When Foreign Companies Must Pay Tax in Kazakhstan?

When Foreign Companies Must Pay Tax in Kazakhstan?

The State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan has published clarification on the taxation procedure for income of foreign companies that provide services outside Kazakhstan. This is important for Kazakhstani businesses because the customer in Kazakhstan most often acts as a tax agent and is responsible for withholding and paying tax at the source. Let’s break down when a non-resident’s income is subject to taxation in Kazakhstan — and when it is not.

 

When income of a non-resident is considered sourced from Kazakhstan

According to the Tax Code, a non-resident must pay tax in Kazakhstan if they receive income from sources in the Republic of Kazakhstan. The list of such income is defined in Article 644 of the Tax Code.

Income sourced from Kazakhstan includes, in particular:

1. Work and services performed on the territory of the Republic of Kazakhstan
   (Subparagraph 2, Paragraph 1, Article 644 of the Tax Code).
2. Certain types of services provided by a non-resident outside Kazakhstan, namely:
   managerial, financial, consulting, engineering, marketing, auditing, and legal services.
   These are directly listed in Subparagraph 3, Paragraph 1, Article 644 of the Tax Code and are considered income sourced from Kazakhstan even if performed abroad.

 

Withholding Tax: Rate and Procedure

If the activities of a non-resident do not lead to the creation of a permanent establishment (PE) in Kazakhstan, income sourced from Kazakhstan is:

• subject to corporate income tax (CIT) withheld at source;
• taxed without deductions (the tax is calculated on the gross income);
• taxed at a 20% rate.

In this case, the Kazakhstani customer becomes the tax agent and must:

• withhold tax when paying income to the non-resident;
• remit the tax to the state budget of Kazakhstan;
• file the required tax reports.

 

When income of a non-resident is not taxable in Kazakhstan

The Tax Code contains an important exemption. Under Subparagraph 11, Paragraph 9, Article 645 of the Tax Code, income from work and services performed entirely outside Kazakhstan is not taxable, except for income specified in Subparagraphs 3, 4, and 5 of Paragraph 1, Article 644 (i.e., certain special categories of income).

In simple terms, if both conditions apply:

• the non-resident provides services entirely abroad, and
• these services are not among the special types directly listed in Article 644 (e.g., management, consulting, etc.),

then such income is not considered taxable in Kazakhstan, and withholding CIT is not applied.

 

What this means for businesses in Kazakhstan

Kazakhstani companies working with foreign service providers must clearly understand where services are actually performed.

• If work or services are performed in Kazakhstan, the non-resident’s income will generally be treated as income sourced from Kazakhstan and taxed accordingly.
• If services are provided entirely abroad, companies must verify that they do not fall under the special taxable categories listed in Article 644.

It is also crucial to correctly classify services in contracts and documentation: misclassification can lead to tax reassessment, penalties, and fines. If income qualifies as income from Kazakhstani sources, the Kazakhstani company, acting as a tax agent, must withhold 20% CIT, pay it to the budget, and report it.

Double taxation treaties (DTTs) should also be considered. They may provide a reduced tax rate or exemption—but only if proper residency documentation is obtained from the non-resident.

How FChain Can Help

The FChain team supports Kazakhstani and foreign companies by:

• analyzing contracts with non-residents to determine whether income arises from sources in Kazakhstan;
• assessing whether the non-resident creates a permanent establishment in Kazakhstan;
• calculating and optimizing tax obligations under the Tax Code and international treaties;
• preparing recommendations for amending contracts and payment structures.

If you work with foreign service providers — or if you are a foreign company planning to serve clients in Kazakhstan — it is crucial to evaluate tax implications in advance.

Contact FChain for tailored advice and risk mitigation.

 For professional support, please contact us at almaty@f-chain.com or via WhatsApp at +7 771 214 1820

Changes in the Registration of Legal Entities 

Prepared by: Moldir Mukhtar
Business Development Specialist

FChain Kazakhstan
December 11, 2025