Procedure and deadlines for the payment of income tax at the source of payment

2.4.1 Procedure and deadlines for the payment of income tax at the source of payment

Income tax withheld from the income of a nonresident legal entity at the source of payment shall be payable to the state budget:

1) on the amount of income paid – within five business days of the end of the month in which payment was effected;

2) on the amount of income accrued but not paid, when the income is taken as a deduction, within ten business days of the deadline established for the filing of a corporate income tax return.

The provision of this subitem shall not extend to interest on debt securities, the maturities of which fall after expiration of the deadline established by this subitem.

Tax agents shall be required to file a statement of income tax withheld at the source of payment with tax authorities where they are registered, on a quarterly basis no later than the 15^th of the month following the reporting quarter in which an obligation to withhold income tax at the source of payment occurred.

2.4.2 Provisions specific to the calculation and payment of income tax on capital gains from the realization of securities

A nonresident’s income from capital gains resulting from the realization of securities issued by residents shall be subject to taxation at the rate established under Article 180 of Tax Code, with the exception of capital gains from the realization of stocks and bonds that are on the stock exchange’s official “A” and “B” lists. The corporate income tax shall be calculated independently by the nonresident legal entity, the tax shall be payable within ten business days of the moment at which the income was received, and the filing of a corporate income tax return with the tax authority where the issuer is registered shall be required.

2.5 PROCEDURE FOR THE TAXATION OF INCOME OF NONRESIDENT LEGAL ENTITIES DOING BUSINESS IN THE REPUBLIC OF KAZAKHSTAN THROUGH A PERMANENT ESTABLISHMENT

The procedure for determination of the taxable income, and for the calculation and payment of the corporate income tax on a nonresident legal entity doing business in the Republic of Kazakhstan through a permanent establishment, shall be carried out in accordance with the provisions of Articles 79–135 of Tax Code of RK.

The income of a nonresident legal entity shall include all types of income related to the operation of the permanent establishment.

If a nonresident legal entity does business in the Republic of Kazakhstan that is analogous or similar to that which is performed through a permanent establishment, the income from that business shall be treated as income from doing business through the permanent establishment.

Expenses related directly to earning income from doing business in the Republic of Kazakhstan through a permanent establishment shall be deductible, regardless of whether they were incurred in the Republic of Kazakhstan or outside its borders, with the exception of expenses that may not be taken as a deduction in accordance with this Code.

A nonresident legal entity shall not have the right to deduct the following amounts charged to a permanent establishment in the form of:

1) royalties, honoraria, fees, and other payments for the use of or granting the right to use property or intellectual property of the given nonresident legal entity;

2) commission income for services;

3) interest on loans granted by the given nonresident legal entity;

4) expenditures not related to earning income from the nonresident legal entity’s operations in the Republic of Kazakhstan;

5) expenditures that are not documented;

6) management and general administrative expenses of the nonresident legal entity incurred outside the territory of the Republic of Kazakhstan.

2.5.1 Procedure for taxation of the net income of a nonresident legal entity from doing business through a permanent establishment

The net income of a nonresident legal entity from doing business in the Republic of Kazakhstan through a permanent establishment shall be subject to taxation at the rate of 15 percent. (Net income shall be understood to mean taxable income, less the amount of corporate income tax assessed.) The amount of tax assessed on net income shall be reflected in the corporate income tax return.

A nonresident legal entity shall be required to pay the tax on net income from doing business through a permanent establishment within ten business days of the deadline established for the filing of the corporate income tax return.

2.5.2 Procedure for taxation of the income of a nonresident legal entity in certain cases

The income of a nonresident legal entity that is not registered with a tax authority, which it has earned from doing business in the Republic of Kazakhstan through a permanent establishment, shall be subject to the income tax at the source of payment without any deductions.

The income tax withheld at the source of payment by a tax agent shall be credited against the discharge of the tax obligations of a nonresident doing business through a permanent establishment.