Kazakhstan: Changes regarding VAT from 2018

Since January 1, 2018, a new tax code has been effective in Kazakhstan. In general, most of the provisions related to VAT did not change significantly compared to the previous tax code. However, there are some minor clarifications and changes that were introduced in the new tax code:

VAT registration

The previous tax code provided two options for taxpayers to register for VAT purposes – of necessity or voluntarily. A taxpayer had a mandatory obligation to register when its turnover exceeded 30,000 monthly calculation index (MCI). This threshold (30,000 MCI) remained in the new tax code (in the previous tax code, the government had planned to reduce the 30,000 MCI threshold down to 25,000 MCI in 2018, 20,000 MCI in 2019 and 15,000 MCI in 2020).

The timeframe for VAT registration is reduced to one day and taxpayers will be VAT payers from the date when the application was submitted. Prior to these changes taxpayers could become VAT payers only from the first of the following month after the application was submitted. In addition, for the purposes of VAT registration the previous requirements to provide the tax authorities with documents that served as evidence of the company’s location (for instance, rental/lease agreements for office space) and evidence that turnover exceeded 30,000 MCI have been abolished now.

Invoice issuance

Beginning from January 1, 2018, legal entities that are under monitoring (large Kazakhstani taxpayer legal entities that are monitored by tax authorities) bear the obligation to issue e-invoices and beginning from January 1, 2019, all VAT taxpayers will be obliged to issue e-invoices.

Restrictions for VAT deductions

Some minor clarifications have been introduced to the article of the tax code that regulates situations when input VAT cannot be deducted, i.e. when there is no date, number of invoice, no identification number, etc.

VAT refund

Changes were introduced in order to optimize VAT refunds:

• no cross-check tax audit of suppliers that issue e-invoices;
• time limitation for VAT refund is reduced to 30 business days (regular time limitation is 55 business days or 155 calendar days depending on certain requirements) when the following conditions are met: 100% issuance of e-invoices; not located in the “risk zone”, all suppliers issue e-invoices.