We remind you about the current changes in the Republic of Kazakhstan, which came into force last year and related to international structures, including with regard to the rules of taxation of dividends.
Limitation of deduction of expenses for intra-group services
It provides for a limitation of deductions for corporate income tax (CIT) in respect of intangible services purchased from related non-resident persons in the amount of a total amount not exceeding 3% of taxable income.
The restriction covers the costs of acquiring management, consulting, consulting, auditing, design, legal, accounting, advocacy, advertising, marketing, franchising, financial (except for remuneration costs), engineering, agency services, royalties and rights to use intellectual property objects.
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% individual income tax (IIT) rate on dividends has been eliminated. The single rate of 10% personal income tax 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 full 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 relate to 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 provide comments and recommendations in connection with the new regulation and assess the necessary changes in the international structure.
Limitation of deduction of expenses for intra-group services
It provides for a limitation of deductions for corporate income tax (CIT) in respect of intangible services purchased from related non-resident persons in the amount of a total amount not exceeding 3% of taxable income.
The restriction covers the costs of acquiring management, consulting, consulting, auditing, design, legal, accounting, advocacy, advertising, marketing, franchising, financial (except for remuneration costs), engineering, agency services, royalties and rights to use intellectual property objects.
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% individual income tax (IIT) rate on dividends has been eliminated. The single rate of 10% personal income tax 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 full 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 relate to 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 provide comments and recommendations in connection with the new regulation and assess the necessary changes in the international structure.
