Starting from January 1, 2023, changes concerning international structures and affecting business structuring have come into force in Kazakhstan.
Key changes affected:
Limitation of deduction of expenses for intra-group services
It provides for the limitation of deductions for corporate income tax (CIT) with respect to non-material services purchased from related non-resident persons in the amount of a total sum not exceeding 3% of taxable income.
The limitation includes the costs of acquiring management, advisory, consulting, auditing, design, legal, accounting, advocatory, advertising, marketing, franchising, financial (except for remuneration costs), engineering, agency services, royalties and rights to use works of authorship.
Changes in the rules of taxation of dividends
For Kazakhstani companies: dividends paid by legal entities that reduce CIT by 100% are exempt from taxation.
For resident individuals, the provision providing for a 5% rate of individual income tax (IIT) on dividends has been excluded. The single rate of the IIT of 10% will be applicable to all types of income of individuals.
Any dividends received from a resident legal entity within 30,000 MCI (monthly calculation index) for a calendar year are also exempt from taxation.
For non-residents, instead of complete exemption from taxation of dividends if they have owned for more than three years and certain conditions are met, a preferential tax rate of 10% is provided.
If these innovations concern a group of your companies, then it is necessary to determine the change in the international structure in which the three-year dividend benefit was used, as well as to assess the amount of payments to related non-resident persons and establish how the operational structure can be optimized.
Acsour consultants are ready to put forward comments and recommendations in connection with the new regulation and assess the necessary changes in the international structure.
Key changes affected:
Limitation of deduction of expenses for intra-group services
It provides for the limitation of deductions for corporate income tax (CIT) with respect to non-material services purchased from related non-resident persons in the amount of a total sum not exceeding 3% of taxable income.
The limitation includes the costs of acquiring management, advisory, consulting, auditing, design, legal, accounting, advocatory, advertising, marketing, franchising, financial (except for remuneration costs), engineering, agency services, royalties and rights to use works of authorship.
Changes in the rules of taxation of dividends
For Kazakhstani companies: dividends paid by legal entities that reduce CIT by 100% are exempt from taxation.
For resident individuals, the provision providing for a 5% rate of individual income tax (IIT) on dividends has been excluded. The single rate of the IIT of 10% will be applicable to all types of income of individuals.
Any dividends received from a resident legal entity within 30,000 MCI (monthly calculation index) for a calendar year are also exempt from taxation.
For non-residents, instead of complete exemption from taxation of dividends if they have owned for more than three years and certain conditions are met, a preferential tax rate of 10% is provided.
If these innovations concern a group of your companies, then it is necessary to determine the change in the international structure in which the three-year dividend benefit was used, as well as to assess the amount of payments to related non-resident persons and establish how the operational structure can be optimized.
Acsour consultants are ready to put forward comments and recommendations in connection with the new regulation and assess the necessary changes in the international structure.
