FCHAIN Kazakhstan reports that the Mazhilis has approved the new Tax Code and related amendments on taxation in its second reading. This legislative move marks a significant shift in Kazakhstan’s tax policy, aiming to modernize the system while promoting fairness and economic growth.
Key Highlights of the New Tax Code:
VAT Reform
- The standard VAT rate has been set at 16%, reduced from the initially proposed 20%, following collaboration between the Parliament and the Cabinet of Ministers.
- The VAT registration threshold has been lowered from 20,000 MCI to 10,000 MCI, expanding the VAT base.
- Reduced VAT rates for pharmaceuticals and medical services:
5% starting in 2026
10% starting in 2027
- VAT exemptions introduced for:
Goods and services under the guaranteed volume of free medical care
Mandatory health insurance
Treatment of orphan and socially significant diseases
- Additional exemptions include:
Socially significant food products
Domestically published books and publishing services for printed books
- VAT offset for agricultural producers increased from 70% to 80%, enhancing sector support.
Simplified Declaration System Reform
- A prohibitive list of activities is introduced, replacing the previous permissive list.
- A flat 4% rate is established, with local authorities allowed to adjust it by ±50% to reflect regional specifics.
Expansion of Special Tax Regimes
- Broader application of special tax regimes for business-to-business operations, facilitating SME interactions.
Corporate Income Tax (CIT) Changes
- CIT rate for gambling and banking sectors increased to 25%
- For banks, income from lending to entrepreneurs remains taxed at 20%
Introduction of Progressive Personal Income Tax (PIT)
- Wages:
10% for income up to 8,500 MCI (~KZT 33.5 million/year)
15% for income exceeding this threshold
- Dividends:
5% for income up to 230,000 MCI (~KZT 1 billion)
15% above that level
- Non-resident individuals:
10% for income up to 600,000 MCI
17% beyond that This progressive PIT structure ensures a fair tax burden while protecting low- and middle-income citizens.
Tax Benefits for Social Sector Organizations
- Reduced CIT rates for social sector organizations:
5% starting in 2026
10% starting in 2027
- Increased social tax deduction for individuals with disabilities to 5,000 MCI
- Select public associations to be exempt from certain taxes.
Excise Tax Reforms
- Gradual increases in excise duties on alcohol, tobacco, and heated tobacco products
- Introduction of excise tax on energy drinks
Land and Subsoil Use Adjustments
- Land used inefficiently for agricultural purposes will be subject to fees up to 100 times higher
- Revision of subsoil use fees based on license duration and number of sites
Other Key Measures
- Reintroduction of advertising fees from 2026
- Planned elimination of routine tax inspections, aimed at reducing administrative burden on businesses
The adoption of the new Tax Code represents a comprehensive overhaul of Kazakhstan’s tax system, prioritizing equity, economic stimulation, and improved compliance. Businesses and individuals alike are advised to review the new regulations and prepare for phased implementation starting from 2026.
Article is prepared by Ekaterina Kassumova,
Director of FChain Kazakhstan
30th of April 2025
