PIT and Tax Deductions: Proposed Changes from 2027 - FCHAIN

PIT and Tax Deductions: Proposed Changes from 2027

Kazakhstan is considering changes to the procedure for calculating personal income tax (PIT) and applying tax deductions. The relevant amendments are included in the draft law on amendments and additions to the Tax Code. The draft is open for public discussion until September 25, 2026. The draft introduces a new approach to calculating PIT by tax agents, clarifies the rules for applying the basic and social tax deductions, and establishes separate procedures for dividends and income received by members of boards of directors. According to Article 2 of the draft law, the law is expected to enter into force on January 1, 2027, while certain provisions are scheduled to take effect from January 1, 2035. The final effective dates will depend on the adopted version of the law and the procedure for its implementation.

 

Cumulative Calculation of PIT

One of the key proposed changes concerns the procedure for calculating PIT by a tax agent. Currently, Article 441 of the Tax Code regulates the calculation of tax on employee income. The draft proposes extending this procedure to other income taxable at the source of payment, with the exception of dividends, for which a separate calculation method is proposed. Under the proposed approach, the tax agent will calculate PIT based on the total taxable income of an individual received from that tax agent, on a cumulative basis from the beginning of the calendar year. Therefore, tax will not be calculated separately for each type of income but will instead take into account the aggregate amount of taxable income. Dividends will not be included in this calculation.

 

Unified Procedure for Determining Taxable Income

The draft also proposes amendments to Article 439 of the Tax Code and introduces a unified sequence for determining income taxable at the source of payment, excluding dividends. The calculation will take into account the total amount of income taxable at the source of payment and accrued during the tax period. This amount will then be reduced successively by income subject to reduction under paragraph 1 of Article 400 of the Tax Code, the tax deduction for social payments, the basic tax deduction, and social tax deductions. Eligibility for specific deductions will be determined in accordance with Article 437 of the Tax Code. For example, if an employee receives a monthly salary of KZT 500,000 and remuneration of KZT 200,000 under a civil law contract, the tax agent will first determine the aggregate income of KZT 700,000. The applicable reductions and tax deductions will then be applied successively to the total amount. In this case, the basic tax deduction will be applied once to the aggregate income.

 

Calculation of PIT from the Beginning of the Calendar Year

According to the proposed wording of Article 441 of the Tax Code, the tax agent will determine the total taxable income of an individual from the beginning of the calendar year through the current tax period. The relevant rates specified in subparagraph 1) of Article 363 of the Tax Code will be applied to income within the established threshold and to the amount exceeding that threshold. PIT already calculated for previous tax periods of the same year will then be deducted from the resulting amount. The calculation will include income receivable by the individual from the same tax agent.

 

Separate Procedure for Calculating PIT on Dividends

The draft establishes a separate procedure for determining taxable income from dividends. Under the proposed amendments, dividends accrued during the tax period will be taken into account after deducting income subject to reduction under subparagraph 13) of Article 436 of the Tax Code and applicable social tax deductions. A separate formula is proposed for calculating PIT on dividends using the rates specified in subparagraph 3) of Article 363 of the Tax Code. Similar clarifications are proposed for the taxation of dividends on which an individual calculates tax independently.

 

Application of the Basic Tax Deduction

The draft clarifies the types of income to which a tax agent may apply the basic tax deduction. Under the proposed amendments to Article 437 of the Tax Code, this deduction will apply when determining an employee’s taxable income as well as taxable income from the sale of goods, works, and services, including income under civil law contracts. The basic tax deduction will not apply to other types of income taxable at the source of payment.

 

Social Tax Deductions through Multiple Tax Agents

Another proposed change concerns the possibility of applying a social tax deduction through multiple tax agents. To do so, an individual will need to submit an application specifying the amount of the deduction to be applied by each tax agent. The total amount of the social tax deduction applied by all tax agents must not exceed the limit established for the relevant category under paragraph 1 of Article 404 of the Tax Code.

 

Carryforward of Unused Tax Deductions

The draft establishes different rules for basic and social tax deductions. An unused amount of a social tax deduction may be carried forward to subsequent tax periods within the same calendar year and applied against taxable income. No such carryforward is proposed for the basic tax deduction. Any excess basic tax deduction for the relevant tax period will not be carried forward and will be treated as zero.

 

Late Application for a Social Tax Deduction

The proposed amendments also provide an opportunity to claim a social tax deduction after PIT has already been withheld. If the tax agent did not apply the deduction because the individual submitted the request after the tax had been calculated, the application and supporting documents may be submitted either in the year in which the income was accrued or in the following calendar year. The documents must be submitted to the tax agent that calculated PIT on the relevant income. If the applicable requirements are met, the tax agent will recalculate the taxable income. For example, if income was accrued in 2027 but the individual applied for a social tax deduction after PIT had already been calculated, the relevant documents may be submitted to the same tax agent during 2027 or 2028. The deduction will be applied if the individual has the relevant grounds relating to the year in which the income was accrued.

 

Taxation of Income Received by Members of Boards of Directors

The draft proposes classifying income received by a member of a board of directors or another governing body of a legal entity that is not its supreme governing body as a separate type of income. For this purpose, members of boards of directors are proposed to be excluded from the definition of an “employee,” while separate Articles 396-1 and 427-1 are to be introduced into the Tax Code. The taxation procedure will depend on who pays the income. If the income is paid by a tax agent, PIT will be withheld at the source of payment under the general rules of Article 441 of the Tax Code, while the basic tax deduction will not apply. If the income is received from a person that is not a tax agent, the individual will calculate the tax independently in accordance with Article 405 of the Tax Code. Where the income is accrued by a legal entity acting as a tax agent, its amount will be determined based on the amount accrued pursuant to decisions of the governing bodies and recognized as expenses in the accounting records. Where the relevant grounds exist, social tax deductions may be applied to the income of board members, subject to the limitations established by Article 404 of the Tax Code.

 

Clarifications for Individual Entrepreneurs

The proposed amendments also affect the procedure for determining the taxable income of individual entrepreneurs under the general taxation regime. According to the proposed wording of paragraph 2 of Article 411 of the Tax Code, income specified in paragraph 1 of Article 400 will reduce taxable income only if such income has been included in the individual entrepreneur’s total income. The draft also proposes establishing that only a positive amount will be taken into account when determining taxable income on which an individual calculates tax independently.

 

What the Proposed Changes Mean for Tax Agents

The proposed amendments change the approach to calculating PIT and applying tax deductions. Tax agents will need to take into account an individual’s aggregate taxable income received from the same tax agent on a cumulative basis from the beginning of the calendar year, as well as comply with separate rules governing basic and social tax deductions. Particular attention will need to be paid to income under civil law contracts, dividends, applications for social tax deductions, and income received by members of boards of directors. At this stage, however, these are proposed legislative amendments that remain under discussion. The final procedure for calculating PIT, applying tax deductions, and the effective dates of the relevant provisions will depend on the final version of the law as adopted.

 

FChain Accounting, Tax, HR and Legal Services

Changes to IIT calculation rules directly affect the calculation of individuals’ income, the application of tax deductions, and companies’ obligations as tax agents. FChain provides professional accounting, tax, HR, and legal support for businesses in Kazakhstan.

• Accounting and tax services — accounting and tax record-keeping for companies, including the accounting of individuals’ income and related tax obligations.
• Payroll services — calculation of salaries, IIT, and mandatory payments related to employee remuneration.
• HR Services — administration of HR processes and documentation related to employment relationships and employee onboarding.
• Employer of Records — employment and ongoing administration of personnel within the applicable service arrangement.
• Legal support for business — consultations on Kazakhstan legislation and legal support for business operations in accordance with applicable requirements.
• Drafting contracts — preparation and legal support of contractual documentation, including agreements related to engaging individuals.

FChain’s comprehensive services enable companies to organize their accounting, tax, and HR processes systematically and take legislative changes into account when fulfilling their obligations as tax agents.

 

New PIT Rates for Non-Residents in Kazakhstan in 2026

Prepared by: Anel Kosmaganbetova

Assistant to the Director

FChain Kazakhstan

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