Tax legislation updates in the Republic of Kazakhstan effective from 1 January 2026

Statute of limitations 

The New Tax Code extends the limitations for tax offences. A three-year period will continue to apply to most taxpayers. However, for certain groups of taxpayers – including large businesses, subsoil users, and companies benefiting from investment incentives, among others – the limitation period will be extended to five years.

Tax reporting

• Where a tax return is not submitted, zero tax reports will be generated automatically.
• Tax benefits will be subject to annual assessments to evaluate their effectiveness and feasibility of their continued application.
• Information on a taxpayer’s use of tax benefits will no longer be protected under tax secrecy provisions. 

Tax audits

• The New Tax Code introduces a new audit framework, marking a shift away from traditional practices in scheduling and conducting tax audits. Under the new approach, audits will be scheduled based on a taxpayer’s tax burden ratio.
• The duration of field tax audits will be reduced to 180 calendar days, with exceptions applying to large taxpayers and in cases involving foreign counterparties. The audit period will be excluded from the calculation of the statute of limitations.

Enforcement measures

The following enforcement measures have been introduced into the Tax Code of the Republic of Kazakhstan to ensure compliance with tax obligations:

• Suspension of electronic VAT invoice issuance. This measure prevents taxpayers from issuing electronic VAT invoices or claiming input VAT deductions, effectively bringing their operations to a halt.
• Restriction of access to websites and/or online platforms of foreign companies.

A significant change in enforcement procedures is the introduction of a temporary travel ban for taxpayers who have failed to settle outstanding tax liabilities for more than three months after exceeding the established debt threshold. The tax authorities may issue a formal resolution imposing such a restriction on the chief executive (or acting executive) of a legal entity or its structural subdivision, as well as on individual entrepreneurs or private practitioners. 

Effective 2026, differentiated corporate income tax (CIT) rates will be introduced in Kazakhstan. While the standard rate remains at 20%, the following preferential and higher rates will apply:

• Banks and gambling businesses: increased rate of 25%
• Organizations in the social services sector: a reduced rate of 10% (for 2026, a transitional rate of 5% applies)
• Agricultural processors and producers: 3%
• Agricultural cooperatives: 6%

The threshold for CIT advance payments will be increased to 600,000 Monthly Calculation Indices (MCI), with one MCI currently equivalent to KZT 3,932.

Effective 2026, CIT will be applied to capital gains arising from the revaluation of a taxpayer’s contributions to authorized capital, with such capital gains treated as assets received free of charge.

The value of assets received as contributions to authorized capital, as well as additional contributions by members to the legal entity’s assets, will not be recognized as taxable income.

Accounting for exchange differences: 

• Adjustments to receivables in tenge arising from foreign exchange rate changes are recognized as income for CIT purposes, provided that the adjustments are due and recognized as income under IFRS and/or Kazakh accounting legislation.
• Similarly, adjustments to payables in tenge arising from foreign exchange rate changes are recognized as expense for CIT purposes, provided that the adjustments are payable and recognized as expense under IFRS and/or Kazakh accounting legislation.

Deduction of expenses for CIT purposes

The amendments grant taxpayers the right to deduct subsequent expenses on fixed assets in the tax period when they are incurred – in addition to the existing options for capitalizing such expenses.

The New Tax Code also specifies expenses that are not deductible for CIT purposes: 

• Expenses related to transactions carried out without actual performance of work, provision of services or delivery of goods
• Expenses incurred for the purchase of goods, work and services from parties applying a simplified taxation regime at the time of such purchases
• Expenses incurred by a VAT-registered individual entrepreneur or a legal entity in favor of another VAT-registered individual entrepreneur or a legal entity under a civil law contract, where payment is made in cash (including VAT) in an amount exceeding 1,000 times the MCI

CIT updates for the mining sector 

The New Tax Code allows companies operating in the mining sector to recognize unsuccessful exploration costs as deductible expenses for CIT purposes. Such costs may be either amortized or fully deducted in the tax period in which the production contract is completed.

VAT rates

• From 2026, the standard VAT rate will increase from 12% to 16%.
• Reduced VAT rates for the sale and import of medicines, certain medical products and medical services will be gradually increased – from 5% in 2026 to 10% in 2027.
• A 10% reduced VAT rate will apply to domestic printed periodicals.

VAT registration

• The New Tax Code establishes the VAT registration procedure and lowers the registration threshold from 20,000 MCIs to 10,000 MCIs (approximately KZT 39 million).
• A registry of foreign VAT payers will be established in 2026. A foreign company will be considered a VAT payer from the date of the first payment made by the purchaser of goods and/or services.

Draft bills on automated and comparative VAT controls

• Draft bills are being prepared to introduce automated and comparative control mechanisms for electronic VAT invoices. Both drafts are currently under consideration and have not yet been enacted.

Electronic VAT invoices

• The new rules require VAT-registered purchasers to issue electronic VAT invoices for goods, work or services acquired from a non-resident where the place of supply is Kazakhstan. The VAT payer may claim input VAT on behalf of the non-resident in the period in which the electronic VAT invoice was issued.
• The rules also clarify cases where a taxpayer is exempt from VAT but still required to issue an electronic VAT invoice, for example as a commission agent, freight forwarder or similar intermediary.

Permanent establishment and tax residency

Effective 2026, the New Tax Code introduces a broader definition of tax residency, emphasizing assessment based on the location where management decisions are made and control is exercised.

The definition of permanent establishment (PE) is also expanded to include similar contracts, which may indicate the existence of a PE. Similar contracts are those under which a non-resident or its related party provides services and/or performs work that: 

• Have a similar nature and purpose
• Have a similar scope
• Are carried out using the same technology
• Rely on the same infrastructure
• Utilize the same resources (equipment, workforce, tools)
• Are regarded as identical or equivalent

Non-resident income from sources in Kazakhstan

The New Tax Code expands the list of non-resident income considered sourced from Kazakhstan. Effective 2026, such income includes:

• Income from information processing services, as well as from management, financial, consulting, engineering, marketing, auditing, design, advertising and legal services provided outside Kazakhstan (excluding legal services related to representation or defense of rights and legitimate interests in courts, arbitration – including commercial arbitration tribunals – or notary services)
• Non-resident income from sources in Kazakhstan, including:
  • Advance payments to a non-resident if the non-resident fails to fulfill its obligations within 12 months of receiving the payment
  • Payment obligations to a resident for goods delivered, services provided or work performed that remain unfulfilled by the non-resident within 12 months
  • Income from a financial loan received (excluding bank loans) equal to the outstanding or partially outstanding principal

Royalties

The definition of royalties has been changed to include income from:

• The use or right to use software, including services for version updates, excluding intended solely for bug fixes, defect corrections or modifications not related to software development
• Know-how – confidential information of a technical, technological, organizational or other nature that has commercial value and is used in professional or business activities 

Payments for the full transfer of ownership (exclusive) rights to intellectual property are not treated as royalty income.

Additionally, the New Tax Code clarifies that technical support services are not subject to taxation as royalty income, provided that they are stated separately from income that qualifies as royalties. 

Dividends

The New Tax Code distinguishes two categories of dividends: dividends from income distribution and constructive dividends. 

The list of income distribution dividends is expanded to include:

• Income in the form of contributions that increase a legal entity’s authorized capital from its own equity, except for:
  • Additional paid-in capital exceeding the value of assets received by the issuer from the issuance of its shares over their nominal value
  • Additional contributions by a shareholder to the legal entity’s assets
  • Revaluation gains

Constructive dividends include:

• Income from transfer pricing adjustments
• Assets or economic benefits provided by a Kazakh legal entity to its shareholders, as well as expenses or obligations of shareholders or related parties that are settled by the legal entity without reimbursement

Withholding tax rates 

The New Tax Code establishes the following rates of CIT withheld at source on payments to non-residents:

If a tax agent pays CIT on a non-resident’s income from its own funds without withholding it from the non-resident, provisions of international tax treaties do not apply.

The New Tax Code removes the previous clause allowing international treaty provisions to apply to payments made to non-resident related parties.

New personal income tax (PIT) rates will take effect from 1 January 2026.

The New Tax Code also increases social security contribution rates and expands the list of individuals covered by compulsory social insurance to include those earning income under civil law contracts.

In a rapidly evolving tax landscape, the B1 team is ready to provide expert guidance, assist with obtaining private rulings from the tax authorities, and support you with any other related matters.

• Vadim Ilyin, B1 Partner, Tax, Law and Business Support
• Natalia Khobrakova, B1 Partner, Tax, Law and Business Support
• Tatyana Butuzova, B1 Senior Manager, Tax, Law and Business Support