From 1 January 2022, digital sales of goods and services by foreign entities to private individuals (B2C) in Kazakhstan will be subject to 12% VAT. As such, foreign suppliers will be obliged to register for VAT if all the requirements are met and will need to pay quarterly VAT in Kazakhstan. Input VAT related to the transactions will not be recoverable in Kazakhstan.
Foreign entities that supply digital sales of goods and services via the internet and/or telecommunication networks to private individuals in Kazakhstan will be regarded as VAT taxpayers. The supply of digital goods and services by such foreign entities to private individuals in Kazakhstan will be subject to 12% VAT.
The 12% VAT should be applied to the cost of goods/services sold in electronic form (i.e. added to the transaction). The cost of goods sold in electronic form or the services supplied to individuals in foreign currency will be converted into KZT using the market exchange rate determined on the last business day preceding the date of receipt of payment for the goods/services.
Foreign entities that are considered to be taxpayers for Kazakhstan VAT need to register for VAT in Kazakhstan and need to remit VAT on a quarterly basis.
A foreign entity can register for VAT in Kazakhstan by sending a hard-copy letter to the State Revenue Committee containing the following information:
Report and remit VAT
A foreign company subject to VAT in Kazakhstan needs to remit VAT on a quarterly basis to the Kazakhstan tax authorities but does not need to submit VAT returns in Kazakhstan. VAT is due on the 25th of the second month following the reporting period (i.e. a calendar quarter). Foreign currencies should be converted using the Kazakhstan National Bank Exchange rate determined on the last business day preceding the date of receipt of payment for the goods/ services.
Foreign companies electronically providing goods and services to private individuals in Kazakhstan do not have any reporting obligation and are not required to issue VAT invoices.
In addition, VAT is not due on goods and services supplied electronically if the value of the goods and services is included in the official import value and import VAT has been paid on that amount.
According to the Kazakhstan Tax Code provisions, which will be effective from 1 January 2022, the general definition of electronically supplied goods and services is as follows:
If one of the following conditions is met, then the VAT-payer should assess VAT for the value of the goods sold electronically/services supplied in electronic form:
Whether the service is VAT taxable in Kazakhstan depends, among other things, on the recipient’s location. The place of supply of the electronically supplied goods and services can be determined based on any of the following information:
A customer (i.e. a private individual) is considered to be located in Kazakhstan if any one of these conditions is met.
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