Tax NewsFlash - April 2022

Dear Readers,

Starting from 2022, banks and banking organizations are required to provide to the tax authorities information on individuals’ transactions allegedly regarded as entrepreneurial activities. To implement this requirement, the Ministry of Finance approved the criteria¹ for classifying operations on individuals’ bank accounts as business activities and rules for the provision of such information to the tax authorities.

According to the established criteria, cash receipts on an individual’s bank account from one hundred or more persons during each of any three consecutive months are regarded as a sign of entrepreneurial activities.

In case of detecting the signs of entrepreneurial activities on individuals’ bank accounts, banks and banking organizations are required to report the tax authorities these operations and the owners of these bank accounts.

The list of individuals subject to these requirements will be expanded gradually and in 2022 include:

• persons occupying prominent state positions and their spouses;
•  persons authorized to perform state functions and their spouses;
• persons equivalent to persons authorized to perform state functions and their spouses;
• persons subject to personal tax filing obligations under the Constitutional Law On Elections and the laws On Combating Corruption, On Banks and Banking Activities, On Insurance Activities, and On the Securities Market.

By 15 January of the year following the reporting year, the state revenue authorities will compile a list of names of individuals meeting the aforementioned criteria. The tax authorities will request banks and banking organizations to provide information on transactions classified as entrepreneurial activities on bank accounts of these individuals.

Whenever transferring and receiving the information, the tax authorities, banks and banking organizations are obligated to comply with legislation of Kazakhstan on non-disclosure and prevention of the leakage of tax, banking and other sensitive information protected by law.

The rules enter into force on 15 April 2022.