Kazakhstan: Tax Alert - December 2015


1. Regarding the Law of the Republic of Kazakhstan (further - the "RoK") "On Republican budget for 2016-2018"

By the Law of the RoK "On Republican budget for 2016 2018" №426 V dated November 30, 2015 the following indicators were set:

  • minimum salary 22 859 tenge;
  • basic state pension amount 11 965 tenge;
  • minimum pension payment 25 854 tenge;
  • monthly calculated index (further "MCI") 2 121 tenge.

The changes become effective from January 1, 2016.

2. Regarding approval of the form of declaration on property legalization

By the Order №593 dated November 27, 2015, Minister of Finance of the RoK approved the form of declaration on property legalization and its filing rules, to be submitted by oralmans and individuals who have permanent residence.

As such, the declaration on legalization of property consists of the declaration and attachment, aimed to reflect detailed information on property to be legalized.

Further, the attachment to the declaration should be prepared in a mandatory manner while filing the lines in the declaration, which demand disclosure of the corresponding indicators and shall not be maid due to absence of data to be reported.

The Order becomes effective after 10 calendar days from its first official publication from January 2, 2016.

3. Regarding introduction of a new tax for Kazakhstani producers

In accordance with the Law of the RoK "On amendments and additions to certain legislative acts of the RoK on issues of industrial and innovation policy" dated September 17, 2015 (further the "Law"), from January 1, 2016 a new monopoly structure single operator for extended obligations of manufacturers (further "EOM") is created.

According to the Law, EOM will charge Kazakhstani producers and importers sum totaled to 1.5% from the products produced for garbage collection, transportation, processing and neutralization, as well as disposal of waste.

The following changes are aimed to involve producers and importers in the works connected to waste disposal and recycling.

However, business representatives noted that creation of a single operator EOM violates the existing legislation and basic principles of competition.

In connection with that, entrepreneurs addressed to the Government of the RoK with a proposal to perform an analysis of all acts regulating the mechanism of EOM realization, with involvement of National Chamber of Entrepreneurs of the RoK "Atameken", branch associations, interested parties and experts.

As such, entrepreneurs suggest introducing EOM gradually, so it would be in compliance with producers, importers and population readiness.

4. Regarding the changes in the Labour Code of the RoK

As it was mentioned in the previous tax alerts that the Law "On amendments and additions to some legislative act on labour law regulations" (further the "Labour Code") was signed.

So, according to the Labour Code the following changes were made:

  • documents required for employment:

    In compliance with the changes, when entering employment, representation of documents confirming military registration, registration at place of residence and address reference by employee to employer became optional.
  • non competition agreement:

    In compliance with article 29 of the Labour Code employer has the right to conclude with employee non competition agreement, according to which employee is obliged not to perform activities, which may cause damage to the employer.

    The change is introduced; since in practice, employees create competitive businesses and enterprises, and disclose commercial information.
  • probation period:

    In accordance with the article 36 of the Labour Code, the probation period for employee shall be 3 months.

    However, since the 3 months' probation period for heads is insufficient, the article 36 is amended with the new paragraph, according to which probation period for heads of organizations, chief accountants and their deputes, heads of branches and companies' representatives may be extended up to 6 months.
  • dismissal of employees:

    Among already existing basid for labour contract termination on the initiative of the employer, the new Labor Code provides five additional reasons for dismissal of employee, such as:

    • reach of a retirement age by employee;
    • absence of the employee at work for more than 1 month due to unknown to employer reasons;
    • decrease of volume of production, work and services provided, which leads to deterioration of economic condition of the employer;
    • repeated fail of an employee to pass health and safety knowledge check or industrial safety knowledge check in the industrial organization;
    • decision of the owner of the legal entity property, to terminate the powers of the head of the executive body employees, internal audit service and corporate secretary.

The changes become effective from January 1, 2016.

5. Regarding combination of Tax and Customs Code

By results of a meeting of Mazhilis of Parliament of the RoK the decision on combination of Tax and Customs Codes was made.

The main reason for the combination is introduction of a sales tax instead of value added tax.

In addition, it was decided to set three level tax regime for business, such as:

  • patent;
  • special tax regime for small and medium business;
  • generally established regime.

The draft on combined Tax and Custom Codes will be introduced for consideration no later than September 1, 2016.

6. Regarding the Agreement on pension provision within Eurasian Economic Union (further – "EEU")

The Agreement on pension provision within the EEU (further the "Agreement") becomes effective, according to which citizens of the countries members of the EEU receive a guarantee on pension and experience accrual while working in one of the EEU countries.

Thus, according to the Agreement, pension payments will be settled, and paid by the state employer. For instance, in case the citizen of the RoK worked on the territory of one of the countries members of the EEC, then all earnings will be transferred to the Government Pension Fund of the RoK and paid upon reach of a retirement age of that individual.

The changes become effective from January 1, 2016.

7. Regarding mandatory provision of information about goods, imported on the territory of the EEU by the means of air transport

By the decision of the Board of EEU mandatory information about goods, imported on the territory of the EEU using air transport is implemented.

According to the updates, information will be submitted by carrier to customs authority of the state member of the EEU on whose territory the place of arrival of goods is located.

The following decision will allow customs authorities of the EEU to make preliminary decisions on the selection of objects and forms of customs control measures to ensure the carrying out of customs control until the arrival of the goods into the customs territory of the EEU.

The changes become effective from April 1, 2017.

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.

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