1 – the number of days spent in the current tax period;
1/3 – the number of days spent in the tax period immediately preceding the current tax period;
1/6 – the number of days spent in the tax period before the one immediately preceding the current tax period.
If an individual has lived in the Republic of Kazakhstan in the current tax period for fewer than 30 calendar days, said individual shall not be considered to reside permanently in the Republic of Kazakhstan. In addition, an individual shall be considered a nonresident for the period following the last day spent in the Republic of Kazakhstan, unless said person becomes a resident in the year following the year in which the person’s stay in the Republic of Kazakhstan ended.
An individual’s center of vital interests shall be considered to be located in the Republic of Kazakhstan if the following conditions are met simultaneously:
1) an individual is a citizen of the Republic of Kazakhstan or has a permit to reside in the Republic of Kazakhstan (residency permit);
2) an individual’s family and/or close relatives reside in the Republic of Kazakhstan;
3) real property owned by an individual and/or members of his family or held by them on some other basis is located in the Republic of Kazakhstan, and the individual has access to it at any time for use as a residence for himself and/or members of his family.
Individuals who fall into the following categories and who are citizens of the Republic of Kazakhstan or who have filed an application for citizenship of the Republic of Kazakhstan or for a permit to reside permanently in the Republic of Kazakhstan without becoming a citizen of the Republic of Kazakhstan, shall be considered resident individuals, regardless of the time spent in the Republic of Kazakhstan and any other criteria provided below:
persons sent abroad on official business by government agencies, including employees of diplomatic and consular institutions and international organizations, as well as family members of said individuals;
crew members of means of transport belonging to legal entities or citizens of the Republic of Kazakhstan, which make regular international trips;
military and civilian personnel at military bases and those serving in military units, groups, contingents, or formations deployed outside the Republic of Kazakhstan;
persons working at facilities located outside the Republic of Kazakhstan which are owned by the Republic of Kazakhstan or constituent territories of the Republic of Kazakhstan (including on the basis of concession contracts);
students and persons undergoing on-the-job and practical training outside the Republic of Kazakhstan for educational purposes or to gain practical experience, for the entire period of instruction or practical training;
teachers and scientific personnel located outside the Republic of Kazakhstan for the purpose of teaching, consulting, or performing scientific work, for the entire period they are teaching or performing said work.
Also legal entities established in accordance with the legislation of the Republic of Kazakhstan, and/or other legal entities whose effective headquarters (or actual administrative offices) are located in the Republic of Kazakhstan, shall also be considered residents of the Republic of Kazakhstan. Effective headquarters (or actual administrative offices) shall be understood to mean the place where the principal management takes place and where strategic commercial decisions are made which are necessary for the performance of a legal entity’s entrepreneurial activity.
2.2 Permanent establishment of a nonresident
A permanent establishment of a nonresident in the Republic of Kazakhstan shall be defined as a place of business through which the nonresident performs all or part of its entrepreneurial activity, including activity performed through an authorized person, and specifically:
1) any place of doing business related to the production, processing, assembly, packaging, delivery, or realization of goods, regardless of the duration of the activity;
2) any management office, branch, division, representative office, bureau, office, agency, factory, workshop, production shop, laboratory, store, or warehouse of a nonresident, regardless of the duration of the activity;
3) any place of doing business related to the extraction of natural resources, including the extraction of hydrocarbons: an underground mine, a quarry, an oil and/or gas well, an open-pit mine, land-based or offshore derricks and/or wells, regardless of the duration of the activity;
4) any place of doing business (including monitoring or supervisory activity) related to a pipeline, gas line, the exploration and/or development of natural resources, the installation, set-up, assembly, start-up, adjustment, and/or servicing of equipment, regardless of the duration of the activity;
5) any other place of doing business related to the operation of slot machines (including accessories), computer networks and communications channels, amusement parks, the transportation or other infrastructure, regardless of the duration of the activity.
A construction site, an installation or assembly project, and the performance of planning work shall constitute a permanent establishment regardless of the duration of the work. In this context a construction site (project) shall be understood to mean specifically the place where work is performed to erect and/or renovate real property, including the construction of buildings and structures and/or the performance of installation work, the construction and/or rebuilding of bridges, roads, and canals, the laying of pipelines, the installation of power engineering, industrial, and other equipment, and/or the performance of other similar work. A construction site (project) shall cease to exist as of the day following the day on which the operating certificate for the project (or the acceptance certificate for the work performed) is signed and the construction has been paid for in full.
A nonresident shall also create a permanent establishment in the Republic of Kazakhstan if the nonresident:
1) collects insurance premiums and/or provides insurance or reinsurance coverage for risks in the Republic of Kazakhstan through an authorized agent;
2) provides services on the territory of the Republic of Kazakhstan continuously for more than 90 calendar days in any consecutive 12-month period ending in the given tax period, through employees or personnel hired for these purposes;
3) is a participant in a simple partnership (joint operating agreement) created in accordance with the legislation of the Republic of Kazakhstan and operating on the territory of the Republic of Kazakhstan;
4) holds exhibitions in the Republic of Kazakhstan for a fee and/or at which goods are sold;
5) on the basis of a contractual relationship grants a resident or nonresident the right to represent its interests in the Republic of Kazakhstan, or to act or conclude contracts (agreements, accords) on its behalf.
A nonresident engaged in entrepreneurial activity in the Republic of Kazakhstan through an independent intermediary (a broker and/or other independent agent acting on the basis of an agency, commission, or consignment agreement or another similar type of agreement), who is not authorized to sign contracts on behalf of the nonresident, shall not be considered to be creating a permanent establishment. An independent intermediary shall be understood to mean a person operating within the context of his usual (principal) business, who is both legally and economically independent of the nonresident.
2.3 Nonresidents’ income from sources in the Republic of Kazakhstan
The following types of income shall be considered nonresidents’ income from sources in the Republic of Kazakhstan:
1) income from the realization of goods, the performance of work, or the delivery of services in the Republic of Kazakhstan;
2) income earned from management, financial (with the exception of services involving the insurance and/or reinsurance of risks), consulting, auditing, marketing, legal (with the exception of attorney’s services), agency, and information services provided to residents or nonresidents doing business in the Republic of Kazakhstan through a permanent establishment, and related to said permanent establishment, regardless of where the services are actually provided;
3) capital gains resulting from:
the realization of property located on the territory of the Republic of Kazakhstan;
the realization of securities issued by residents, as well as a share interest in a resident legal entity or in property located in the Republic of Kazakhstan;
4) income from concession of the right of claim on a debt to residents or nonresidents in connection with doing business in the Republic of Kazakhstan through a permanent establishment;
5) charges (fines, penalties) for failure to fulfill or improper fulfillment of obligations by residents and nonresidents, which have arisen in the course of operations by said nonresidents in the Republic of Kazakhstan, including obligations under contracts (agreements, accords) for the performance of work (delivery of services) and/or under foreign trade contracts for the delivery of goods;
6) income in the form of dividends received from a resident legal entity, and income from a share interest in such a legal entity;
7) income in the form of interest, with the exception of interest on debt securities, received from:
residents;
nonresidents with a permanent establishment or property located in the Republic of Kazakhstan, if the debt owed by these nonresidents applies to their permanent establishment or property;
8) income in the form of interest on debt securities, received from:
resident issuers;
nonresident issuers with a permanent establishment or property located in the Republic of Kazakhstan, if the debt owed by these nonresidents applies to their permanent establishment or property;
9) income in the form of royalties received from residents or nonresidents in connection with doing business in the Republic of Kazakhstan through a permanent establishment;
10) income from the leasing of property located in the Republic of Kazakhstan;
11) income earned from real property located in the Republic of Kazakhstan;
12) income in the form of insurance premiums paid under agreements for the insurance or reinsurance of risks arising in the Republic of Kazakhstan;
13) income from providing transportation services for international shipments, one of the parties of which is the Republic of Kazakhstan;
14) income from operations in the Republic of Kazakhstan under individual labor agreements (contracts) or under other agreements of a civil-legal nature;
15) honoraria for managers and/or other payments received by members of a top administrative body (council of directors, board, or other similar body) of a resident legal entity, regardless of where the actual performance of the administrative duties assigned to such persons takes place;
16) supplemental payments made in connection with residing in the Republic of Kazakhstan;
17) income in the form of compensation for expenditures borne by an employer to provide material and social benefits or other material advantages to nonresident individuals working in the Republic of Kazakhstan, including expenditures on meals, housing, enrollment of children at educational institutions, and expenses related to leisure activities, including vacation travel for their family members;
18) pension payments effected by resident pension savings funds;
19) income paid to people employed in the arts: theater, film, radio and television performers, musicians, artists, and athletes from activities in the Republic of Kazakhstan, regardless of the person to whom payments are made;
20) winnings paid by residents;
21) income earned from providing independent personal (professional) services in the Republic of Kazakhstan;
22) income in the form of property located in the Republic of Kazakhstan that is received free of charge, including income from such property;
23) other income not covered under the preceding subitems that arises on the basis of activities performed in the Republic of Kazakhstan.
2.4 PROCEDURE FOR THE TAXATION OF INCOME EARNED BY NONRESIDENT LEGAL ENTITIES DOING BUSINESS WITHOUT CREATING A PERMANENT ESTABLISHMENT IN THE REPUBLIC OF KAZAKHSTAN
Income earned by a nonresident legal entity that defined above that is not related to a permanent establishment in the Republic of Kazakhstan shall be subject to the income tax at the source of payment without any deductions, at the rates set below.
Rates for the income tax at the source of payment
The income of a nonresident from sources in the Republic of Kazakhstan not related to a permanent establishment shall be subject to taxation at the source of payment at the following rates:
| 1) dividends, income from a share interest, and interest income | 15 percent |
| 2) insurance premiums paid under agreements for the insurance of risks | 10 percent |
| 3) insurance premiums paid under agreements for the reinsurance of risks | 5 percent |
| 4) income from providing transportation services in international shipments | 5 percent |
| 5) income defined under Article 178 of Tax Code of RK, with the exception of income referred to in subitems 1)–4) of this article | 20 percent |
The payment of income shall be defined as the mean the transfer of money in cash and/or noncash form, securities, goods, property, and the performance of work or delivery of services. The following shall not be subject to taxation at the source of payment:
1) payments related to the delivery of goods onto the territory of the Republic of Kazakhstan under foreign trade transactions;
2) income from providing services related to the opening and maintenance of correspondent accounts of resident banks and the performance of settlements on them;
3) capital gains from the realization of securities;
4) income from operations with government securities;
5) payments related to an adjustment, based on quality, in the selling price of crude oil transported via the unified pipeline system outside the Republic of Kazakhstan;
6) interest accumulated (accrued) on debt securities paid by resident buyers (not issuers) to nonresidents at the time of their purchase.
The taxation of a nonresident’s income at the source of payment shall be effected regardless of whether said nonresident turns over this income to third parties and/or to its subdivisions in other states. The procedure for the calculation and withholding of income tax at the source of payment from interest on debt securities shall be established by the authorized government agency. The person paying income (including a nonresident doing business in the Republic of Kazakhstan through a permanent establishment) is liable and responsible for the calculation and withholding of the income tax at the source of payment, and for payment of the tax to the state budget. Such a person shall be recognized as a tax agent in accordance with item 1 of Article 10 of Tax Code. A nonresident shall be recognized as a tax agent as of the moment said person begins doing business in the Republic of Kazakhstan, if its period of operation exceeds that established for the creation of a permanent establishment. The income tax shall be withheld at the source of payment regardless of the form and place of payment of the income.
2.4.1 Procedure and deadlines for the payment of income tax at the source of payment
Income tax withheld from the income of a nonresident legal entity at the source of payment shall be payable to the state budget:
1) on the amount of income paid – within five business days of the end of the month in which payment was effected;
2) on the amount of income accrued but not paid, when the income is taken as a deduction, within ten business days of the deadline established for the filing of a corporate income tax return.
The provision of this subitem shall not extend to interest on debt securities, the maturities of which fall after expiration of the deadline established by this subitem.
Tax agents shall be required to file a statement of income tax withheld at the source of payment with tax authorities where they are registered, on a quarterly basis no later than the 15th of the month following the reporting quarter in which an obligation to withhold income tax at the source of payment occurred.
2.4.2 Provisions specific to the calculation and payment of income tax on capital gains from the realization of securities