Kazakhstan: Draft amendments in the Tax Code

The website of the Senate of the Republic of Kazakhstan posted a draft of amendments to the Tax Code of the Republic of Kazakhstan for 2024. Some of the amendments are traditionally retrospective and enacted from past periods. Here are some of the changes that are planned in the Tax Code:

Simplification of tax administration: A major reform is the abolition of the obligation for taxpayers to store cash and goods receipts for five years, under the condition that they utilize cash registers with data recording and transmission capabilities. Effective from January 1, 2024, this change is a move towards leveraging technological advancements to streamline tax compliance and reduce administrative burdens on businesses. It reflects a broader trend of digitalization in tax administration, aimed at enhancing efficiency and reducing paperwork.

Revised Criteria for Thematic Inspections: The Tax Code introduces a new basis for conducting thematic inspections, specifically targeting the determination of tax obligations through mutual settlements with taxpayers subject to restrictions under Article 120-1 of the Code. This amendment, which will take effect 60 calendar days after its official publication, underscores the government’s commitment to ensuring compliance and transparency in financial transactions. This is a clear indication of increased vigilance and oversight by tax authorities, particularly in transactions involving restricted taxpayers.

Amendments to Individual Income Tax: The reforms introduce new norms in individual income taxation, particularly by excluding certain types of income from being taxable. Notably, income generated from the termination of obligations under credit agreements (such as loans and microloans) will no longer be considered taxable personal income. This includes debt forgiveness, waived penalties, and fees, as well as payments made on behalf of the borrower for court fees. Set to be effective from January 1, 2024, these exemptions aim to reduce financial burdens on individuals and reflect a more socially responsive approach to taxation. This is particularly relevant in the context of financial hardships and the need for relief in debt settlements​.

Standardization of Declaration Submission Deadlines: The deadlines for submitting declarations on assets and liabilities are standardized to September 15th of the current year. This change, effective from January 1, 2024, aims to simplify and unify the tax filing process. It also includes a modification in the submission location for individual entrepreneurs, who will now submit their declarations at their place of residence instead of their place of business.

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