Upcoming Changes in Kazakhstan’s Tax Code: Implications for Accounting, Tax, and Payroll

Kazakhstan’s tax landscape is poised for a significant overhaul with the introduction of a new Tax Code, slated for adoption by July 2025 and set to take effect on January 1, 2026. This development is highly relevant for professionals in accounting, tax, and payroll, as it introduces changes that will reshape compliance, reporting, and operational practices. The new code aims to streamline tax administration, enhance transparency through digital solutions, and align with international standards. This article explores the key changes and their implications for the industry, offering insights into how professionals can prepare.

Key Changes in the New Tax Code

The draft of the new Tax Code, shared for public discussion in 2024, includes several amendments that impact various sectors. Below are the most relevant changes for accounting, tax, and payroll professionals:

• Payroll Taxes: The social tax rate is fixed at 6%, ensuring predictability for employer contributions. However, the exclusion of most personal income tax deductions will increase employees’ taxable income, affecting payroll calculations.
• Corporate Income Tax (CIT): Differentiated CIT rates are introduced, with social sector organizations benefiting from a 10% rate, while banks and certain entities face a 25% rate. Other businesses will generally be subject to a 20% rate.
• VAT Administration: The “e-Tamga” system, a digital VAT payment platform, mandates electronic invoices for works and services, aiming to eliminate fictitious transactions and automate VAT refunds.
• Personal Taxation: The universal filing requirement expands to all citizens in 2025, mandating a one-time asset and liability declaration (Form 250.00) and an annual income and property declaration (Form 270.00). Deadlines are set for July 15 (hard copy) or September 15 (electronic) of the following year.
• International Taxation: Changes include amended definitions of tax residency, new triggers for permanent establishment, and adjustments to withholding tax rates, such as a 5% rate on dividends to nonresidents with significant capital holdings.

These changes reflect Kazakhstan’s commitment to modernizing its tax system, with a focus on digitalization and compliance.

Impact on Accounting and Tax Professionals

The new Tax Code presents both challenges and opportunities for accounting and tax professionals. The differentiated CIT rates necessitate revised tax planning strategies, as businesses may need to restructure to optimize tax liabilities. For instance, social sector organizations can leverage the 10% CIT rate to enhance sustainability, while banks must prepare for higher tax obligations. The “e-Tamga” system requires accounting departments to upgrade software and train staff to handle electronic VAT invoices, ensuring compliance with new reporting standards. Additionally, the removal of certain tax incentives, such as benefits for government securities income, will impact financial planning for corporations.

The universal filing requirement, effective for all citizens in 2025, adds complexity. While individuals are responsible for filing Forms 250.00 and 270.00, businesses may need to provide guidance to employees, particularly those unfamiliar with tax reporting. This could involve workshops or informational resources, increasing the workload for tax departments. Furthermore, the suspension of the tax statute of limitation during audits and expanded grounds for tax audits underscore the need for meticulous record-keeping and compliance.

Impact on Payroll Processing

Payroll professionals will face significant adjustments due to the new Tax Code. The fixation of the social tax rate at 6% provides clarity, as employers can plan contributions without anticipating rate changes. However, the exclusion of most personal income tax deductions is a critical change. Previously, deductions for expenses like medical costs or dependents may have reduced taxable income. Their removal means payroll systems must be recalibrated to withhold higher taxes, ensuring accurate deductions at source. This change could also affect employee net pay, potentially requiring communication to manage expectations.

Additionally, the universal filing requirement may indirectly impact payroll departments. Employees may seek clarification on their tax obligations, particularly regarding income and property declarations. Payroll teams should be prepared to direct employees to resources or coordinate with HR to provide support. The new Tax Code’s emphasis on digitalization, such as electronic invoicing for VAT, may also influence payroll processes if businesses integrate payroll and tax reporting systems for efficiency.

Preparation for the New Tax Code

To navigate the transition, professionals in accounting, tax, and payroll should take proactive steps:

1. Stay Informed: Monitor official announcements from the State Revenue Committee and consult reputable sources for updates on the Tax Code’s final provisions.
2. Update Systems: Invest in software upgrades to support electronic VAT invoicing and revised payroll tax calculations. Ensure compatibility with the “e-Tamga” system and other digital platforms.
3. Training and Education: Participate in training programs offered by professional associations or consultancies to understand the new tax provisions and their practical implications.
4. Engage Stakeholders: Collaborate with HR and management to communicate changes to employees, particularly regarding universal filing and increased tax withholdings.
5. Review Compliance: Conduct internal audits to ensure current practices align with the new Tax Code’s requirements, focusing on record-keeping and reporting accuracy.

Businesses can also leverage consulting services to assess the impact of the new Tax Code on their operations. Leinonen is happy to have a discussion with you to help you plan changes to your accounting and payroll functions.

Broader Context and Economic Implications

Kazakhstan’s new Tax Code is part of a broader effort to strengthen its economy, projected to grow by 5.1% in 2025. The code’s focus on digitalization, such as the “e-Tamga” system and potential VAT administration using the digital tenge, aligns with global trends toward transparent and efficient tax systems. However, the removal of certain tax benefits and increased tax rates for specific sectors may raise concerns among businesses, particularly in banking and gaming. The government’s decision to postpone the Tax Code’s implementation to 2026, as announced by President Kassym-Jomart Tokayev, reflects a commitment to public awareness and readiness.

The universal filing requirement, fully implemented in 2025, is a significant step toward combating tax evasion and increasing transparency. By requiring all citizens to declare assets and income, Kazakhstan aims to align with international standards, such as those set by the OECD’s Base Erosion and Profit Shifting (BEPS) framework, which Kazakhstan joined in 2017. This move may enhance Kazakhstan’s reputation as a reliable partner in global tax cooperation but will require significant effort from both individuals and businesses to comply.

Conclusion

The upcoming Tax Code in Kazakhstan, set to take effect in January 2026, represents a pivotal shift for the accounting, tax, and payroll industries. With changes like the fixed 6% social tax rate, exclusion of personal income tax deductions, and the “e-Tamga” VAT system, professionals must adapt to new compliance and reporting requirements. The universal filing requirement for all citizens in 2025 further underscores the need for proactive preparation. By staying informed, updating systems, and investing in training, accounting, tax, and payroll professionals can navigate these changes effectively, ensuring compliance and leveraging opportunities for efficiency.