Amendments to Tax Code: Upper Limit Set for State Duty on Property Claims in Kazakhstan

The legal community has repeatedly pointed out to the Supreme Court of the Republic of Kazakhstan (the “RK”) that the state duty charged in Kazakhstan for filing a claim (1% of the claim by individuals, 3% of the claim by legal entities) is very high, as previously the law did not set the upper limit of the state duty. For example, in a $30 million claim, a legal entity would have to pay a state duty of $900,000.

At the beginning of this year, the Constitutional Court of the RK obliged the Government of the RK to submit to the Mäjilis of the RK, no later than three months after the publication of the Regulatory Resolution a corresponding draft law aimed at improving the legal regulation of the state duty payment in the courts.

On May 21, 2023, amendments to Article 610 of the Tax Code of the RK came into force, establishing the upper limit of the state duty to be paid when filing property claims.

In order to implement the Regulatory Resolution of the Constitutional Court of the RK, restrictions were introduced on the amount of state duty on property claims:

for individuals – 1% of the claim amount, but not more than 10,000 monthly calculation (34.5 million tenge);

for legal entities – 3% of the claim amount, but not more than 20,000 monthly calculation (69 million tenge).

Furthermore, the procedure for applying the rate on applications for review of judicial acts by the Supreme Court has been changed. As we know, previously when applying to the Supreme Court, a party had to pay a duty equal to 50% of the state duty that was paid when filing the claim. Thus, now the state duty rate is applied depending on the subject who filed the appeals. For instance, if the individual is a plaintiff when filing an appeal to the Supreme Court, he/she will have to pay 50% of the  state duty of 1%, which was payable upon filing a claim in the first instance. Whereas previously, if the plaintiff in a case is the legal entity, the individual had to pay 50% of the 3% paid by the legal person when filing a petition with the Supreme Court, rather than 1%.

Therefore, these amendments to the Tax Code could help to overcome the barrier to the implementation of the constitutional right to judicial protection.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please note that Kazakhstan is an emerging economy, and its legislation and legal system are in constant development. Should you have any questions or want to discuss matters addressed in this Client Update, please contact us.

1. Regulatory Resolution of the Constitutional Court of the Republic of Kazakhstan dated February 22, 2023 No. 3 "On consideration of Compliance with the Constitution of the Republic of Kazakhstan of subparagraph 1) of paragraph 1 and paragraph 2 of Article 610 of the Code of the Republic of Kazakhstan dated December 25, 2017. "On taxes and other mandatory payments to the budget" (Tax Code)"