We#nbsp;remind you about the current changes in#nbsp;the Republic of#nbsp;Kazakhstan, which came into force last year and related to#nbsp;international structures, including with regard to#nbsp;the rules of#nbsp;taxation of#nbsp;dividends.
Limitation of#nbsp;deduction of#nbsp;expenses for intra-group services
It#nbsp;provides for a#nbsp;limitation of#nbsp;deductions for corporate income tax (CIT) in#nbsp;respect of#nbsp;intangible services purchased from related non-resident persons in#nbsp;the amount of#nbsp;a#nbsp;total amount not exceeding 3% of#nbsp;taxable income.
The restriction covers the costs of#nbsp;acquiring management, consulting, consulting, auditing, design, legal, accounting, advocacy, advertising, marketing, franchising, financial (except for remuneration costs), engineering, agency services, royalties and rights to#nbsp;use intellectual property objects.
For Kazakhstani companies: dividends paid by#nbsp;legal entities that reduce CIT by#nbsp;100% are exempt from taxation.
For resident individuals, the provision providing for a#nbsp;5% individual income tax (IIT) rate on#nbsp;dividends has been eliminated. The single rate of#nbsp;10% personal income tax will be#nbsp;applicable to#nbsp;all types of#nbsp;income of#nbsp;individuals.
Any dividends received from a#nbsp;resident legal entity within 30,000 MCI (monthly calculation index) for a#nbsp;calendar year are also exempt from taxation.
For non-residents, instead of#nbsp;full exemption from taxation of#nbsp;dividends if#nbsp;they have owned for more than three years and certain conditions are met, a#nbsp;preferential tax rate of#nbsp;10% is#nbsp;provided.
If#nbsp;these innovations relate to#nbsp;a#nbsp;group of#nbsp;your companies, then it#nbsp;is#nbsp;necessary to#nbsp;determine the change in#nbsp;the international structure in#nbsp;which the three-year dividend benefit was used, as#nbsp;well as#nbsp;to#nbsp;assess the amount of#nbsp;payments to#nbsp;related non-resident persons and establish how the operational structure can be#nbsp;optimized.
Acsour consultants are ready to#nbsp;provide comments and recommendations in#nbsp;connection with the new regulation and assess the necessary changes in#nbsp;the international structure.