A few weeks earlier, the Ministry of State Revenues issued tax instructions clarifying the determination and payment of taxes. The penalty for violation of foreign currency regulations constitutes 20 percent of the transaction amount. There are no limitations on the penalty amount to be charged. All Kazakhstan and foreign legal entities doing business through a permanent establishment must register with the tax authorities regardless of whether they will pay taxes in Kazakhstan or not. Depreciation is based on pooled asset accounts.
Most tax is withheld at the source of payment.
The tax applies to non-residents' income that is sourced in Kazakhstan only, and to residents' income worldwide, including interest, dividends, capital gains and other income. Taxable income from a Kazakhstan source includes income received under a contract for work or from provision of services, when performed in Kazakhstan, regardless of where it is actually paid. Foreigners paid locally will have their individual income tax withheld at the source of payment and sent to the Budget by the employers. Credit for VAT paid on inputs, including Capital investment, is offset against tax on sales. This change represents an important stimulus for the domestic light industry development.