Alteration in IPN Rating in Kazakhstan: Anticipated Development Explored
In a groundbreaking move, the Tax Code of Kazakhstan is set to impose a progressive individual income tax (IIT) on both residents and non-resident individuals. Yep, that's right, foreign folks too!
According to the latest updates, the Mazhilis of Parliament has adopted the new Tax Code in its second reading, which includes changes to value-added tax (VAT) and IIT for physical persons. The news suggests that non-resident individuals will pay the same rate as locals.
For the locals, the progressive IIT scale for non-resident individuals' income, according to the new Tax Code, will be 10% for up to 8,500 MCI and 15% above that. However, the specific rate for non-residents below 8,500 MCI remains unclear, though earlier proposals hinted at retaining a 10% rate for lower incomes. The changes are expected to take effect from 2026.
It's worth noting that, under the current Tax Code, foreign workers are taxed at the same rate as Kazakhstanis - 10%. So, it seems that the changes will be similar for both categories.
Moreover, a system called "staged transition" will be applied to IIT, which means that the increased rate will apply to the amount exceeding 33.5 million tenge.
As for the residents, the news proposes a 15% rate for annual income exceeding 8,500 MCI (roughly 33.4 million KZT or $63,841 in 2026). Below this threshold, the specific rate remains a mystery for now.
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Also, it's worth remembering that workers with a higher salary currently shoulder the highest taxes. However, the details about any changes to this rule are yet to be seen in the new Tax Code.
Now, you might be asking, "What about pensions?" Well, previously within the project of the new Tax Code, it was proposed to exempt pensions in Kazakhstan from tax. But whether this proposal has been included in the final version remains to be seen. Keep your eyes peeled for more updates!
- The new Tax Code in Kazakhstan will impose a progressive individual income tax (IIT) on both residents and non-resident individuals, which will have implications for finance and business, particularly in the realm of general-news.
- Non-resident individuals, similar to locals, will pay the same rate as residents under the new Tax Code.
- For local individuals, the progressive IIT scale will be 10% for up to 8,500 MCI and 15% above that, while the specific rate for non-residents below 8,500 MCI is yet to be clarified.
- The changes to the IIT, including the new rates, are expected to take effect from 2026.
- It's uncertain whether the proposed exemption of pensions from tax will be included in the final version of the new Tax Code, a development that could impact Kazakhstan's politics and general-news.
