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

Article 681. The procedure for determining income when applying special tax regimes based on a patent, a simplified declaration or using a special mobile application

Footnote. Heading of Article 681 as amended by the Law of the Republic of Kazakhstan dated 24.06. 2021 No. 53-VII (shall come into effect from 01.01.2022).

1. The object of taxation for a taxpayer applying a special tax regime based on a patent, a simplified declaration or using a special mobile application shall be the income received during the tax period.

2. Income, determined for the purposes of paragraph 1 of this article, consists of the following types of income (to be) received in and outside the Republic of Kazakhstan (subject to adjustments in accordance with paragraph 6 of this article):

1) income from the sale of goods, performance of works, rendering of services, including royalties, income from property lease (rent);

2) income from writing off obligations;

3) income from assigning the right to claim;

4) income from joint activity;

5) fines, penalties and other types of sanctions awarded or recognized by the debtor (except for unjustifiably withheld fines that were returned from the budget, provided that these amounts have not been earlier allocated to deductibles within the period of the taxpayer’s settlements with the budget in accordance with the established procedure);

6) amounts received from the state budget to cover costs;

7) surplus material valuables discovered in the course of inventory taking;

8) income in the form of property received free of charge (except for charitable assistance) to be used for business purposes;

9) the lessee’s reimbursement of expenses for maintenance and repair of the leased property incurred by an individual entrepreneur that is the lessor;

10) the lessee’s expenses for maintenance and repair of the property leased from an individual entrepreneur, applied against the rent under a lease agreement.

3. When applying a special tax regime for small business entities, the amount of income, specified in paragraph 2 of this article, is determined by:

1) a legal entity - in accordance with the generally established procedure in accordance with Section 7 of this Code and paragraphs 5, 6, 7 and 8 of this article;

2) an individual entrepreneur not obliged to maintain accounting records and prepare financial statements in accordance with the Law of the Republic of Kazakhstan “On Accounting and Financial Reporting” (hereinafter referred to as maintenance of accounting records and preparation of financial statements) - in accordance with Chapter 24 of this Code and paragraphs 5, 6, 7 and 8 of this article;

3) an individual entrepreneur maintaining accounting records and preparing financial statements - in accordance with Articles 226-240 of this Code and paragraphs 5, 6, 7 and 8 of this article.

4. When taxpayers, applying a special tax regime for small business entities, receive income, not specified in paragraph 2 of this article, they shall calculate, pay relevant taxes and file tax returns thereon under the generally established procedure in accordance with this Code.

5. For tax purposes, the below shall not be considered as income of a taxpayer applying a special tax regime for small business entities:

1) the value of property transferred free of charge - for a taxpayer transferring such property;

2) the sale of assets redeemed for state needs in accordance with the laws of the Republic of Kazakhstan;

3) the value of goods received by an individual entrepreneur free of charge for advertising purposes (also in the form of a gift), if the unit value of such goods does not exceed 5 times the monthly calculation index established for a relevant financial year by the law on the national budget and effective as of the date of such transfer;

4) the following expenses incurred by an individual lessee that is not an individual entrepreneur in case of property lease (rent) of a dwelling, a residential unit (apartment) - if these expenses are not included in the rent for:

the maintenance of common property of a condominium unit in accordance with the housing legislation of the Republic of Kazakhstan;

the payment of utility services provided for by the Law of the Republic of Kazakhstan “On Housing Relations”;

the repair of a dwelling, a residential unit (apartment);

5) the amount of a penalty and fines written off in accordance with the tax legislation of the Republic of Kazakhstan.

6) was valid until 01.01.2023 in accordance with the Law of the Republic of Kazakhstan dated 11.07.2022 No. 135-VII.

6. For the purposes of this Chapter, an adjustment is an increase in the amount of income for a reporting taxable period or reduction in the amount of income for a reporting taxable period within the amount of earlier recognized income.

The income specified in paragraph 2 of this article is subject to adjustment in such cases as:

1) full or partial return of goods;

2) modification of the terms of a transaction;

3) changes in the price of, compensation for goods sold or purchased, works performed, services rendered;

4) price discounts, sales discounts;

5) changes in the amount payable in national currency for goods sold or purchased, works performed, services rendered, based on the terms of a contract;

6) cancellation of a claim to a legal entity, an individual entrepreneur, a non-resident legal entity operating in the Republic of Kazakhstan through its permanent establishment, with regard to claims related to the activity of such a permanent establishment, as well as to a branch, representative office of a non-resident legal entity operating in the Republic Kazakhstan through a branch, representative office without formation of a permanent establishment.

The income adjustment provided for in this subparagraph shall be downward in case of:

a failure to claim by a taxpayer-creditor in case of liquidation of a taxpayer-debtor as of the day of approval of its liquidation balance;

the taxpayer’s cancellation of a claim pursuant to a final and binding court judgment.

The adjustment provided for in this subparagraph shall be made within the amount of the cancelled claim and earlier recognized income from such a claim, given source documents confirming the emergence of the claim.

The adjustment provided for in subparagraphs 1) - 5) of part two of this paragraph shall be made given source documents confirming the occurrence of cases for such an adjustment.

The income adjustment is made within the taxable period, in which the cases, specified in this article, occurred.

In case of no income or insufficiency of its size for making downward adjustments within the period, in which the cases specified in this article occurred, the adjustment is made within the taxable period, in which the income subject to adjustment was earlier recognized.

7. If one and the same income can be stated in several income items, this income is included in income only once.

The date of income recognition for tax purposes is determined in accordance with the provisions of this Chapter.

8. Unless otherwise provided by paragraph 5 of this Article, an individual entrepreneur applying a special tax regime based on a patent, a simplified declaration or using a special mobile application shall determine the amount:

1) property income - in accordance with Articles 330, 331, 332, 333 and 334 of this Code;

2) income specified in paragraph 2 of this article:

in accordance with paragraphs 5, 6 and 7 of this article and Article 682 of this Code - by an individual entrepreneur not obliged to maintain accounting records and prepare financial statements in accordance with the Law of the Republic of Kazakhstan “On Accounting and Financial Reporting”;

in accordance with paragraphs 5, 6 and 7 of this article and Articles 226-240 of this Code - by an individual entrepreneur maintaining accounting records and preparing financial statements in accordance with the Law of the Republic of Kazakhstan “On Accounting and Financial Reporting”;

3) other income of an individual that are not specified in subparagraphs 1) and 2) of part one of this paragraph - in accordance with Section 8 of this Code.

In this case, relevant taxes are calculated and paid, and tax returns thereon are filed:

1) with regard to income indicated in subparagraphs 1) and 3) of part one of this paragraph - in accordance with Section 8 of this Code;

2) with regard to income indicated in subparagraph 2) of part one of this paragraph by:

an individual entrepreneur applying a special tax regime based on a patent or using a special mobile application - in accordance with paragraphs 2 and 2-1 of this chapter;

an individual entrepreneur applying a special tax regime on the basis of the simplified declaration - in accordance with Clause 3 of this Chapter.

Footnote. Article 681 as amended by the Law of the Republic of Kazakhstan dated 24.06.2021 No. 53-VII (shall come into effect from 01.01.2022); dated 11.07.2022 No.135-VII (enforcement see Article 3).



Article 682. Features of income recognition in tax accounting by individual entrepreneurs not obliged to maintain accounting records and prepare financial statements in accordance with the Law of the Republic of Kazakhstan “On Accounting and Financial Reporting”

1. The provisions of this article shall be applied by individual entrepreneurs not obliged to maintain accounting records and prepare financial statements in accordance with the Law of the Republic of Kazakhstan “On Accounting and Financial Reporting”.

2. Unless otherwise established by this article, income is measured by the value of compensation received or receivable, with account of the amount of any sales and wholesale discounts provided by an individual entrepreneur. The amount of income arising from a transaction is also determined on the basis of a completed contract between an individual entrepreneur and a buyer or user of an asset.

3. Income from the sale of goods is recognized, provided all of the following requirements are met:

1) an individual entrepreneur transferred substantial risks and rewards, related to the right of ownership of the goods, to a buyer;

2) an individual entrepreneur is no longer a participant in management to the extent that it is usually associated with the ownership right and has no control over the goods sold;

3) the amount of income can be reliably measured;

4) economic benefits associated with a transaction are likely to be received by an individual entrepreneur;

5) costs incurred or estimated, which are associated with a transaction, can be reliably measured.

4. Income from the performance of works, rendering of services is recognized on the basis of a certificate of works performed, services rendered or another document confirming the performance of works, rendering of services. Income from the performance of works, rendering of services is recognized in the period, in which the certificate of works performed, services rendered or another document confirming the performance of works, rendering of services was signed.

5. Income from writing off obligations includes:

1) the write-off of obligations from a taxpayer by his/her/its creditor;

2) obligations unclaimed by a creditor as of the time of termination of activity by an individual entrepreneur;

3) the write-off of obligations due to expiration of the limitation period established by the laws of the Republic of Kazakhstan;

4) the write-off of obligations pursuant to a final and binding court judgment.

The amount of income from writing off obligations is equal to the amount of obligations (except for VAT amount) payable in accordance with source documents of an individual entrepreneur as of the day of:

1) submission of a tax application for termination of activity to a tax authority in the case specified in subparagraph 2) of part one of this paragraph;

2) write-offs in other cases.

Income from writing off obligations is recognized in the reporting taxable period:

1) in which an obligation is written off by a creditor in the case specified in subparagraph 1) of part one of this paragraph;

2) for which liquidation tax returns are filed to a tax authority in the case specified in subparagraph 2) of part one of this paragraph;

3) in which the limitation period expired in the case specified in subparagraph 3) of part one of this paragraph;

4) in which a court judgment became final and binding in the case specified in subparagraph 4) of part one of this paragraph.

6. Income in the form of surplus material valuables discovered in the course of inventory taking is recognized in the taxable period, in which the inventory taking was completed and an inventory certificate, indicating the fact of existence of such surpluses, was drawn up. An individual entrepreneur determines the surplus value on his/her own, on the basis of prices and tariffs effective in the Republic of Kazakhstan.

7. Income in the form of fines, penalty, forfeit and other types of sanctions is recognized in the taxable period, in which a court rendered a decision to collect them or they were recognized by a debtor.

8. If an individual entrepreneur carries out transactions for exchanging his/her goods, works or services for those of another person, it is required to draw up a certificate of transfer and acceptance of goods, works or services. The certificate of transfer and acceptance must indicate the value of goods, works or services transferred and received. Income from such a transaction is defined as positive difference between the value of received goods, works or services to be indicated in the certificate of transfer and acceptance and the production cost of transferred goods, works or services.

9. Income from a long-term contract for a reporting taxable period is income (to be) received for a taxable period.

10. Income from assigning the right of claim is:

1) for an individual entrepreneur acquiring the right of claim - positive difference between the amount of principal claim due from a debtor, including the amount in excess of the principal debt as of the date of assignment of the right of claim, and the value of acquisition of the right of claim. Such income from the assignment of the right of claim is the income of that taxable period, in which the acquired claim is paid off by the debtor;

2) for an individual entrepreneur that conceded the right of claim - positive difference between the value of the right of claim, for which the assignment was made, and the value of the claim receivable from a debtor as of the date of assignment of the right of claim, according to the taxpayer’s source documents. Such income from the assignment of the right of claim is the income of that taxable period, in which the assignment is made.

11. Income in the form of property received free of charge (except for charitable assistance) to be used for business purposes is the value of property received free of charge by an individual entrepreneur as his/her own property if such property is used by an individual entrepreneur for business purposes in the taxable period, in which such property is received.

Income in the form of property received free of charge (except for charitable assistance) to be used for business purposes is recognized in the taxable period, in which such property is received, except for immovable property and vehicles subject to state registration.

Income in the form of immovable property received free of charge (except for charitable assistance) to be used for business purposes is recognized in the taxable period of registration of the right of ownership of such property.

Income in the form of a vehicle received free of charge that is subject to state registration (except for charitable assistance) to be used for business purposes is recognized in the taxable period of state registration of such a vehicle.

The value of property received free of charge by an individual entrepreneur is the market value of the property, as of the date of emergence of the right of ownership of the property, which is indicated in an appraisal report conducted under an agreement between the appraiser and the individual entrepreneur in accordance with the legislation of the Republic of Kazakhstan on the appraisal activity.

12. Income in the form of the lessee’s reimbursement of expenses for maintenance and repair of the leased property, incurred by an individual entrepreneur that is the lessor, is recognized in the taxable period of such reimbursement.

Income of an individual entrepreneur that is the lessor in the form of the lessee’s expenses for maintenance and repair of the leased property, which is offset against the rent under a lease agreement, is recognized in the taxable period of such offset.