There is an accrual method of taxation in the Republic of Kazakhstan. An accrual method is a tax accounting method according to which income and expenditures are recorded as of the moment the work is performed, services are provided, goods are shipped for the purpose of their realizationrealization, and property is received, regardless of the time of payment.
Statute of limitations for a tax obligation is extended to 5 year in comparison with a general term (3 years).
There are three tax regimes with respect to offshore business in Kazakhstan:
Usage of treaties for the avoidance of double taxation.
Taxation of an activity through a permanent establishment or caused as a result of receiving income from sources in the Republic of Kazakhstan.
Taxation of an activity without formation a permanent establishment.
By 2005 Kazakhstan ratified Conventions for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital with 35 states: Azerbaijan, Belarus, Belgium, Bulgaria, Canada, China, Czech, Estonia, France, Georgia, Germany, Great Britain, Hungary, India, Iran, Italy, Korea, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Pakistan, Poland, Rumania, Russia, Sweden, Switzerland, Tajikistan, the Netherlands, Turkey, Turkmenistan, Ukraine, USA, Uzbekistan. Besides, Conventions with Austria and Norway were ratified by Kazakhstan. Conventions with Finland, Malaysia, and Slovakia had been initialed in the Republic of Kazakhstan. Negotiations with Indonesia, Singapore, Sultanate Oman and Vietnam had been commenced. The process of preparation to commence negotiations with Armenia, Egypt, Greece, Jordania, Macedonia, Morocco, Qatar, Spain, Thailand and Yugoslavia is in progress at the moment.
FUTURE
The Republic of Kazakhstan currently modifies its tax legislation. In particular, there have been introduced amendments with respect to exemption from income tax for those who produce goods with a high added value. In April 2005, two draft laws on securitization were introduced for consideration. in Mazhilis, the Lower House of the Parliament. These amendments shall exempt a securitization cover from the taxpayer's annual income. Some amendments are going to be introduced with regard to special economy zones etc.
