Important changes in tax legislation

30.07.2023
From: IS Paragraph 

New Rules for the calculation and payment of social contributions

The Social Code of the Republic of Kazakhstan (the RK) came into force on 1 July 2023.

Order No. 229 of the Deputy Prime Minister - Minister of Labour and Social Protection of the RK dd. 21.06.2023, enacts the following Regulations on social contributions (hereinafter - "SCs") concerning:

  1. calculation, payment of SCs and penalties thereon to the State Social Insurance Fund;

  2. refund of overpaid (erroneously paid) SCs and (or) penalties for their untimely and (or) incomplete payment;

  3. issuing information to the participant of the compulsory social insurance system on the status and movement of SCs;

  4. providing information to payers on the status and movement of SCs.


According to the new Rules, until 1 January 2024, the following persons are recognised as SCs payers:

  • employers 
  • individual entrepreneurs, including peasant farms and farming enterprises 
  • private practitioners who calculate and pay SCs to the Fund in accordance with the procedure established by the legislation of the RK
  • individuals - payers of a single aggregate payment under art. 774 of the Tax Code.


From 1 January 2024 until 1 January 2025, the following persons will be recognised as SCs payers:

  • employers
  • individual entrepreneurs, including peasant farms and farming enterprise 
  • private practitioners who calculate and pay SCs to the Fund in accordance with the procedure established by the legislation of the RK

Also from 1 July 2023, local executive bodies and other legal entities that pay material benefits to individual assistants who provide social services to persons with Group I disability (with mobility difficulties) are recognised as SCs payers.

Social contributions payable to the Fund on behalf of participants in the compulsory social insurance system are calculated, as before, at the rate of 3.5% of the SCs calculation object.

From 1 January 2025, the rate will increase to 5%.

For single aggregate taxpayers, the amount of SCs paid in their favour is 20% of the object of SCs calculation.

For tax agents who choose to pay SCs as part of a single payment, the rate is set at 3.2%, and from 1 January 2025 it will be 4.5%. The share of SCs in the single payment rate is set by cl. 3 art. 244 of the Social Code.


New list of veterinary medicines exempt from VAT

The changes were introduced by Order No. 190 of the Minister of Agriculture of the RK dd. 22.05.2023 and came into force on 1 July 2023.

The new edition sets out the lists of:

  • medicinal products of any form used in veterinary medicine, including active pharmaceutical substances 
  • veterinary products, including prosthetic and orthopaedic products and veterinary equipment
  • materials and components for the production of the above-mentioned medicines and products, the sales turnovers of which are exempt from VAT
  • goods, the import of which is exempt from VAT.

It should be reminded that VAT exemption of turnovers on the sale of the above-mentioned goods in the territory of the RK or in case of their import is stipulated by s-cl. 34) art. 394 and s-cl. 11) cl. 1 art. 399 of the Tax Code, if these lists are approved by the authorised body of the agro-industrial complex in coordination with the central authorised body for state planning.


Changes to the marking and traceability of tobacco products Rules

The changes were introduced by Order No. 607 of the Deputy Prime Minister - Minister of Labour and Social Protection of the RK dd. 05.06.2023 and came into force on 24 June 2023.

The Rules for marking and traceability of tobacco products have been given a new name: “Rules for Marking and Traceability of Tobacco Products by Means of Identification”. They have also been amended editorially. In addition, Annexes 1, 2, 3, 4, 5, 6, 7, 8 and 9 to the Rules are set out in a new version.

The remaining unmarked disposable e-cigarettes and similar disposable individual electric vaping devices, included in HS code 2404, were to be sold until 30 June 2023.

When tobacco products are withdrawn from the market on grounds other than retail sale, the withdrawing market participant must submit a withdrawal notification in the prescribed form to the Information System for Marking and Traceability of Goods.


The schedule of tax audits based on the Risk Management System (RMS) for H2 2023 has been approved

On 25 May 2023, on the website of the Ministry of Finance of the RK there was published the Schedule of periodic tax audits based on risk assessment of territorial bodies of the State Revenue Committee of the Ministry of Finance for H2 2023 in the field of ensuring the receipt of taxes and other mandatory payments to the budget, completeness and timeliness of social payments, approved by Order No. 540 of the Deputy Prime Minister - Minister of Finance of the Republic of Kazakhstan dd. 25.05.2023.

According to cl. 2 art. 145 of the Tax Code, such tax audits are appointed by the tax authorities in respect of taxpayers (tax agents) based on the results of analysis of tax reporting, information from authorised state bodies, as well as information obtained from official and open sources of information on the activities of taxpayers (tax agents).

663 entities are subject to the audit.


Mandatory Occupational Pension Contributions (MOPC): New List of works and professions with harmful labour conditions has been approved

As of 1 July 2023, in order to implement cl. 5 art. 248  of the Social Code, a new List of manufactures, works and professions connected with harmful working conditions, for the benefit of which the agents are to pay MOPC at their own expense, came into force.

The List is approved by Order No. 170 of the Minister of Labour and Social Protection of Population of the RK dd. 24.05.2023. 

It includes the following sections:

  1. mining operations
  2. ore preparation, concentration, pelletizing (sintering, briquetting, agglomeration), roasting of ores and non-metallic minerals
  3. metallurgical production (ferrous metals)
  4. metallurgical production (non-ferrous metals)
  5. metal processing
  6. chemical production
  7. nuclear industry
  8. work with radioactive substances, sources of ionising radiation, beryllium, tantalum, niobium and rare earth elements
  9. other works
  10. production of construction materials
  11. pulp and paper and wood processing industries
  12. production of medicines, medical and biological preparations and materials
  13. health care, social welfare and cultural institutions
  14. transport
  15. hardware production
  16. textile industry
  17. general professions.

The MOPC payable to the Unified Accumulative Pension Fund (UAPF) is set at 5% of the employee's monthly income.

MOPC are carried out by agents at their own expense in favour of workers employed in harmful production whose professions are provided for in the approved List.

In the event of the exclusion of harmful labour conditions confirmed by the results of the certification of production facilities, the payment of MOPC by agents shall not be carried out.

An agent is exempted from paying MOPC to the UAPF for:

  • persons who have reached retirement age
  • military personnel (except for fixed-term service), employees of special state and law enforcement agencies, the State Courier Service, as well as persons whose rights to hold special ranks, class ranks and to wear uniforms were abolished as of 1 January 2012
  • recipients of pension payments for length of service.


Rules for refund of excess VAT have changed

Order No. 289 of the Minister of Finance of RK dd. 20.03.2023 amends and supplements the Rules of refund of excess VAT and application of RMS in order to confirm the reliability of the excess amount, approved by Order No. 391 of the Minister of Finance of the RK dd. 19.03.2018.

The amendments became effective from 7 April 2023.

The VAT refund period is reduced from 155 calendar days to 75 working days, and the category of taxpayers selling fuel and lubricants when refuelling aircraft of foreign airlines performing international flights and international air transportations is expanded.

In particular, suppliers of ground handling services were added. In addition, the List of exporters of raw materials and producers of own-produced goods for the purposes of VAT refunds has been clarified.

 In addition, during the development of regulatory legal acts, comments and suggestions of business community members were taken into account and a number of improving amendments and additions were adopted:

  • improved additions were made for exporters in terms of stopping the formation of the Pyramid report on counterparties providing railway transport services, additional grounds not taking into account violations were included.

And also in the part of:

  • clarification of types of discrepancies on terminated cases on non-rehabilitation grounds under art. 245 of the Criminal Code of the RK;

  • exclusion of entities selling fuels and lubricants sold by airports when refuelling aircraft of foreign airlines operating international flights from the category of direct suppliers for which violations of the Pyramid report are not taken into account in order to bring them into compliance with cl. 12 art. 152 of the Tax Code;

  • allowing the taxpayer to independently choose the criterion for applying the simplified refund procedure in accordance with art. 434 of the Tax Code

.