Taxation of Non-Resident Income in the Form of Interest under Corporate Income Tax - FCHAIN

Taxation of Non-Resident Income in the Form of Interest under Corporate Income Tax

Non-residents pay taxes in the Republic of Kazakhstan on income derived from sources within Kazakhstan in accordance with the Tax Code. Such income includes, among others, income in the form of remuneration, which is recognized as income from sources in the Republic of Kazakhstan. The term “remuneration” is applied in accordance with the definition established by Article 12 of the Tax Code.

 

Withholding Tax at Source

If the activities of a non-resident do not result in the creation of a permanent establishment (PE) in Kazakhstan, their income is subject to corporate income tax at the source of payment without deductions. The obligation to withhold and remit the tax lies with the Kazakhstani company acting as a tax agent.

 

CIT Rates at Source

The Tax Code establishes the following rates:

• 10% — on remuneration from loans (credits) and debt securities;
• 15% — on remuneration (except for loans and debt securities).

Thus:

• interest paid under a loan agreement to a foreign legal entity is taxed at 10%;
• other forms of remuneration are taxed at 15%.

The tax is withheld upon payment of income and remitted to the state budget of the Republic of Kazakhstan.

 

Priority of International Treaties

International double taxation treaties take precedence over the provisions of the Tax Code and may provide for a reduced tax rate or exemption. The application of such benefits is carried out in accordance with Article 706 of the Tax Code of the Republic of Kazakhstan, subject to the availability of supporting documents.

FChain provides accounting and tax services for businesses, including support for transactions with non-residents and proper withholding of CIT at the source of payment.

We offer:

• accounting services of any complexity;
• full tax support services;
• preparation and submission of tax reports;
• tax consulting services.

FChain is a reliable company delivering services with a focus on security, transparency, and minimization of tax risks.

 

When Foreign Companies Must Pay Tax in Kazakhstan?

 

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