Understanding Kazakhstan's Tax System and Regulatory Framework in 2025

Kazakhstan's tax legislation is grounded in its Constitution and primarily governed by the Tax Code of the Republic of Kazakhstan (referred to as the "Tax Code") alongside other regulatory legal acts. In cases where tax laws conflict with other national legislation, the tax provisions prevail. However, when international treaties ratified by Kazakhstan contradict domestic tax regulations, the treaty terms take precedence, ensuring alignment with global standards.

The Evolution of Kazakhstan’s Tax Code

The current version of the Tax Code came into force on January 1, 2018, marking a significant step toward modernizing the country’s fiscal policy. It introduced targeted adjustments to tax rates and incentives aimed at stimulating economic growth across various sectors. Notably, it lightens the tax burden on non-resource-based industries while increasing levies on extractive activities, promoting balanced development. Small and medium-sized enterprises (SMEs) benefit from multiple relief measures under this framework.

In February 2022, President Kassym-Jomart Tokayev signed amendments to the Tax Code designed to enhance efficiency and support vulnerable sectors. Key updates include simplifying VAT exemption procedures and setting the VAT taxable threshold at six times the monthly calculation index—approximately $42. Taxpayers with arrears below this level are no longer subject to account freezes, reducing administrative pressure on micro-businesses.

Additional reforms allow individuals who withdraw pension savings early to defer personal income tax, with part of the liability payable upon retirement. Businesses in sectors hardest hit by the pandemic may opt for a reduced 3% retail tax instead of standard corporate or individual income taxes—a measure valid for two years. Mobile operators providing broadband internet in rural areas also receive preferential treatment, supporting digital inclusion.

To streamline local taxation, property and land taxes for individuals have been consolidated. Residents of multi-unit apartment buildings are now exempt from land tax, reflecting efforts to ease urban living costs. Furthermore, companies commencing commercial solid mineral extraction from 2023 onward are exempt from mineral extraction tax, incentivizing investment in mining exploration and infrastructure.

Tax Compliance and Enforcement Mechanisms

Tax administration in Kazakhstan combines oversight through tax inspections and enforcement via specialized tax police units. When violations occur, taxpayers are formally notified and given five business days to respond and resolve discrepancies. Affected parties retain the right to appeal decisions to higher tax authorities in accordance with established legal procedures.

The country applies a territorial tax principle: tax obligations arise based on whether income is sourced within Kazakhstan, regardless of the taxpayer’s citizenship or residency status. This approach supports transparency and clarity for foreign investors and cross-border operations.

Key Taxes and Updated Rates in Kazakhstan (2025)

All entities conducting business activities in Kazakhstan—including local companies and permanent establishments of foreign firms—are required to comply with the following major taxes:

Corporate Income Tax (CIT)

CIT is calculated on taxable income derived after deducting allowable expenses and carried-forward losses, taxed at a standard rate of 20%. Capital investments in buildings, machinery, equipment, and facilities qualify for tax base deductions. SMEs are exempt from making advance CIT payments, improving cash flow. Losses can be carried forward for up to ten years, offering long-term flexibility for businesses navigating market fluctuations.

Value Added Tax (VAT)

The standard VAT rate remains at 12%, applicable to both domestic sales and export-related transactions. Foreign digital service providers—including e-commerce platforms and online content sellers—are also subject to this rate under the so-called 'Google Tax,' introduced in 2022 to ensure fair competition between domestic and international tech firms.

Personal Income Tax (PIT)

Natural persons are taxed at a flat rate of 10% on income earned within Kazakhstan. Dividend income sourced abroad is taxed at a preferential rate of 5%, encouraging outward investment while maintaining fiscal control.

Social Tax

Effective January 1, 2025, the social tax rate increases from 9.5% to 11% for most employers and employees. This contribution funds public social security programs. Employers hiring persons with disabilities enjoy a significantly reduced rate of 4.5%, promoting inclusive employment practices.

Excise Tax

Excise duties apply to select goods including alcoholic beverages, tobacco products, automobiles, gasoline (excluding aviation fuel), diesel, crude oil, and certain raw materials. These excises serve both revenue generation and public health/environmental objectives.

Land Tax

Land taxation varies by use and quality. Agricultural land is assessed using a tiered grading system, while industrial plots are valued based on location and productivity. To encourage efficient land utilization, progressive rates ranging from 0.1% to 0.5% are applied, discouraging speculative holding.

Property Tax

This tax applies to tangible and intangible fixed assets (excluding transport vehicles) based on their average annual value. For legal entities, the tax base is multiplied by a flat rate of 1.5%, providing predictability for asset-heavy industries.

Real Estate Tax for Legal Entities

A separate real estate tax is imposed on immovable property owned by companies at a rate of 2%. This complements the general property tax and targets high-value commercial holdings.

Mineral Extraction and Special Resource Taxes

Resource-intensive enterprises face three main fiscal obligations: (1) Mineral Extraction Tax (MET); (2) Excess Profit Tax (EPT); and (3) Other专项 payments. These ensure that natural resource exploitation contributes equitably to state revenues, particularly in oil, gas, and mining sectors.

Digital Economy Taxes

Since 2022, Kazakhstan has implemented two key digital economy taxes. First, foreign digital service providers must collect and remit 12% VAT on sales made via websites or platforms targeting Kazakh consumers. Second, cryptocurrency mining operations are taxed directly based on electricity consumption—at a rate of 1 tenge per kilowatt-hour—curbing energy misuse and generating new revenue streams.

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