Tax legislation in the Republic of Kazakstan is constantly evolving as part of the development of a young sovereign State.
The key changes in the tax legislation are provided in the Edict of the President of the Republic of Kazakstan "Concerning Taxes and Other Obligatory Payments to the Budget" which became effective July 1, 1995, as amended with effect from 1 January , 1996.
The following information on taxes operating in the territory of the Republic of Kazakstan is based on the legislation as at 1 August, 1996.
COMPUTATION OF TAXABLE INCOME
Depreciation and Depletion
Five major pools of fixed assets are subject to depreciation on a reducing balance basis. The following table provides the maximum rates of selected assets. Lower rates may be used.
Annual Rate Cars, taxis, computers, others 20% Trucks, buses, industrial equipment, others 15% Depreciable assets not included in other pools 10% Road station assets, electroengines, others 8% Buildings 7%
Technological equipment used in production processes is depreciated in accordance with the rates established for the corresponding group of capital assets during the first three years in which the asset is used. The balance, after three years of operation, may be depreciated at any rate at the taxpayer's discretion.
Loss Carryovers
Losses from business activities may be carried forward for up to five years to offset future profits.
Other Matters
Taxable income is defined as the difference between aggregate annual income and established deductions. Aggregate annual income is the income of a legal entity derived from different sources during a calendar year. Income includes such items as sales revenues (jobs, goods, services), revenues from increasing the value of fixed assets, revenues from noncommercial transactions (interest, dividends, gifts and donations, fines, etc.), gains from the revaluation of assets, finished goods, stocks, and the debt write-offs.
All expenses connected with receiving income are deductible from aggregate annual income. Established deductions include wage costs, social security payments, materials expenses, payments to the State Fund of Employment Assistance and other expenditures (excluding capital expenditures), interest expenses, research and development expenses, doubtful debts.
A legal entity may use either the cash method or the accrual method to prepare tax returns. Any such election applies to all taxes and to the entire tax year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Jonathan Wale or Zaid Sethi on tel: +7 3272 622 101 or enter a text search 'Coopers & Lybrand' and 'Business Monitor'.
