Indirect Tax News - December 2020

VAT in Kazakhstan through the prism of time ethod

According to the World Bank's published report in 2020, Kazakhstan ranks 25th out of 190 countries in the rating of favourable business conditions. (This ranking puts it at the top of the countries of the Eurasian Economic Union.)

Indeed, the government has taken many measures aimed at improving the country's economic climate and it is continuing to work to create comfortable conditions for taxpayers and investors.

The history of Value Added Tax in Kazakhstan begins in 1990. The country was the first Eastern European country in the Commonwealth of Independent States (CIS) to introduce Value Added Tax.

In 1991 a law was adopted in the form of a national VAT. At that point, it had a single rate of 28% between the CIS countries.

Since independence, the development of Kazakhstan’s economy and the improvement of tax legislation has been steady. Since 1995 the VAT rate has been gradually reduced from 20% to its current rate of 12%. As well, there are VAT exemptions for certain goods and services, for example, vehicles and agricultural machinery, medicines, medical devices, works and services performed and provided by a cinematographic organisation for the investor in the production of films, priority services in the field of information and communication technologies, financial services, and other services specified in the approved list.

During the pandemic, to support business, the state reduced the rate to 8% on socially important goods. And, on provision of priority services and goods in vulnerable sectors, including aviation and agro-industrial businesses, the rate was reduced to 0%. To date, the government has not indicated how long these reduced rates will apply.

Tolegen Kuandykov