COVID-19 in Kazakhstan: Payment of Salary-Related Taxes Suspended

The Kazakhstan government has adopted a resolution that establishes the so-called “adjustment coefficient” zero to salary-related taxes and payments in an effort to stabilize the economy during the coronavirus (COVID-19) pandemic.

Resolution No. 224, On Further Measures to Implement Decree of the President of Kazakhstan dated 16 March 2020 No. 287, On Further Measures to Stabilize the Economy, On Taxation Issues, adopted on 20 April, applies to the following:

• Individual income tax withheld at the source of income.
• Individual income tax paid independently by a person engaged in private practice.
• Social tax, mandatory pension payments, mandatory professional pension payments, social deductions, and payments and deductions for the mandatory social medical insurance, except for those paid by an individual entrepreneur for him/herself.

This means that the taxes and payments are accrued but are effectively not paid because their rate is zero.

Importantly, this “adjustment coefficient” applies temporarily and only in respect of certain qualified categories of taxpayers:

• Persons engaged in private practice as well as micro, small, and medium businesses engaged in activities listed in Annex 1 to the resolution in respect of obligations that are due to be paid (accrued) during the period from 1 April to 1 October 2020. This list contains 29 business activities such as hotels, restaurants, leasing and management of owned or leased property, and legal services.
• Large entrepreneurs engaged in activities listed in Annex 2 to the resolution in respect of obligations that are due to be paid (accrued) during the period from 1 April to 1 July 2020. This list is narrower and contains only 10 business activities.

While technically speaking the resolution applies to all qualified taxpayers, in substance, it is aimed at supporting persons who were affected by the current pandemic, e.g., those who decreased staff or salary.

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Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Almaty
Aset Shyngyssov
Bakhytzhan Kadyrov