Kazakhstan will soon adopt a new tax code, with the bill currently in Parliament. It is expected that the new tax code will be adopted this year and come into force beginning 2026. This LawFlash summarizes the general provisions regarding taxation of dividends received by non-residents under the new tax code (the draft which is currently publicly available).
WITHHOLDING TAX
Dividends paid to non-residents are subject to withholding tax at the source of payment (Articles 679.1(11), 683.1). The obligation to withhold taxes rests with the payor (the Kazakhstan company paying dividends). This concept will be preserved by the new tax code.
TAX RATE
The (general) tax rate on dividends is 15% (Article 681.1(5)); however:
- The tax rate increases to 20% if the recipient is a resident of a tax offshore (e.g., BVI, Seychelles) (Article 682.2).
- The tax rate decreases to 5% if the recipient holds ≥25% shares in the Kazakhstan company paying dividends (Article 682.1(6)). This reduced tax rate applies to dividends in the amount up to 230,000 monthly calculated indices (approximately $1,750,000), and the standard rate of 15% applies to any amount above this threshold.
The 5% tax rate is novel.
EXEMPTIONS
There are certain exemption from dividends tax and reduced tax rates—for example, full exemption for companies listed on a Kazakhstan stock exchange (Article 681.1(7)), provided there were active trades; a 5% tax in respect of participants of Astana Hub (Article 17, 682.(3)); and a full exemption (until 2066) for companies registered at the Astana International Financial Centre (under a special Constitutional Law).
Bilateral tax treaties may also provide for a reduced tax rate; however, the tax rate on dividends does not usually fall below 5% under a tax treaty.
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