THE NEW TAX CODE COMING INTO FORCE IN 2026

From January 1, 2026, the new Tax Code will come into force.
Our lawyers would like to highlight the most important aspects that should be taken into consideration.

Corporate income tax. Prohibition on deducting expenses for goods and services purchased from persons operating under the simplified declaration regime

Article 286.12 of the Tax Code establishes a prohibition for corporate income tax (CIT) payers to deduct expenses for goods and services if they were purchased from a person applying the simplified declaration tax regime.

Non-residents

In our view, the new Tax Code has retained the previous approaches, provisions, and concepts of taxation of non-residents. However, the new Code provides a number of clarifications.

The clarifications relate to issues concerning the creation of a permanent establishment (hereinafter – PE). When working with non-residents who will come to Kazakhstan to perform works or provide services under two or more contracts, special attention will need to be paid to the potential creation of a permanent establishment.

For example, Article 228.5 of the new Tax Code introduces the concept of “similar contracts”. Now, if an LLP engages a non-resident to perform works in Kazakhstan, a period exceeding 6 months together with the condition of similarity or interrelation of contracts may be sufficient to establish a PE.

Possible new approach to equipment supply and installation contracts

There is a possibility that practice may change, as it may become necessary to separate the supply contract and the installation contract both in terms of amounts and timing.

For example, Company A in Italy supplies equipment to Kazakhstan (for industrial water purification purposes) and performs its installation. If Company A also periodically carries out installation work for other clients, it may be required to establish a branch in Kazakhstan that will perform installation services for all clients in the country.

If this is not done, there is a risk that Company A may be deemed to have a permanent establishment in Kazakhstan, since all installation contracts are similar and last more than 6 months per year.

As a result, Company A will conclude a supply contract with the LLP, which will not be subject to withholding tax, as it relates to the supply of goods. A separate installation contract will be concluded between the Kazakhstan-based branch and the client (LLP) in Kazakhstan. The branch in Kazakhstan will pay all applicable taxes in Kazakhstan on income derived from installation services.