Mobile Cash Transfers: What You Need to Know?

You may have already heard that starting from 2022 banks [1] will be sharing the information on bank cash transfers between the individuals with the tax authorities.

For those concerned and interested, we have prepared Q&As on this matter and hope you find this information useful, interesting and relevant.

- In which cases banks share the information on individuals' bank cash transfers with the tax authorities?

- In cases when banks detect transactions in personal bank accounts of individuals that have signs of an entrepreneurial activity.

- How would we know that transactions have such signs?

- The established criterion is receipt of cash by one individual on his/her personal bank account from 100+ different people during each of 3 consecutive months.

- Do banks currently share the information on all individuals?

- No, depending on the category of individuals, sharing the information on the cash receipts with the tax authorities will be done gradually.

From 1 January 2022, banks will only be obliged to share the information on cash transfers of state servants and individuals of equivalent status, as well as their spouses. [2]

The second phase will begin on 1 January 2023 when the tax authorities will additionally collect information on transfers of public sector employees, employees of quasi-public sector, and their spouses. [3]

Then, from the beginning of 2024, the above-mentioned categories of individuals will be expanded to include heads and shareholders of companies, individual entrepreneurs, as well as their spouses. [4]

- When the information on all Kazakhstan individuals will be shared?

- Banks will be monitoring and providing information to the tax authorities on the remaining categories (on all individuals) in the fourth phase, i.e. from the beginning of 2025.

- How the communication process is being set up between the tax authorities and the banks?

- Briefly, the process is as follows: tax authorities -> banks -> tax authorities.

The tax authorities will first compile a list of individuals covered by each stage, which then will be sent to the banks with a request of information on their transactions that have signs of receiving income from entrepreneurial activities.

Then, within 30 working days of receiving the request, banks will provide the tax authorities with the processed information on such transactions.

At the same time, it should be noted that this information will only include individuals as recipients of cash, i.e. information on senders and amounts shall not be disclosed to the tax authorities.

Information contained in this Client Update is general 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. Banks and banking organizations
2. Subpara. 1) of Article 5-1 of the Law of the Republic of Kazakhstan No. 121-VI dated 25 December 2017 "On Enactment of the Code of the Republic of Kazakhstan "On Taxes and Other Obligatory Payments to the Budget" (Tax Code) (with amendments and additions as of 01.01.2022) (hereinafter - the Law)
3. Subpara. 2) of Article 5-1 of the Law
4. Subpara. 3) of Article 5-1 of the Law