Global Daily Tax News, Kazakhstan Tweaks Tax Reform Plans, (Nov 10, 2025)

Kazakhstan's Government has decided to expand access to the special tax regime based on a simplified declaration, following criticism from businesses.

Changes to the simplified tax regime were announced as part of the nation's Tax Reform Law, which is intended to overhaul the country's tax regime from January 1, 2026.

The Government has now decided that the list of prohibited activities for accessing the regime should be reduced from 795 to 44.

Other changes in the tax code are intended to ensure that only businesses that transact with consumers may access the regime, which features a concessionary three percent rate of tax. While business-to-business transactions are permitted, the supplier may not claim deductions for the supply if the recipient business is taxed under the special tax regime. This has raised concerns about distortions to business decisions.

Alongside the decision to significantly expand access to the regime, the Government said it is working to implement changes to more than 240 bylaws and enact 98 legal acts to introduce the broader changes in the Tax Reform Law.

Approved in July 2025, the law provides for a 20-percent reduction in the number of taxes as well as a 30-percent reduction in the tax reporting burden.

Under the law, the headline corporate tax rate will remain 20 percent but new rates will be introduced for specific taxpayer groups. A 25 percent rate will apply to gaming businesses, and to banks, except for income from lending to business entities. The rate for "social sector organizations" will be five percent in 2026 and will rise to 10 percent in 2027. The three-percent preferential rate for agricultural producers will remain.

Tax breaks will be improved for mining and exploration activities, including a five-year mineral extraction tax exemption for low-prospect sites.

The legislation will raise the value-added tax rate from 12 percent to 16 percent from January 1, 2026, and establish a five-percent reduced rate of value-added tax on medicines and medical services. This rate will be raised to 10 percent from 2027.

Exemptions will be provided for certain government-provided free medical services and for the publication of printed media, while periodicals will be liable to a 10 percent rate.

The VAT registration threshold is to be lowered to KZT40m (USD75,150).

A progressive personal income tax system will be introduced, with a 15-percent rate applying to gross annual income exceeding 8,500 monthly calculation indices (KZT33.42m, or about USD63,875). The same 15-percent rate will apply to entrepreneurs with dividends or income exceeding KZT904.3m.

Pension payments from the Unified Pension Savings Fund (UPSF) will be exempt from personal income tax.

A new 10 percent excise tax will be introduced on luxury, expensive purchases, including cars, ships, alcohol, and tobacco products. In addition, property tax will be raised for real estate worth more than KZT450m.

The changes will typically become effective from January 1, 2026.