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

Article 655. The order for calculating, withholding and transferring an individual income tax on income subject to taxation at source of payment

1. Income of a non-resident individual from sources in the Republic of Kazakhstan, except for income specified in paragraph 1 of Article 656 of this Code, is subject to individual income tax at source of payment at the rates, specified in Article 646 of this Code, without tax deductions, unless otherwise established by this article.

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

2. Notwithstanding the provisions of this article, the calculation, withholding and transfer of individual income tax at source of payment to the budget on the income of a non-resident individual, specified in paragraph 1 of Article 650 of this Code, shall be made in the manner specified in Article 650 of this Code.

3. A tax agent calculates individual income tax on income subject to taxation at source of payment with account of the provisions of paragraph 2 of Article 319 of this Code without tax deductions by applying the rate, set in paragraph 1 of Article 320 of this Code, to the amount of the following types of income of a non-resident individual, including the income defined in paragraph 1 of Article 322 of this Code, such as:

that from activity in the Republic of Kazakhstan under an employment agreement (contract)concluded with a resident or non-resident that are employers;

that from activity in the Republic of Kazakhstan in the form of material benefits received from an employer;

director’s fees and (or) other payments to members of the management body (the board of directors or other body) received by these persons in connection with the performance of managerial duties imposed on them with respect to a resident, regardless of the place of actual performance of such duties;

allowances paid to him/her in connection with residing in the Republic of Kazakhstan by a resident or non-resident who are employers;

insurance payments to non-resident individuals under a pension annuity agreement;

pension payments made by a resident accumulation pension fund.

4. A tax agent calculates and withholds individual income tax on income subject to taxation at source of payment not later than the day of payment of income to a non-resident individual, except for the case specified in paragraph 7 of this article.

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

5. The transfer of individual income tax from the income of a non-resident individual subject to taxation at the source of payment to the budget shall be made by the tax agent at the location no later than the 25th day of the month following the month in which the tax is subject to withholding.

6. When paying income in foreign currency, the amount of income taxed at source of payment shall be recalculated in tenge using the market exchange rate set on the last business day preceding the date of income payment.

7. In case of provision of foreign employees by a non-resident whose activity does not result in the formation a permanent establishment in the Republic of Kazakhstan in accordance with the provisions of paragraph 7 of Article 220 of this Code, the income of such employees from their activity in the Republic of Kazakhstan is subject to individual income tax at source of payment.

In this case, an item subject to individual income tax is the income of a non-resident individual, including other material benefits received by such a person in connection with his/her activity in the Republic of Kazakhstan.

If such employees receive income from a non-resident, the tax base, for the purposes of calculating the individual income tax, is determined by the tax agent on the basis of documents submitted by a non-resident in accordance with paragraph 7 of Article 220 of this Code.

Individual income tax at source of payment from the income of foreign employees shall be withheld by a tax agent when paying income to a non-resident legal entity from services for providing foreign employees.

A tax agent calculates individual income tax withheld at source of payment by applying the rate, set in paragraph 1 of Article 320 of this Code, to the amount of income of foreign employees, determined in accordance with this paragraph, with account of the provisions of paragraph 2 of Article 319 of this Code, without tax deductions.

A tax agent is obliged to transfer the amounts of the individual income tax withheld at source of payment at the place of its location prior to the 25^th day of a month following the month, in which the tax shall be withheld.

8. The following persons, who pay income to a non-resident and are recognized as tax agents, are responsible for calculating, withholding and transferring individual income tax at source of payment to the budget:

1) an individual entrepreneur;

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

For the purposes of this Chapter, by its decision, a resident legal entity has the right to recognize its structural unit as a tax agent for individual income tax withheld at source of payment with regard to income taxable at source of payment, which is (to be) paid by such a structural unit in the manner specified in Article 353 of this Code;

5) a legal entity, including a non-resident one, operating in the Republic of Kazakhstan through a permanent establishment, to which foreign employees were provided by a non-resident, whose activity does not result in the formation of a permanent establishment in accordance with the provisions of paragraph 7 of Article 220 of this Code;

6) a non-resident legal entity acquiring property, specified in subparagraph 5) of part one of paragraph 1 of Article 650 of this Code, in case of failure to observe the conditions established by subparagraph 7) of Article 654 of this Code.

9. A tax agent is considered to have performed its duty to withhold and transfer individual income tax at source of payment, after the amount of individual income tax calculated from the non-resident individual’s income in accordance with the provisions of this Code was paid by it with its own funds without withholding the tax.

Footnote. Article 655 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 656. The order of taxation of income of foreigners and stateless persons sent to the Republic of Kazakhstan by a non-resident legal entity not registered as a taxpayer of the Republic of Kazakhstan

Footnote. The title of Article 656 as amended by Law of the Republic of Kazakhstan No. 272-VI dated 25.11.2019 (shall be enforced since 01.01.2018).

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 not registered as a taxpayer of the Republic of Kazakhstan, including income, determined by Article 322 of this Code, received (to be received):

from activities in the Republic of Kazakhstan under an employment contract (agreement, contract) concluded with such a non-resident legal entity that is an employer;

from activities in the Republic of Kazakhstan under an agreement (contract) of a civil nature concluded with such a non-resident legal entity;

from activities in the Republic of Kazakhstan in the form of material benefits received from a person who is not an employer;

allowances paid in connection with the residence in the Republic of Kazakhstan by such a non-resident legal entity.

For the purposes of this article, a non-resident legal entity not registered as a taxpayer of the Republic of Kazakhstan shall also be recognized as a non-resident legal entity registered as a taxpayer of the Republic of Kazakhstan in connection with the opening of a current account in resident banks and (or) in connection with the occurrence of obligations in accordance with article 650 of this Code.

The provisions of this article shall apply to the income of a foreigner or stateless person referred to in this article, sent to the Republic of Kazakhstan, unless otherwise established by paragraph 7 of Article 655 of this Code, provided that the following conditions are met:

1) a foreigner or stateless person is an employee and (or) a contractor (subcontractor) of a non-resident legal entity that is not registered as a taxpayer of the Republic of Kazakhstan, or an employee of a contractor (subcontractor) of the specified non-resident legal entity;

2) a foreigner or stateless person is recognized as permanently residing in the Republic of Kazakhstan in accordance with paragraph 2 of Article 217 of this Code.

In this case, if a foreigner or stateless person is not recognized as permanently residing in the Republic of Kazakhstan in accordance with paragraph 2 of Article 217 of this Code, then income from activities in the Republic of Kazakhstan in the form of material benefits received from a person who is not an employer shall be subject to taxation according to the rate established by Article 646 of this Code.

2. The obligation and responsibility for calculating, withholding and transferring individual income tax at source of payment to the budget from the income of a foreigner or a stateless person specified in paragraph 1 of this article are imposed on a person (including a non-resident operating through a permanent establishment) for whom works are performed, services are rendered by a non-resident legal entity. Such a person is recognized as a tax agent.

3. The calculation of individual income tax shall be made by a tax agent from the income of a foreigner or stateless person specified in a document submitted by a non-resident in accordance with this paragraph, without tax deductions at the rate established by Article 320 of this Code. In this case, a non-resident legal entity shall be obliged to submit to the tax agent:

notarized copies of an individual labor agreement (contract) and (or) a civil law agreement concluded with a foreigner or stateless person sent to the Republic of Kazakhstan;

another document containing information about the income of an individual received from employment under an employment contract and (or) a civil law contract concluded with such a non-resident.

If the tax agent fails to submit the documents specified in this paragraph, individual income tax at the source of payment shall be subject to income in the amount of 80 percent of the amount of income payable to a non-resident legal entity for work performed, services rendered, which is distributed in equal shares to all foreigners and stateless persons.

In this case, the income specified in this paragraph shall be reduced by the amount:

the income specified in the documents specified in this paragraph, if submitted;

income from activities in the Republic of Kazakhstan in the form of material benefits received from a person who is not an employer, if such income is provided for by the terms of an agreement (contract, agreement).

4. A tax agent calculates and withholds individual income tax at source of payment not later than the day of payment of income to a non-resident legal entity regardless of the form and place of income payment.

5. A tax agent transfers individual income tax on the income of a foreigner or stateless person to the budget at the place of its location prior to the 25th day of a month following the month, in which the tax is to be withheld in accordance with paragraph 4 of this article.

6. When paying income in foreign currency, the amount of income taxable at the source of payment shall be recalculated in tenge using the market exchange rate determined on the last business day preceding the date of income payment.

Footnote. Article 656 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 No. 241-VI (shall be enforced from 01.01.2018); No. 272-VI dated November 25, 2019 (see Art. 3 for the enactment procedure); dated 10.12.2020 No. 382-VI (shall come into effect from 01.01.2018).