4.4.10.Special tax regimes

What are the categories of entrepreneurs the law stipulates the simplified tax regimes for?

According to Article 368 of the Tax Code of the Republic of Kazakhstan, the special tax regime with regard to the subjects of small business, farming, legal entities – the producers of agricultural goods, certain types of entrepreneurship activity have been stipulated.

What is the special tax regime stipulated for the subjects of small business?

According to Article 370 of the Tax Code, the special tax regime shall determine a simplified process to calculate and pay social tax and corporate or individual income tax, except for individual income tax withheld at the source of income for the subjects of small business.

Income for a tax period that consists of all types of taxes received (receivable) in the Territory of the Republic of Kazakhstan and outside, except for the previously taxed income in case of availability of the documents confirming withholding of tax at the source of income and (or) single coupon, shall be deemed the object of taxation.

Subjects of small business shall be granted a right to individually select one of four procedures to calculate and pay the taxes: common procedure, special tax regime on the basis of single coupon, special tax regime on the basis of patent (license), special tax regime on the basis of simplified tax return.

What is the special tax regime on the basis of single coupon?

According to Article 372 of the Tax Code, the special tax regime on the basis of single coupon shall be applied by individuals the activity of which is carried out periodically (they are engaged in activity not more that 90 days per year). The Authorized State Body shall determine the list of such types of activity.

Cost of single coupons shall be determined by the decision of the local representative bodies on the basis of the average daily data of timing control and researches conducted by the Tax Authority, taking into consideration the location, type, terms to perform the activity, quality and area of the object to gain income, as well as the other factors effecting the business efficiency.

What is the special tax regime on the basis of patent?

According to Article 374 of the Tax Code, the special tax regime on the basis of a patent shall be applied by the individual entrepreneurs, which do not use the labor of employees, those performing an activity in the form of private business and having an income per year that does not exceed 1 billion tenge.

Calculation of patent cost shall be carried out individually by the entrepreneurs by applying the rate of 3% to the income reported. Cost of the patent shall be paid to the budget in equal parts in the form of individual income and social tax.

What is a special regime on the basis of simplified tax return?

Article 376 of the Tax Code determine the requirements to the subjects of small business to carry out activity using special tax regime on the basis of simplified tax return. Calculation of tax on the basis of simplified tax return shall be done individually by the taxpayer by applying the corresponding tax rate to the object of taxation for a reporting tax period (quarter). Thus, income of individual entrepreneur shall be taxed at the rates from 4% up to 11% from the amount of income, and the income of legal entity shall be taxed at the rates from 5% up to 13%.

A simplified tax return shall be submitted to the Tax Authority on a quarterly basis not later than the 10^th day of a month following the reporting tax period. Payment of the taxes assessed in equal parts in the form of individual (corporate) income tax and social tax shall be made within a period not later the 15^th day of a month following the reporting one.

What is a special tax regime for farming?

According to Article 378 of the Tax Code, the special tax regime for farming stipulates a special procedure of payments to the budget on the basis of payment of single land tax, and it shall apply to the activity of the farming engaged in production of agricultural goods, processing of agricultural goods produced by them and the disposal of such goods, except for the activity on production, processing and disposal of excisable goods. Payers of single land tax shall not be deemed the payers of individual income tax from income gained from the farming activity, VAT, land tax, tax on transport vehicles and tax on property (within the quotas established).

Assessed value of land plot shall be deemed the base to calculate the single land tax. Calculation of single land tax shall be done by applying the rate of 0.1% to the assessed value of the land plot.

A single land tax shall be paid by making current payment within a period not later than 20 October of the current tax year (calendar year) and by making the final payment in a period not later than 20 March of a tax period following the reporting one. Tax return on single land tax for a previous tax period shall be submitted by the payer of single land tax annually within a period not later than 15 March of the current tax period.

What is a special tax regime of legal entities, producers of agricultural goods?

Article 385 of the Tax Code stipulates the requirements to perform the activity using a special tax regime for the legal entities, the producers of agricultural goods, which stipulates a special procedure to make payments to the budget on the basis of a patent.

A corporate income tax, social tax, land tax, tax on property, tax on transport vehicles and VAT shall be included into the calculation of the cost of the patent. When calculating the patent cost an amount of taxes payable to the budget shall be reduced by 80%.

Payment to the budget of the tax amounts included in the calculation of the patent cost shall be done not later than 20 May and 20 October accordingly in amount of 1/6 and 1/2 of the amount of taxes indicated in calculation of the patent cost. And not later than 20 March of the following reporting period (calendar year) in amount of the remained part of the patent cost, taking into account the submitted recalculations of taxes, included in calculation of the patent cost.

What is a special tax regime for certain types of entrepreneurial activity?

Article 392 of the Tax Code establishes a list of types of activity where the special tax regime for certain types of activity (gambling, billiard, etc.) may be used. The given special tax regime establishes a simplified procedure for the taxpayers to calculate and pay the corporate or individual income tax and VAT in the form of fixed total tax, as well as a simplified procedure to submit tax return on the given taxes and excise in the form of single simplified declaration.

Fixed total tax payable for one calendar year shall be determined by applying the corresponding annual tax rate to each object of taxation. The objects of taxation are determined by Article 393 of the Tax Code (game table, cash desk of totalizator, etc.). The local representative bodies shall determine the rates of fixed total tax from the unit of object of taxation on the basis of the data produced by Tax Authorities.

Amounts of excise and fixed total tax shall be payable monthly, but not later than 20 day of a month following the reporting one. A single simplified tax return on fixed total tax and excise shall be filed not later than 15 day of a month following the reporting one.