Sign up for tax alert emails GTNU homepage Tax newsroom Email document Print document Download document | |||
January 10, 2022 Kazakhstan | VAT obligations for nonresidents engaged in the e-commerce sale of goods and providing digital services to individuals enter into force on 1 January 2022 The new Section 25 of the Tax Code of the Republic of Kazakhstan (RK), “Aspects of taxation of foreign companies engaged in the electronic trade in goods and provision of services in electronic form to individuals,” entered into force on 1 January 2022 (with some recent amendments). According to the new section, a nonresident legal entity carrying out electronic trade in goods or providing services to individuals in electronic form will be required to register “conditionally” in the RK as a value-added tax (VAT) payer and to calculate and pay VAT on services whose place of supply is the RK. The basic definitions used in Section 25 of the Tax Code are:
For “conditional” registration as a VAT payer, a foreign company must mail a paper confirmation letter to the Kazakhstan tax authorities with the following details:
A foreign entity must assess VAT liability when carrying out electronic trade in goods and providing services in electronic form to individuals if one of the following conditions is met:
Foreign entities will not be required to issue Kazakhstan’s statutory VAT invoices for electronic trade in goods or provision of services in electronic form to individuals. VAT will not be assessed on electronic trade in goods or the provision of services in electronic form to individuals if:
The value of goods sold in electronic form and electronic services provided to individuals in foreign currency must be converted into tenge (Kazakhstan’s local currency) at the market exchange rate set on the last working day preceding the date of receipt of payment for the goods or services. A foreign entity must pay the assessed VAT no later than the 25th day of the second month following the quarter in which goods and services were sold. The Law, as signed on 20 December 2021, contains additional amendments to the tax legislation of the RK regarding VAT obligations in Kazakhstan for nonresidents carrying out electronic trade in goods and providing services to individuals in electronic form:
The Law also introduces the following definition in the new Section 25 of the Tax Code of the RK:
Also, for “conditional” registration as a VAT payer, a foreign entity must mail a paper confirmation letter to the Kazakhstan tax authorities with, among other things, a list of details including merchant ID data used for the receipt of payments and/or money transfers. Additionally, the Law states that VAT will not be assessed or paid for electronic trade in goods or provision of services in electronic form to individuals:
EY Kazakhstan is able to assist taxpayers at the preparatory stage as well as in analyzing a company’s activities to identify transactions that may result in the obligations outlined above. _________________________________________ For additional information with respect to this Alert, please contact the following: Ernst & Young Kazakhstan LLP, Almaty
| |||