Since January 1, 2026, the new Tax Code of the Republic of Kazakhstan has been in force, changing the approach to applying the corporate income tax (CIT) incentive available to Astana Hub participants. Articles 739-741 of the Tax Code provide for several categories of income and establish specific conditions for applying the tax incentive to certain types of income. In practice, this means that for an Astana Hub participant, it is no longer sufficient to establish that its activities generally fall within an approved priority activity. An additional question arises: what is the legal and economic nature of the specific income?
This issue is particularly relevant for IT companies that simultaneously engage in software development, modification and maintenance, licensing, SaaS services, testing, and other software-related activities and services.
Article 739 of the Tax Code establishes the general framework for reducing corporate income tax for Astana Hub participants. Within this framework, income from intellectual property (IP) objects, income from certain information technology services, and other income of a participant not falling within the first two categories are regulated separately. Therefore, when determining how the tax incentive should be applied, it is advisable to analyse the income in a consistent manner.
The first category is income from intellectual property objects. Such income is subject to the special rules set out in Article 740 of the Tax Code. This category includes, among other things, income from the sale of intellectual property objects, the sale of goods incorporating intellectual property objects, royalties, certain compensation for infringement of rights, as well as other income related to the use of intellectual property objects. At the same time, a fundamental condition is that the participant must hold exclusive proprietary rights to the relevant intellectual property object.
The second category is income from the provision of information technology services covered by Article 741 of the Tax Code. For this category, the legislation establishes additional requirements relating to the number of employees, their qualifications, work experience and/or relevant professional experience, as well as the expenses required to provide the relevant services. To confirm compliance with these requirements, special Rules were approved by Order No. 599/НҚ of November 27, 2025 of the Deputy Prime Minister – Minister of Artificial Intelligence and Digital Development of the Republic of Kazakhstan. These Rules have been effective since January 1, 2026.
The third category is other income of an Astana Hub participant that does not fall within the first two categories. The existence of this third category is of significant practical importance. Not every item of income earned by an IT company necessarily has to be classified either as income from an intellectual property object under Article 740 or as income from information technology services under Article 741.
At first glance, it may appear that if an IT company’s activities result in the development of software or individual software components, the resulting income automatically falls under Article 740. However, such an approach may be overly simplistic. Article 740 links the relevant tax treatment to the existence of exclusive proprietary rights of the rights holder to the intellectual property object. Therefore, the mere fact that software or another protected development result has been created is not sufficient. It is necessary to analyse the contractual and legal chain: who is the rights holder of the created result, when the relevant rights arise, who owns them, and whether they are subsequently transferred to the customer. For example, a contract may provide for the development of software according to the customer’s technical specifications, while the exclusive proprietary rights to the result belong directly to the customer. In another situation, the rights may initially belong to the developer and subsequently be transferred to the client. Despite the outwardly similar development process, the legal and tax classification of the resulting income may potentially differ.
At the same time, the absence of state registration of a software program does not, in itself, mean that copyright does not exist. The Law of the Republic of Kazakhstan “On Copyright and Related Rights” establishes that computer programs (software) are protected by copyright. Legal protection extends to all types of computer programs that may be expressed in any language and in any form, including source code and object code. Moreover, copyright arises by virtue of the creation of the work. Its creation and exercise do not require registration, any other special formality, or compliance with specific formal requirements. Accordingly, when assessing the applicability of Article 740, what matters is not only whether a copyright registration certificate exists, but, first and foremost, whether exclusive proprietary rights to the relevant intellectual property result have arisen and who owns those rights.
Another important issue arises when distinguishing software development and modification from certain services regulated by Article 741 of the Tax Code. In everyday IT practice, the terms development, customisation, adaptation, modification and refinement may be used relatively loosely. However, copyright legislation draws a clear distinction between certain concepts. The Law of the Republic of Kazakhstan “On Copyright and Related Rights” defines adaptation of a computer program as making changes to software exclusively for the purpose of ensuring its functioning on specific technical equipment of the user or under the control of specific user programs.
In turn, modification (alteration) means any changes to a computer program that do not constitute adaptation. This distinction is of considerable practical importance. For example, the development of a new software module or functionality, the creation of a user interface, or changes to the business logic of an existing program should not automatically be classified as “adaptation” merely because the changes are made to existing software. Moreover, copyright legislation separately provides protection for derivative works, including adaptations and other alterations. Therefore, depending on the nature of the changes performed, the result of modifying existing software may also require a separate assessment in terms of the creation and ownership of rights to the resulting intellectual work. Thus, for tax classification purposes, it is necessary to analyse the actual substance of the work performed, rather than merely the terminology used by the parties in the contract.
An even more interesting situation arises when individual activities characteristic of the services listed in Article 741 constitute technological stages of a broader software development process. A modern development cycle generally includes a set of interconnected processes: design, development, testing, defect correction, integration, and subsequent refinement. However, the mere fact that a developer tests software being created or modified by that developer does not necessarily mean that the customer is receiving a standalone software testing service.
In our view, at least two situations should be distinguished.
In the first situation, the customer purchases an independent service for testing existing software. The service is provided for in the contract or technical specifications and constitutes a standalone deliverable for the customer.
In the second situation, testing is performed by the developer as an integral part of the process of creating or modifying software. The customer purchases the final development result, while testing is not billed separately, accepted as an independent deliverable, or treated as a separate subject of supply.
Automatically treating these two models as equivalent may result in an artificial fragmentation of a single development process into separate services. A similar analysis may be required with respect to adaptation, configuration, technical support, and other activities performed as part of a comprehensive IT project.
The distinction between these categories is no longer merely a theoretical issue. For income from information technology services falling under Article 741, the legislator has established specific conditions for applying the corporate income tax reduction. In addition, the Rules approved by Order No. 599/НҚ establish a special procedure for confirming a participant’s compliance with these conditions. In particular, information concerning the employees required to provide the relevant services, their qualifications, work experience and/or professional experience, as well as the expenses incurred by the participant, must be confirmed. Therefore, incorrectly classifying a comprehensive development project as a combination of separate services may have tangible practical consequences. A company may be required to demonstrate the relevant employees, their qualifications, and the corresponding level of expenses in relation to income that is actually generated from a single development project. At the same time, the mere inability to separately identify the cost of testing, configuration, or another operation within the overall remuneration should not be the sole basis for determining the tax classification. The first step should be to establish what exactly is being supplied to the customer.
The new rules once again demonstrate the growing importance of the content of an IT company’s contractual documentation. Wording such as “IT services,” “development and maintenance,” “technical services,” or “software modification” may by itself be insufficient to determine the tax classification of income.
The analysis should establish:
- what exactly the contractor is required to create or perform;
- what constitutes the final deliverable for the customer;
- whether a new intellectual property object is created or an existing one is modified;
- who owns the exclusive proprietary rights to the result;
- whether such rights are to be transferred to the customer;
- whether testing, adaptation, configuration, or technical support constitute standalone services or elements of a single development process;
- whether separate remuneration is provided for such services;
- how the relevant result is reflected in technical specifications, acceptance certificates, and other primary documentation.
It is particularly important that the contract, technical specifications, acceptance certificate, and the company’s actual business model do not contradict one another.
The new system does not mean that companies need to artificially divide every IT project into development, testing, configuration, technical support, and other components. On the contrary, the starting point of the analysis should be the actual subject of the supply and the economic substance of the transaction. If a company earns income from an intellectual property object owned by it, the conditions of Article 740 should be analysed and the relevant exclusive proprietary rights should be properly documented. If the subject of the supply consists of standalone services covered by Article 741, the specific requirements of that article and the established procedure for confirming compliance with those requirements must be taken into account. If, however, the income does not fall into either the first or second category, its classification should be considered within the general framework of Article 739, rather than artificially treating it as income from an intellectual property object or from individual information technology services.
The changes introduced in 2026 make the tax analysis of Astana Hub participants’ activities more substantive. It is no longer sufficient to answer the question: “Is the company engaged in IT activities?”
The next question is considerably more complex: “What exactly is the company being paid for, from a legal and economic perspective?”
The answer may depend on several provisions of the contract: what constitutes the development result, who owns the exclusive proprietary rights to that result, whether those rights are to be transferred to the customer, and whether testing, adaptation, configuration, or technical support constitute standalone services or integral elements of a single development process. For this reason, Articles 739-741 of the Tax Code should be considered not in isolation, but as an integrated system and in conjunction with intellectual property legislation. As practice in applying the new rules develops, it will become particularly important to establish consistent approaches to complex and hybrid IT business models. For Astana Hub participants, this will help not only to correctly determine the applicable tax regime, but also to structure their contractual, primary, and accounting documentation in advance so that it consistently reflects the actual substance of their activities.
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