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On July 12, 2022, a number of amendments to the Tax Code of the Republic of Kazakhstan (the “Tax Code”) were introduced. Below are the most important of them, which, with a few exceptions, come into force on January 1, 2023.
1) Amendments to the exemption from tax on dividends applicable by resident legal persons (article 241 of the CGI)
- Dividends paid by resident legal entities, which are entitled to corporation tax (“IS”) exemption, can now be adjusted even if the amount of these dividends exceeds 50% of the total amount of IS of this entity;
- The adjustment is applicable to dividends on securities listed on the official listing of the Kazakh Stock Exchange (KASE) provided that such securities were traded in the reporting year.
2) Limitation of expenses for services purchased from non-resident affiliates (articles 264 and 288 of the CGI)
3) Changes to the dividend tax exemption applicable to resident individuals (articles 320 and 341 of the CGI)
- Due to the cancellation of the 5% withholding tax on dividends paid to resident natural persons, dividends received by these natural persons are now subject to a withholding tax at the rate of 10%;
- The adjustment applies to:
- dividends paid by resident legal persons up to 30,000 monthly indices calculated for the reporting year;
- dividends on securities listed on the official listing of the Kazakh Stock Exchange (KASE) provided that these securities were traded during the reporting year.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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