Horizontal Monitoring 2026: Updated Procedures and Eligibility Criteria

Dear Readers,

The New Tax Code significantly updated the horizontal monitoring procedure. The amendments affected the admission criteria, as well as the formats and tools of interaction between taxpayers and the tax authorities. In line with these changes, the Ministry of Finance revised¹ the Rules for Conducting the Pilot Project on Horizontal Monitoring. Below we present a brief overview of the key changes.

Data Showcase

The updated horizontal monitoring procedure became more technology-driven. To participate in horizontal monitoring, a taxpayer must maintain a data showcase, an information system through which the tax authorities obtain continuous remote access to the taxpayer’s tax and accounting data.

Internal Tax Control System

The procedure significantly strengthened the role of the internal tax control system. The rules introduced mandatory disclosure elements of the internal control system, which taxpayers place in the data showcase and which the tax authorities assess. Based on the assessment results, the tax authorities may issue recommendations, and failure to implement them may result in termination of the horizontal monitoring agreement.

Eligibility Criteria

Participation in horizontal monitoring remained voluntary; however, the authorities updated the admission requirements:

• value of fixed assets: 650,000 times the MIF (previously 325,000 times the MIF);
• amount of taxes and social payments paid: KZT 5 billion (previously KZT 1 billion);
• the rules removed the headcount criterion (previously not less than 250 employees) and the tax risk management filter;
• the rules established mandatory requirements for the availability of a data showcase and an internal tax control system.

In addition, the regulator introduced a separate category for current and former participants of the Pilot Project. Reduced quantitative thresholds applied to this category; however, taxpayers remained required to maintain automated accounting systems, an internal tax control system, and a data showcase.

At the same time, the tax authorities ceased to recognize the status of a participant of the Astana International Financial Centre (AIFC) or of an organization implementing a priority investment project as a basis for horizontal monitoring. The regime applied exclusively to taxpayers that met the established quantitative, technological, and control requirements.

Advisory Council

Within the framework of horizontal monitoring, the rules established an Advisory Council with representatives of the tax authority and the taxpayer. The Council considered disputes and issued a reasoned decision based on the outcome of its review.

From a procedural perspective, horizontal monitoring relied on recommendations rather than notifications. The review process included discussion stages, preparation of a disagreement protocol, and consideration by the Advisory Council. Disagreement on tax-related matters could lead to a thematic tax audit.

Timeframes

The Ministry of Finance reduced the overall duration of the Pilot Project and set its end date to 1 January 2027 (previously 31 December 2027). The revised rules unified the pilot project timeframe, as they eliminated differentiation by taxpayer categories. In addition, the Ministry extended the deadline for developing and implementing the horizontal monitoring information system and related requirements: it moved the final date from 1 October 2025 to 1 October 2026.

Participation Criteria

For commercial organizations, the regulator retained the requirements relating to the value of fixed assets (from 325,000 times the MIF), the amount of taxes paid (from KZT 1 billion), the use of automated accounting systems, and the availability of an internal tax control system.

At the same time, the rules removed the requirement for a taxpayer to demonstrate a low or medium risk level under the risk management system. The legislature linked this change to the abolition of the Risk Management System (RMS) in the new Tax Code.

Pre-Project Stage

The revised Rules excluded provisions on transfer pricing analysis and the review of historical data for non-audited tax periods. The regulator also abolished the possibility of suspending pre-project work deadlines, which it previously allowed in certain cases.

Interaction with the Tax Authorities

The authorities replaced the previous model based on “granting access” to accounting data with an approach based on the placement of documents in the horizontal monitoring information system. This change reflected the transition to a platform-based interaction model.

Regarding tax control, the rules established that for taxes and payments whose tax returns, accounting registers, and primary documents taxpayers placed in the horizontal monitoring information system, the tax authorities conducted tax control within the framework of the Rules. For taxes and payments whose data taxpayers did not place in the system, the tax authorities applied the general tax control procedure under the applicable tax legislation.

The amendments to the Rules for Conducting the Pilot Project on Horizontal Monitoring entered into force on 19 January 2026.

¹ Order No. 818 of the Minister of Finance of the Republic of Kazakhstan On Amendments to Order No. 648 of the Acting Minister of Finance of the Republic of Kazakhstan, dated 1 July 2020 approving the Rules for Conducting the Pilot Project on Horizontal Monitoring, dated 29 December 2025