Article: Tax legislation stimulates micro-farming in Kazakhstan

Tax legislation stimulates micro-farming in Kazakhstan

Nurzhan Stamkulov, Partner

Household plot implies that a citizen has a small garden or a vegetable garden, barn-door fowl or cattle that generates profit. Our tax legislation indicates that these revenues will not be taxed by the individual income tax. This means that the private individual can easily start farming. It is even better if this farmer will sell products to:

• a storage organization in the agribusiness industry
• a farmer cooperative
• or to a legal entity exercising agro-processing.

The above-mentioned organizations will not deduct the individual income tax on the products purchase contracts from the farmer under the condition of:

1. This profit a year does not exceed 720 thousand tenge
2. He has a household plot ownership certificate
3. Confirmation of the local executive body
4. Products are included in the Article 341.1.14 of the Tax code (cherries, peaches, cucumbers, eggs, tomatoes, cattle meet, milk, etc.)

Such farmer will not have VAT because the 720 thousand tenge a year limit does not reach the VAT emergence trigger.
The tax on the land will also be quite acceptable.