Tax Newsflash - January 2022

Dear Readers,

In December 2021, the President signed a law¹ introducing amendments to the Tax Code and to the Law on the Enactment of the Tax Code. We offer you an overview of some of the most important amendments.

The majority of the amendments entered into force on 1 January 2022. Some amendments entered into effect before or after this date. We indicated the effective date next to each that provision.

Terminology

The amendments introduced the term taxpayer's passport. The tax passports represent open information about the taxpayer. The tax authorities will monthly update taxpayers’ passports and publish them on the tax authorities’ website. Taxpayers engaged in public catering and trading activities should place their passports in public places. (Effective from 1 March 2022)

The amendments introduced the terms a tax mobile application which is intended to provide individuals with information on their tax liabilities.

The amendments expand the term cash settlements to include mobile payments. Accordingly, sellers accepting mobile payments are obligated to issue cash register receipts. Transactions via the special mobile application are exempt from this requirement.

The amendments introduced the term merchant ID which is a unique set of characters in the payment system identifying a foreign internet-company that receives payments from Kazakh individuals for goods or services.

Tax Administration

A new form of the state control is the control over the turnover of certain goods imported into the Eurasian Economic Union. The amendments also introduced norms regulating the procedures for the control of the imported goods.

The list of open risk criteria is excluded from the Tax Code. The list will be approved by a separate bylaw. This change should simplify the procedure for the introduction of amendments to the open risk criteria list and to the risk management system.

According to the amendments, a simplified liquidation procedure is permitted for VAT payers reporting no business activities from the date of VAT registration.

The amendments added the following points to the list of information that banks and banking organizations are required to provide to the tax authorities:

• Information on the annual amounts of mobile payments received by companies and individual entrepreneurs; (Effective from 1 March 2022)
• Information on the monthly amount of payments to individual entrepreneurs working under the special mobile application tax regime; (Effective from 1 March 2022)
• Information on the annual amounts of payments and transfers to foreign Internet companies;
• Information on transactions allegedly regarded as entrepreneurial activity on the accounts of individuals not registered as individual entrepreneurs (The provision relates to individuals that are subject to income tax filing obligations. Therefore, the requirement will be introduced gradually, concurrently to the stages of universal filing).

Tax Liabilities

The amendments establish that the tax authorities may grant a taxpayer the right to settle the tax obligations by instalments during the period of more than a year only against the pledge of a real estate or under a bank guarantee. The sole home of the taxpayer cannot be pledged. (Effective from 1 March 2022)

A tax agent is not required to file nil reports on income tax withheld from nonresidents, if there is no income taxable at the source of payment. (Effective from 1 January 2018)

The amendments replaced the Minimum Monthly Salary with the Monthly Index Factor for the purpose of calculation of various indicators.

VAT Administration

The amendments entitled exporters of raw materials that converted at least half of their foreign-currency proceeds to refund up to 80 percent of the excess input VAT under a simplified procedure.

The amendments eliminated from the Tax Code all provisions related to VAT control bank accounts.

The offset method of import VAT payment was extended to 1 January 2025.

Investment Commitment Agreement

A new Tax Code chapter regulates procedure for taxation of investors operating under Agreements on Investment Obligations. An investor working under an Agreement on Investment Obligations is granted with a guarantee of the stability of tax legislation.