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KAZAKHSTAN's new tax code providing simplified regime for SMEs came into force

posted onJanuary 13, 2018

On 25 December 2017, Kazakhstan adopted a new Tax Code and certain tax-related amendments to a number of laws. Most provisions of the New Tax Code and the Tax Amendments took effect on 1 January 2018. The new Code is aiming to remove inefficient tax benefits, improve tax schemes, bring the fiscal policy into conformity to new economic demands, stimulate business to get out of the shadow market, expand the taxation in the commodity sector, and improve VAT administration.

It should be noted that the business community took an active part in the drafting of the Tax Code, a significant part of  Atameken's initiatives were supported and taken into account. Atameken, is the national chamber of entrepreneurs of the Republic Kazakhstan. 
The current threshold for VAT in the amount of 30,000 MCI is preserved without a phased reduction;
The existing special tax regimes are preserved;
The social tax rate reduced from 11 to 9.5%;
The principle of good faith of the taxpayer was introduced;
Fines and penalties will not be applied if the taxpayer acted in accordance with the explanation of the tax authority and on which the position subsequently changed;
Reduced the limitation period from 2020 for SMEs from 5 to 3 years, for the remaining 5 years.

Under the New Tax Code, from 1 January 2020:
significant changes to the New Tax Code (such as introducing new taxes or increasing tax rates) will be possible not more than once a year, should be adopted not later than 1 July of the current year, and should take effect not earlier than 1 January of the following year;
other changes to the new Tax Code (such as those relating to tax administration or improving the taxpayer’s position) are possible more frequently than once a year, but should be adopted not later than 1 December of the current year; and
changes to the New Tax Code should be enacted only by a specific law dealing with taxation and may not be included in other laws.

The provisions for individual income tax will be altered from January 1, 2020 in connection with the introduction of universal declarations for citizens. The norms regarding the issuance of invoices and excise rates will come into force on January 1, 2019, while the norms on taxation of dividends and value increments, as well as the Free Economic Zones will enter into force from January 1, 2020.