Kazakhstan tax: Government agency issues a resolution that requires banks to create provision

The Kazakhstan government agency that regulates and supervises the financial markets and financial institutions has issued a resolution that requires banks to create a provision (i.e. a reserve fund) for all loans to companies that are registered or subsidiaries of companies registered in low-tax countries unless specific collateral is provided.

Currently, 34 jurisdictions are listed as low-tax countries. The mandatory reserve requirement applies to all second-tier banks, the Bank for the Development of Kazakhstan JSC and organizations carrying out certain types of banking activities.

The resolution is effective as from 1 January 2010.