2018 Law Reforms

1. Tax Laws

   On 25 December 2017, as a part of the tax system reform, President Nursultan Nazarbaev signed the following acts:

   The Code of the Republic of Kazakhstan No. 120-VI 'On Taxes and Other Mandatory Payments to the Budget (the Tax Code)'; The Law of the Republic of Kazakhstan No. 121-VI 'On the Enactment of the Tax Code' ('the Law on the Enactment of the Tax Code'), which introduces the new Tax Code; and The Law of the Republic of Kazakhstan No. 122-VI 'On Amendments to Certain Legislative Acts of the Republic of Kazakhstan on Taxation' ('the Law on Amendments to Other Acts'), which impacts 40 legislative acts related to taxation. The Tax Code

   The new Tax Code has been elaborated in order to eliminate inefficient tax benefits, optimize tax regimes, bring fiscal policy in line with the new economic realis, encourage businesses to come out of the closets, expand the tax base in the commodity sector, and improve VAT management.

   The conceptual changes introduced by the new Tax Code include the introduction of the taxpayers' good faith principle, which assigns the task of proving the taxpayer's fault to the tax authorities.

   Along with the new Tax Code, the concept of horizontal monitoring is introduced, which implies the exchange of information and documents between the competent body and the taxpayer, and is based on the principles of cooperation, legitimate trust, lawfulness, transparency and enhanced information interaction.

   Moreover, the Tax Code sets out a procedure for preliminary clarification of the tax laws by the competent body for the emergence of tax obligation in respect of contemplated transactions at the request of taxpayers under horizontal monitoring, or organizations implementing an investment priority project. The main feature of the preliminary clarification is that in the event a taxpayer follows tax authority's clarification, which was subsequently changed or canceled, the taxpayer will not be charged with fines or penalties.

   In order to reduce the financial burden on the business, the social tax rate for the period from 1 January 2018 to 1 January 2025 will be 9.5 percent.

   Hence, one can note a positive trend aimed at improving relations between tax authorities and taxpayers.

   The Law on the Enactment of the Tax Code

   Despite the general provision on the enactment of the Tax Code on 1 January 2018, some changes are expected to be introduced gradually.

   One of the main changes anticipated by taxpayers is the reduction of...