| Kazakhstan Income Tax Individual income in Kazakhstan is taxed at a flat rate of 10% in 2009.
The new Tax Code brings some news to taxes paid from income of individuals - individual income tax and social tax. The flat rate of individual income tax remains at the same level of 10%. The new Tax Code contains a flat social tax rate at 11%, which considerably simplifies calculation of social tax as compared to the former regressive scale (previously the rate varied from 13% to 5%). Social tax is payable employers.
Concerning the wealth tax definition of an object of taxation is changed: If earlier it there were 'permanent assets and non-material assets', now - 'real estate'. The given innovation corresponds to practice of the majority of the countries and simplifies an order of calculation of the tax and reporting granting on it. It is necessary to note also such Tax code, as introduction of rates of excises in the text of the code (before the rate affirmed governmental orders РК) that corresponds to a principle of the law of direct action.
Resident individuals are taxed on worldwide income. Nonresidents are taxed only on Kazakhstan source income. An individual is considered a resident of Kazakhstan for personal income tax purposes if he / she permanently resides in or has his / her centre of vital interests in Kazakhstan.
Capital gains tax: Capital gains are treated as normal income, but taxed at a rate of 15%.
Capital acquisitions tax: There is no Capital acquisitions tax in Kazakhstan.
Real property tax: Individuals must pay property tax at progressive rates ranging from 0.05% to 1%, depending on the value of the property.
Inheritance tax / Estate tax: There is no Inheritance tax / Estate tax in Kazakhstan.
Net wealth / net worth tax: There is no Net wealth / net worth tax in Kazakhstan.
Kazakhstan Corporate TaxKazakhstan corporate income tax rate for 2010 is a flat 17.5%, which applies to both domestic and foreign companies. Corporate income tax rate will be reduced to 15% in 2011.
Kazakhstan Corporate income tax (CIT) is payable by resident legal entities (except government institutions) and non-resident legal entities doing business in Kazakhstan through a 'permanent establishment' (branch, representative office or other) or otherwise earning income from sources in Kazakhstan. Tax base for CIT is income. Among main innovations introduced to the CIT regulations are: a gradual reduction of the CIT rate from 30% in the previous legislation to 20% in 2009, to 17,5% in 2010, and then to 15% in 2011; reduction of the general rate of withholding tax on income of non-residents doing business without a permanent establishment from 20% to 15%. In the new Tax Code, the list of deductions of the CIT tax base was extended, for example, allowing deducting from the taxable income the value of the buildings, machinery and equipment that are being put into service. The new Tax Code abolished CIT advance payments for small and medium-sized enterprises and extended the term of tax loss carry-forwards up to 10 years instead of 3 years under the previous legislation.
The amount of taxable income is determined by subtracting deductible expenses and other deductions relating to fixed assets from adjusted gross income. Gross income of a legal entity is defined as income receivable both within and outside Kazakhstan within the tax period.
Taxation of dividends: Dividends received are excluded from gross income.
Capital gains tax: Capital gains are treated as normal income and taxed at the standard corporate tax rate of 20%.
Alternative minimum tax: There is no Alternative minimum tax in Kazakhstan.
Foreign tax credit: Foreign taxes paid by a resident taxpayer on foreign source income may be credited against the Kazakh tax liability on the same income. Foreign tax credits exceeding Kazakh tax on the relevant income may not be offset against the resident taxpayer's Kazakh tax liabilities on domestic source income, nor may not be carried forward or back.
Withholding tax - dividends: A withholding tax of 15% is levied on dividends paid to a nonresident (20% if paid to a recipient in a tax haven jurisdiction). The tax rate may be reduced under an applicable tax treaty.
Withholding tax - Interest: A 15% withholding tax is levied on interest paid to a nonresident (20% if paid to a recipient in a tax haven jurisdiction). The tax rate may be reduced under an applicable tax treaty.
Withholding tax - Royalties: Royalties paid to a nonresident are subject to a 15% withholding tax (20% if paid to a recipient in a tax haven jurisdiction). The tax rate may be reduced under an applicable tax treaty.
Withholding tax - Branch Remittance Tax: Foreign companies pay branch profits tax of 15% of net after-tax income, in addition to corporate income tax, making the effective rate 32%. The tax rate may be reduced under an applicable tax treaty.
Payroll Tax: Employers must withhold employee's payroll tax contributions (including compulsory contributions to pension funds) from salaries and similar compensation. Social Tax, also paid by the employer, is 11% of the salary.
Real property tax: Legal entities pay property tax at a rate of 1% of the average annual net book value of their fixed and intangible assets. Legal entities operating under the simplified tax regime pay property tax at a rate of 0.5%.
Kazakhstan VAT RateValue Added Tax (VAT) rate in Kazakhstan is 12%. Exports are zero-rated and exemptions exist for financial services, the sale and lease of land, etc. Value added tax in Kazakhstan is levied on the supply of goods and services and on imports.
Besides decrease in the rate of the VAT to 12 % from earlier operating 13 %, one of the important innovations connected with regulation of the tax to an added value is stage-by-stage introduction of compensation from the budget of a positive difference between the VAT, to payable suppliers, and the VAT, to the added buyers (debtor balance under the VAT). Thus the mechanism of return of debtor balance under the VAT is entered since January, 01st, 2012.
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