of Paragraph 1 of Article 293 of this Code, reduced by losses incurred from the sale of shares issued by legal entities specified in Subparagraph 6) of Paragraph 1 of Article 293 of this Code, participatory interests in legal entities specified in Subparagraph 6) of Paragraph 1 of Article 293 of this Code.

Footnote. Article 288 as amended by the Law of the Republic of Kazakhstan dated 20.06.2018 No. 161-VI (shall be enforced upon expiry of ten calendar days after its first official publication; dated 26.12.2018 No. 203-VI (shall be enforced from 01.01.2019); dated December 10, 2020 No. 382-VI (enforcement, Article 2); dated 24.06. 2021 No. 53-VII (effective from 01.01.2022); dated 11.07.2022 No. 135-VII (shall be enforced from 01.01.2023);