As of January 1, 2025, significant reforms in the Tax Code of Kazakhstan have come into effect, refining the processes associated with individual income taxes and introducing new provisions aimed at improving tax compliance and fairness. These changes include mechanisms for crediting foreign taxes, clarifying tax declarations, and specifying tax procedures for expatriates living and working in Kazakhstan.
With the introduction of Article 638, Kazakhstan addresses the issue of double taxation for its residents who earn income abroad. By allowing the credit of foreign taxes paid against Kazakhstani tax obligations, the amendment seeks to prevent the simultaneous taxation of the same income by two different jurisdictions, contingent upon the provision of documentation proving foreign tax payments.
Article 640 defines excess individual income tax, ensuring clarity for taxpayers. It sets forth that any positive difference between the tax withheld at source and the tax calculated based on the annual income will be treated as an excess payment, eligible for adjustment. This aims to simplify the reconciliation process for taxpayers at the end of the fiscal year.
Furthermore, Article 641 stipulates that individual income tax, as declared on annual returns, must be paid within ten days following the deadline for submission. This stipulation is crucial for maintaining timely tax payments and for avoiding potential penalties associated with delinquency.
The taxation of expatriate residents has also been streamlined through Articles 642 and 643 of Tax code. Expatriates are now required to make preliminary tax payments, which are reconciled at the end of the year to reflect actual income minus any statutory deductions. This process is further detailed in the provisions, ensuring that expatriates are well-informed of their tax obligations and that they comply with Kazakhstani tax laws.
In conclusion, the updates to the Tax Code in 2025 serve to modernize the tax system in Kazakhstan, making it more equitable and easier to navigate for both domestic taxpayers and expatriates. These changes underscore the country’s commitment to fostering a transparent tax environment, encouraging compliance and simplifying the tax filing and payment process.
