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

Article 645. The order for calculating and withholding corporate income tax at source of payment

1. Income from sources in the Republic of Kazakhstan of a non-resident legal entity, whose activity does not result in the formation of a permanent establishment in the Republic of Kazakhstan (for the purposes of this Chapter, hereinafter referred to as the non-resident) is subject to corporate income tax at source of payment without deductions.

At the same time, the amount of corporate income tax withheld at source of payment is calculated by a tax agent by applying the rates, established by Article 646 of this Code, to the amount of income, specified in Article 644 of this Code, except for the income, specified in paragraph 9 of this article.

A tax agent calculates and withholds corporate income tax on income taxed at source of payment:

1) not later than the day of payment of income to a non-resident – with regard to assessed and paid income;

2) within the period for submission of a corporate income tax declaration established by paragraph 1 of Article 315 of this Code – with regard to assessed and unpaid income, which is allocated to deductibles.

2. A tax agent withholds corporate income tax at source of payment, regardless of the form and place of payment of income to a non-resident.

3. Income of a non-resident is taxed at source of payment regardless of whether this non-resident disposes of its income in favor of third parties and (or) its structural units in other states.

4. For the purposes of this article, an increase in value in case of sale of securities, participatory interests is determined in accordance with Article 228 of this Code.

5. The tax agent’s duty to withhold and transfer corporate income tax at source of payment shall be considered fulfilled, provided that the tax agent pays the amount of corporate income tax, calculated from the income of a non-resident in accordance with the provisions of this Code, with its own funds without withholding this tax.

6. The obligation and responsibility for calculating, withholding and transferring corporate income tax at source of payment to the state budget are imposed on the persons paying income to a non-resident and recognized as tax agents, such as:

1) an individual entrepreneur;

2) a non-resident legal entity operating in the Republic of Kazakhstan through a structural unit.

In this case, a non-resident legal entity is recognized as a tax agent from the date of its structural unit’s registration with tax authorities of the Republic of Kazakhstan;

3) a non-resident legal entity operating in the Republic of Kazakhstan through a permanent establishment without opening a structural unit.

In this case, a non-resident legal entity is recognized as a tax agent from the date of registration of its permanent establishment without opening a structural unit with tax authorities of the Republic of Kazakhstan;

4) a resident legal entity, including the issuer of the underlying asset of depositary receipts;

5) a non-resident legal entity, except for those indicated in subparagraphs 2) and 3) of this paragraph, acquiring the property, specified in subparagraph 6) of paragraph 1 of Article 644 of this Code, if the conditions established by subparagraph 8) of paragraph 9 of this article are not observed;

6) a resident individual who has paid the income specified in subparagraph 6) of part one of paragraph 1 of Article 644 of this Code to a non–resident legal entity not registered with a tax authority as a taxpayer.

At the same time, a resident individual who has paid the income specified in subparagraph 6) of part one of paragraph 1 of Article 644 of this Code, for the purpose of implementing part one of this subparagraph, is recognized as a tax agent, except in cases of transactions with securities on the stock exchange.

Calculation, withholding and transfer of corporate income tax at the source of payment to the budget from the income of a non–resident legal entity shall be carried out in accordance with the procedure established by Article 650 of this Code.

7. The payment of income shall be understood to mean the transfer of money in cash and (or) non-cash forms, transfer of securities, participatory interests, goods, property, performance of works, rendering of services, writing off and (or) offsetting debt claims to pay off arrears of income from sources in the Republic of Kazakhstan to a non-resident.

For the purposes of this Section, when taxing dividends, arising from the adjustment of taxable items in accordance with this Code and the legislation of the Republic of Kazakhstan on transfer pricing, the payment of income shall be understood as the income defined in accordance with Subparagraph 16) of Paragraph 1 of Article 1 of this Code. In this case, the date of income payment shall be March 31 of the year following the reporting taxable period.

8. If a contract concluded with a non-resident stipulates the performance of various types of works, rendering of various types of services in and outside the territory of the Republic of Kazakhstan, the procedure for calculating and withholding

income tax at source of payment, established by this article, shall apply separately to each type of works, services. Each stage of works performed, services rendered by a non-resident as part of a single engineering and manufacturing cycle shall be considered as a separate type of works, services for the purposes of calculating and withholding income tax at source of payment from the non-resident’s income.

At the same time, total amount of the non-resident’s income under the above contract shall be justifiably distributed into income received from performing works, rendering services in and outside the Republic of Kazakhstan.

For the purposes of application of the provisions of this paragraph, a non-resident is required to provide a service recipient with a copy of accounting records drawn up in accordance with the legislation of the Republic of Kazakhstan and (or) a foreign country confirming that total amount of the non-resident’s income is distributed into income received from performing works, rendering services in the Republic of Kazakhstan and that received from performing works, rendering services outside it.

In case of no such distribution or unjustifiable distribution of the non-resident’s income resulting in the understatement of the non-resident’s income amount subject to taxation in the Republic of Kazakhstan in accordance with the provisions of this article, the total amount of the non-resident’s income received under the above contract from performing works, rendering services both in and outside the Republic of Kazakhstan shall be subject to taxation.

9. Not subject to taxation:

1) are payments related to the supply of goods to the territory of the Republic of Kazakhstan as part of the foreign trade activity, except for services and works that were rendered and performed in the territory of the Republic of Kazakhstan in connection with such a supply.

If under an agreement (contract) on (for) the supply of goods, the transaction price includes expenses for rendering services, performing works in the territory of the Republic of Kazakhstan without specifying the amounts of purchased goods and (or) such expenses in the agreement (contract), the value of purchased goods is determined on the basis of the transaction price, specified in the agreement (contract), including such expenses.

If under an agreement (contract) on (for) the supply of goods, the transaction price includes expenses for rendering services, performing works in the territory of the Republic of Kazakhstan, and the amount of purchased goods is indicated separately from such expenses, the value of purchased goods is determined exclusive of such expenses;

2) is income from rendering services for opening and maintaining resident banks’ correspondent accounts and for settling them, and also from settlements using international payment cards;

3) dividends and remuneration on securities that are on the date of accrual of such dividends and remuneration in the official list of stock exchanges operating in the territory of the Republic of Kazakhstan.

In this case, the provisions of this subparagraph shall apply to dividends accrued on securities that were traded on the stock exchange during the tax period in accordance with the criteria determined by the Government of the Republic of Kazakhstan;

4) Excluded by the Law of the Republic of Kazakhstan dated 11.07.2022 No. 135-VII (shall be enforced from 01.01.2023);

5) Excluded by the Law of the Republic of Kazakhstan dated 11.07.2022 No. 135-VII (shall be enforced from 01.01.2023);




6) is interest on government-issued securities, agency bonds and income from increase in value in case of sale of government-issued securities and agency bonds;

7) is income from increase in value in case of sale through open bids at a stock exchange, operating in the territory of the Republic of Kazakhstan or a foreign stock exchange, of securities that are in the official lists of this stock exchange as of the day of sale;

8) is income from increase in value in case of sale of shares issued by a legal entity or participatory interests in a legal entity or consortium, specified in subparagraph 6) of paragraph 1 of Article 644 of this Code, except for income of persons registered in a state with preferential taxation included in the list approved by the authorized body, unless otherwise provided for by subparagraph 7) of this paragraph, provided all of the following requirements are met:

as of the day of sale of shares or participatory interests, a taxpayer has been holding these shares or participatory interests for more than three years;

an issuing legal entity or a legal entity, whose participatory interest is being sold, or a participant in such a consortium, selling a participatory interest in such a consortium, is not a subsoil user;

as of the day of such sale, the property of persons (a person) that are (is) subsoil users (a subsoil user) is not worth more than 50 percent of the value of assets of such an issuing legal entity or a legal entity, whose participatory interest is being sold, or total value of assets of participants in such a consortium, whose participatory interest is being sold.

The period of the taxpayer’s ownership of shares or participatory interests, specified in part one of this subparagraph, shall also include the periods of ownership of shares or participatory interests by their previous owners if the taxpayer received such shares or participatory interests as a result of reorganization of their previous owners.

For the purposes of this subparagraph, a subsoil user shall not be recognized as a subsoil user who is such solely because of the possession of the right to extract groundwater and (or) common minerals for his own needs, as well as a subsoil user who, during the twelve-month period preceding the first day of the month in which shares or participation interests, subsequent processing (after primary processing) of at least 70 percent of the mineral raw materials extracted during the specified period, including coal, at its own and (or) owned by a resident legal entity that is a related entity, production facilities located on the territory of the Republic of Kazakhstan.

When determining the volume of mineral raw materials, including coal, for subsequent processing, it shall include raw materials:

used in manufacturing products obtained as a result of any processing subsequent to primary processing;

used in manufacturing products of primary processing for their further use in subsequent processing.

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

9) is the amount of accumulated (accrued) interest on debt securities paid by resident buyers purchasing them;

10) is income from transfer of fixed assets into financial lease under international financial lease agreements;

11) is income from performing works, rendering services outside the Republic of Kazakhstan, except for income specified in subparagraphs 3), 4) and 5) of paragraph 1 of Article 644 of this Code;

12) are payments related to the value adjustment in connection with the quality of sale of crude oil transported out of the Republic of Kazakhstan through a single pipeline system;

13) was valid until 01.01.2020 in accordance with Law of the Republic of Kazakhstan No. 121-VI dated 25.12.2017;

14) was valid until 01.01.2020 in accordance with Law of the Republic of Kazakhstan No. 121-VI dated 25.12.2017.

Subparagraph 15) shall come into effect from 01.01.2020 to 01.01.2027 in accordance with the Law of the Republic of Kazakhstan dated 10.12.2020, No. 382-VI.




15) the amount of debt on a credit (loan) and (or) debt associated with a credit (loan), including penalties (fines, late fees), for which waiver of debt was carried out in the manner and on the conditions established by paragraph 2-1 of the Article 232 of this Code, including debt on remuneration accrued up to December 31, 2012, inclusive.

16) was effective from 01.01.2020 to 01.01.2021 in accordance with the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI.

Footnote. Article 645 as amended by the Law of the Republic of Kazakhstan dated 26.12.2018 No. 203-VI (shall be enforced from 01.01.2019); dated 02.04.2019 No. 241-VI (shall be enforced from 01.01.2018); dated December 10, 2020, No. 382-VI (for the procedure of enacting refer to Article 2); dated 11.07.2022 No.135-VII (shall be enforced from 01.01.2023); dated 12.21.2022 No. 165-VII (effective after sixty calendar days after the date of its first official publication).