Information message on the features of tax administration when interacting with counterparties from states with preferential taxation

Attention taxpayers! In connection with the enactment of the 2026 Tax Code, special requirements and restrictions are established for operations with persons registered in states with preferential taxation (offshore zones).

1. Criteria for classification as states with preferential taxation A foreign state or territory is recognized as a state with preferential taxation if one of the following conditions is met:

• the established income tax rate is less than 10 percent;
• there are laws on the confidentiality of financial information that allow maintaining secrecy about the actual owners of property or income;
• there is a lack of effective information exchange with the authorized body of the Republic of Kazakhstan (written refusal or failure to provide information for more than two years). The list of such states is approved by the authorized body. (Order of the Minister of Finance of the Republic of Kazakhstan No. 492 dated September 12, 2025).

2. Procedure for taxation at the source of payment When paying income to non-residents registered in preferential states, the following rules apply:

• Increased rate: Income is subject to income tax at the source of payment at a rate of 20 percent.
• Territorial principle: Payments for performance of work and provision of services are recognized as income from sources in the Republic of Kazakhstan for such persons, regardless of the place of their actual performance.
• Restriction of benefits: Provisions of international tax treaties on tax exemption do not apply if the recipient is not the ultimate (actual) beneficial owner of the income.

3. Restrictions on the recognition of expenses as deductions For residents of the Republic of Kazakhstan, strict limits are set for deductions on transactions with interconnected parties from offshore zones:

• Expenses for management, consulting, auditing, legal, advertising, and a number of other services, as well as royalties, are deductible in an amount not exceeding 3 percent of taxable income.
• Taxes paid in states with preferential taxation are not deductible in the Republic of Kazakhstan.

4. Special procedure for determining the value of property Upon the realization of assets (securities, participation shares, real estate), the rights to which or transactions with which are registered in a state with preferential taxation, or acquired in such a state, their initial cost is recognized as equal to zero. In this case, the entire amount of the realization is taxed without deducting acquisition costs.
5. Controlled Foreign Companies (CFC) A non-resident legal entity or other form of organization is recognized as a CFC automatically if it is registered in a state with preferential taxation. Regarding such companies:

• Exemptions from taxation of financial profit provided for ordinary foreign companies do not apply.
• CFC profit is included in the resident's taxable income and taxed at a rate of 20 percent for legal entities or in accordance with a progressive scale for individuals.
• Losses of CFCs from preferential states are not taken into account and do not reduce the total profit.

Recommendations: Business entities are recommended to exercise due diligence when structuring transactions with foreign counterparties and timely check the status of the partner's country of registration in the approved list of states with preferential taxation to minimize tax risks and exclude cases of additional tax assessment based on the results of desk audits and tax inspections.

Source : https://www.gov.kz/memleket/entities/kgd-zhetysu/press/news/details/1242061?lang=ru