Horizontal Monitoring of Taxpayers: Changes Effective October 27, 2026 - FCHAIN

Horizontal Monitoring of Taxpayers: Changes Effective October 27, 2026

Starting October 27, 2026, amendments to the rules governing horizontal monitoring of taxpayers will come into effect in Kazakhstan. The amendments were introduced by an order of the Minister of Finance of the Republic of Kazakhstan, modifying Order No. 520 dated September 22, 2025, “On Certain Issues of Horizontal Monitoring.” The changes affect requirements for taxpayers’ data showcases, disclosure of tax information, internal control systems (ICS), and procedures for interaction with the State Revenue Committee (SRC). These changes are particularly relevant to large companies already participating in horizontal monitoring or planning to join the program.

 

New Requirements for Taxpayers’ Data Showcases

One of the key changes concerns the requirements for establishing and operating data showcases used in horizontal monitoring. The term “information system” has been replaced with “digital system” in the regulatory provisions. A data showcase may operate as a standalone digital system integrated with the taxpayer’s accounting systems or as an additional module within an existing system. The accounting system must support the collection, recording, and processing of information on the company’s assets, liabilities, equity, and business transactions for the preparation of financial, tax, and other reports. Starting January 1, 2027, data showcases will be required to integrate with the Integrated Tax Administration System (ISNA) and the electronic invoice system. Integration will be subject to successful testing for compliance with digitalization and cybersecurity requirements. Additionally, data showcases must support the conversion of tax returns into XML format for subsequent submission to ISNA.

 

Cybersecurity and Tax Information Protection Requirements

The updated rules introduce additional requirements for ensuring the security of data showcases. Their operation must comply with Kazakhstan’s unified digitalization and cybersecurity requirements, including the protection of confidential information and ensuring data availability. Remote access to data showcases is permitted through a virtual private network (VPN), without a VPN, or through other methods that comply with Kazakhstan’s digital legislation. Data showcases must also provide data backup capabilities and mechanisms to ensure that digital resources are promptly updated and restored following technical failures. For companies participating in horizontal monitoring, reliable digital infrastructure is particularly important, as it ensures that tax authorities can access the necessary information.

 

Changes to Tax Reporting Disclosure Requirements

The amendments establish updated minimum requirements for disclosing information from the value-added tax (VAT) declaration, Form 300.00, and the calculation of current payments for the use of land plots, Form 851.00. For VAT declarations, a four-level disclosure structure is required, ranging from individual tax return line items to the corresponding primary supporting documents. Each line item has specific requirements regarding information from tax registers, accounting registers, and primary documentation, as well as the procedures for presenting this information in the data showcase. Companies operating in the energy sector are additionally required to disclose unit prices. For Form 851.00, information must be disclosed at two levels: tax reporting and tax registers. Furthermore, the requirements for presenting monetary amounts relating to certain taxes and payments have been clarified. These include excise taxes, signature bonuses, alternative subsoil use tax, payments for the use of water resources, and payments for negative environmental impact. The relevant amounts must be stated in Kazakhstani tenge (KZT).

 

Updated Internal Control System Requirements

Significant changes have been introduced to the documentation used for assessing tax risks and organizing control procedures. New forms have been approved for the taxpayer’s risk register and the register of control procedures. When preparing the risk register, companies must specify the type of risk: methodological, arithmetic, or process-related. They must also identify the relevant provisions of tax legislation, the type of tax, the tax return line code, the probability of the risk occurring, its potential financial impact expressed in thousands of tenge, and the assigned risk category. Risk probability assessments must consider previous occurrences of similar situations, changes in the company’s activities and business processes, and amendments to Kazakhstan’s legislation. The register of control procedures must specify the type and frequency of each control, the method of implementation, the digital system used, supporting documentation, the responsible department, and the position of the employee performing the procedure. Controls may be performed manually, through IT-dependent processes, or automatically. These changes emphasize the importance of a systematic approach to tax control, proper documentation of business transactions, and the timely identification of potential violations.

 

Which Transactions Must Be Disclosed to Tax Authorities?

Participants in horizontal monitoring are required to provide the SRC with information on certain material business transactions that meet the established monetary thresholds.

Transactions subject to disclosure when their value exceeds 0.1% of total annual income, but is not less than KZT 1 billion, include:

1. One-time write-offs of inventories due to damage or loss.
2. Recognition of losses.
3. Offsetting of mutual obligations with counterparties.
4. Transactions involving constructive dividends.
5. Major transactions involving the acquisition of goods, works, and services.

Separate disclosure requirements apply to dividend payments or offsets exceeding 1% of total annual income, but not less than KZT 10 billion. Information on penalties exceeding KZT 1 billion for violations of tax legislation must also be disclosed. In addition to financial transactions, participants must notify the SRC when transitioning to new digital accounting or tax systems or implementing additional modules that affect tax accounting.

 

Procedures for Interaction with the SRC and Deadlines for Responding to Recommendations

The forms of recommendations and notices issued by the State Revenue Committee following horizontal monitoring have been updated. Upon receiving a recommendation concerning compliance with tax obligations, taxpayers must respond within 30 business days. If the company agrees with the identified violations, it must submit an additional tax return. If it disagrees, it must provide an explanation. The same deadline applies to recommendations aimed at improving the internal control system. In such cases, taxpayers must submit a letter specifying the timeframe for implementing the proposed measures or provide a reasoned explanation.  If a participant disagrees with a reasoned decision concerning tax obligations or fails to comply with it, a thematic tax audit will be conducted. If a decision concerning the internal control system is disputed or not implemented, the SRC will refer the issue of terminating the horizontal monitoring agreement to the Advisory Council.

 

Conditions for Participation and Termination of Horizontal Monitoring Agreements

One of the eligibility criteria for concluding a horizontal monitoring agreement remains the required amount of tax and social payments. For the calendar year preceding the application, the total amount of taxes, other mandatory budget payments, and social contributions paid, excluding VAT refunds, must be at least KZT 5 billion. The amendments also clarify the procedure for notifying taxpayers of agreement termination. The SRC may deliver such notices in person, by registered mail, or electronically through its digital systems. Following termination of participation in horizontal monitoring, taxpayers must continue providing the SRC with access to their data showcases and remote access to accounting systems covering the period of participation, within the statute of limitations established by tax legislation. Both parties must maintain the confidentiality of information obtained and may not disclose it without the other party’s prior written consent, except where otherwise provided by the laws of the Republic of Kazakhstan.

 

What Do These Changes Mean for Businesses?

The updated horizontal monitoring rules introduce stricter requirements for tax accounting transparency, the quality of internal controls, and the reliability of information provided to tax authorities. Particular attention is given to ensuring consistency between tax returns, accounting registers, and primary supporting documents, as well as the timely identification and assessment of tax risks. Companies participating in horizontal monitoring must consider the new requirements when organizing accounting processes, preparing control documentation, and configuring digital systems. Timely verification of data completeness, tax reporting accuracy, and the effectiveness of internal procedures can reduce the likelihood of discrepancies and ensure proper interaction with tax authorities.

 

FChain Kazakhstan’s Professional Services for Businesses

The changes to horizontal monitoring rules require companies to pay particular attention to accounting and tax compliance, documentation, and adherence to legal requirements. FChain Kazakhstan provides comprehensive accounting and legal services designed to support the accuracy of accounting records, identify potential risks, and ensure that internal business processes comply with applicable regulatory requirements. Depending on business needs, FChain offers the following professional services:

• Accounting and tax services — maintenance of accounting and tax records, preparation of reports, and accurate recording of business transactions required for the disclosure of tax information.
• Accounting Recovery — identification and correction of accounting errors, restoration of supporting documentation, and reconciliation of accounting registers to ensure accurate financial records.
• Legal support for business — legal assistance concerning the application of tax legislation, compliance with statutory obligations, and interaction with government authorities.
• Legal audit — review of company operations and documentation to identify legal risks associated with regulatory compliance.
• Legal services — professional legal advice on the legislation of the Republic of Kazakhstan, including legal aspects of tax administration and business operations.
• Drafting contracts — preparation and legal review of contractual documentation to ensure proper documentation of business transactions and minimize contractual risks.

FChain Kazakhstan provides professional accounting and legal services focused on maintaining accurate accounting records, ensuring compliance with tax legislation, and minimizing legal and financial risks. Comprehensive business support enables companies to maintain reliable accounting information, identify potential violations in a timely manner, and align internal processes with applicable regulatory requirements. The updated horizontal monitoring rules raise the standards for tax reporting transparency, internal control quality, and digital accounting processes. In this context, timely preparation of documentation, effective oversight of tax obligations, and sound risk management become increasingly important. Compliance with the new requirements will enable companies to maintain appropriate interaction with tax authorities and reduce the risk of tax violations.

 

Republic Day of Kazakhstan – October 25

Prepared by: Anel Kosmaganbetova

Assistant to the Director

FChain Kazakhstan

 📩almaty@f-chain.com
WhatsApp: +7 771 214 1820