Procedure for Offsetting and Refunding Overpaid Taxes - FCHAIN

Procedure for Offsetting and Refunding Overpaid Taxes

 

In the course of doing business or fulfilling tax obligations by individuals, situations often arise where an amount exceeding the actual tax liability is paid to the budget. Such overpayments may occur for various reasons, including calculation errors, duplicate payments, changes in tax obligations, or adjustments to reporting. In such cases, the legislation of the Republic of Kazakhstan provides a mechanism for offsetting or refunding overpaid amounts.

 

Legal regulation

The procedure for offsetting and refunding overpaid or erroneously paid taxes, budget payments, and penalties is governed by Articles 120–123 of the Tax Code of the Republic of Kazakhstan. These provisions establish a clear algorithm of actions for both taxpayers and state revenue authorities.

 

Definition of overpaid amount

An overpaid amount is defined as the positive difference between:

• – the amount actually paid to the budget (tax or penalty), and
• – the amount assessed or calculated for the respective obligation.

Amounts previously offset against other taxes or refunded to the taxpayer are also taken into account.

 

Grounds for refund or offset

It is important to note that a refund or offset is carried out only based on a taxpayer’s application. State revenue authorities do not process such transactions automatically, even if an overpayment exists in the taxpayer’s account.

 

Application procedure

To initiate a refund or offset, a tax application must be submitted in accordance with the form approved by Order No. 637 of the Minister of Finance of the Republic of Kazakhstan dated October 28, 2025.

The application can be submitted:

1. via the Taxpayer Cabinet (ISNA)
2. through the eGov.kz portal
3. via the e-Salyq Azamat mobile application (for individuals)
4. in paper form through the State Corporation “Government for Citizens”

Electronic submission is the fastest and most convenient option.

 

Terms and conditions for refund

Refunds are processed:

• – within 5 business days from the date of application registration
• – provided there are no outstanding tax liabilities

Funds are transferred to the taxpayer’s bank account указанного in the application. If a tax liability exists, the overpayment may be used to offset it.

 

Offset of overpayment

Instead of a refund, taxpayers may choose to offset the overpayment:

• – against future tax liabilities
• – to settle outstanding debts

This approach is convenient for businesses as it helps manage cash flow efficiently.

 

Practical recommendations

In practice, the procedure may involve certain challenges:

1. discrepancies in taxpayer accounts
2. the need for reconciliation with tax authorities
3. technical errors when submitting applications

To avoid delays or refusals, it is important to correctly complete the application and verify the absence of a tax liability in advance.

 

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Prepared by: Moldir Mukhtar

Business Development Specialist

FChain Kazakhstan

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