PROCEDURE FOR TAXATION OF THE INCOME OF NONRESIDENT INDIVIDUALS

2.6 PROCEDURE FOR TAXATION OF THE INCOME OF NONRESIDENT INDIVIDUALS

 The income of a nonresident individual, as defined above, which is not related to a permanent establishment of said individual, should be subject to taxation at the source of payment following the procedure and within the deadlines specified by the provisions of Articles 179–181 of Tax Code of RK, with the exception of:

1) income from individual entrepreneurial activity through a permanent establishment in the Republic of Kazakhstan;

2) interest on bank deposits;

3) payments related to the delivery of goods onto the territory of the Republic of Kazakhstan under foreign trade transactions;

4) capital gains from the realization of securities;

5) income from operations with government securities;

6) interest accumulated (accrued) on debt securities at the time of their purchase, paid by resident buyers (not issuers) to nonresidents.

The obligation and responsibility for the calculation and withholding of the income tax at the source of payment, and for payment of the tax to the state budget, shall be assigned to the person paying the income (including a nonresident doing business in the Republic of Kazakhstan through a permanent establishment). Such a person shall be recognized as a tax agent in accordance with item 1 of Article 10 of Tax Code of RK.A nonresident shall be recognized as a tax agent as of the moment said person begins doing business in the Republic of Kazakhstan, if its period of operation exceeds that established for the creation of a permanent establishment. The income tax shall be withheld at the source of payment by a tax agent regardless of the form and place of payment of the income.

Filing of tax reports

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 within the deadlines established under Article 182 of Tax Code of RK.

2.6.1 Procedure for calculation and payment of the income tax on a nonresident individual whose activities lead to the creation of a permanent establishment

 A nonresident individual who is engaged in individual entrepreneurial activity in the Republic of Kazakhstan through a permanent establishment shall be a payer of the individual income tax with regard to income related to said activity, less deductions directly tied to this income, with the exception of expenses that are not deductible in accordance with item 5 of Article 184 and the provisions of Tax Code. Dependent personal services (work for hire) provided by a nonresident individual shall not lead to the creation of a permanent establishment of said individual.

2.6.2 Procedure for the taxation of a nonresident individual’s income in certain cases

 The income earned by a nonresident individual from sources in the Republic of Kazakhstan that is not subject to the income tax at the source of payment and that is not related to a permanent establishment of said individual, including capital gains from the realization of securities issued by residents, shall be subject to taxation, without taking any deductions, at the rates established under Article 180 of Tax Code. Capital gains from the realization of stocks and bonds that are on the stock exchange’s official “A” and “B” lists shall not be subject to taxation. The calculation and payment of the individual income tax shall be performed by a nonresident individual independently within the deadlines established under item 5 of Article 191 of Tax Code.

2.6.3 Procedure and deadlines for prepayment of the individual income tax

The following nonresident individuals shall pay the individual income tax by making prepayments:

1) nonresident individuals earning income from individual entrepreneurial activity in the Republic of Kazakhstan through a permanent establishment;

2) nonresident individuals earning income defined under subitems 14)–17) of Article 178 of Tax Code, including other income defined under Articles 149–151 of Tax Code, with the exception of income subject to the income tax at the source of payment.

Prepayments of the individual income tax for the period of operation shall be made by a nonresident individual mentioned above, following the procedure and within the deadlines established by Tax Code. The amount of prepayments of the individual income tax, which are payable in equal installments during the period that a nonresident is doing business in the Republic of Kazakhstan, shall be determined on the basis of the amount of tax indicated in a statement of the anticipated amount of individual income tax. Nonresident individuals referred to in subitem 2) shall be required to attach to the statement of the anticipated amount of individual income tax an individual labor agreement (contract) or other agreement of a civil-legal nature confirming the declared amount of taxable income. Prepayments that are made shall be credited against the payment of the individual income tax owed by a nonresident individual for the current tax period. A final settlement and payment of individual income tax shall be effected within ten business days of the date an individual income tax return for the tax period is filed, but not later than ten business day prior to departure from the Republic of Kazakhstan.