New taxation for online businesses – the so-called “Google Tax” will be effective from 1 January 2022.
Kazakhstan introduced new Tax Code section on taxation of foreign Internet companies selling to Kazakhstan.
As a legislative initiative from our previous review turned into enacted law we would like to show you bullet points on what’s new.
1. Who is considered as VAT Payers?
VAT payers - are foreign companies selling goods via online platforms and/or providing online services to individuals in Kazakhstan.
foreign company - a non-resident legal entity or another form of foreign business;
online platform - an Internet-based information system selling goods;
online sales of goods - a business activity of selling goods via online platforms to individuals;
online services - services provided to individuals via telecommunications network and Internet.
2. How to register as a VAT payer?
To be conditionally registered as a taxpayer in Kazakhstan, a foreign company sends a letter to the tax authority, stating its:
state registration number (or its equivalent);
tax registration number (or its equivalent), if any;
bank details to be used for VAT payment;
and postal details.
3. When will online companies be qualified as VAT Payers?
Online companies will be charged VAT if one of the following conditions is met:
the buyer's place of residence is Kazakhstan;
bank used by the buyer to pay for services, or the electronic money operator buyer used to pay for services is located in Kazakhstan;
the buyer's IP address used to buy the services is registered in Kazakhstan;
international country code of the telephone number (including mobile number) used for purchase or payment for services is assigned to Kazakhstan.
4. Is VAT Invoice to be issued?
The VAT payer is not required to issue VAT invoices for goods and services sold online.
5. How to pay VAT?
VAT is calculated at the rate of 12% from the tax base.
The VAT tax base is to be converted into tenge (Kazakhstan local currency) using the market exchange rate on the last working day preceding the date of receipt of the payment for goods and services.
VAT payment date to the budget is the day not later than the 25th day of the second month following the quarter in which the goods or services were sold.
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.