A. Update
Starting January 01, 2021, the government of Kazakhstan has levied Obligatory pension contributions under Article 3 of the Pension Agreement for Working Population of the EAEU Member States dated December 20, 2019.
The Article provides that an employer who has attracted employees from the EAEU countries (Kazakhstan, the Republic of Armenia, the Republic of Belarus, the Russian Federation and the Kyrgyz Republic) under an employment contract or a civil law contract, is obliged to make regular transfers of pension contributions to the "Unified Accumulative Pension Fund" at the rate of 10% of the employee's monthly income, but not more than 50 times the minimum monthly wage (KZT 42,500 for 2021), starting from January 1, 2021
Non-compliance of this Article would attract accrual of obligatory pension contributions on income of Kazakhstan employees-citizens of EAEU member states as well as respective penalty in case of no payment of pension contributions for such employees.
B. Statutory Compliance Release Date: February 04, 2021
C. Effective Date: January 01, 2021
A. Update
1. Article 28, paragraph 1 of the Law of the Republic of Kazakhstan, Obligatory Social Medical Insurance dated November 16, 2015 No. 405-V provides for employer and employee contribution to Obligatory Social Medical Insurance (‘OSMI’). Starting January 01, 2021, the employee contribution to OSMI has been increased to 2% from 1%.
Further, the Law of the Republic of Kazakhstan dated December 10, 2020 No. 382-VI provides that an individual is now entitled for a tax deduction of OSMI contribution withheld from his/her salary for Personal Income Tax (‘PIT’) purposes.
2. The Law of the Republic of Kazakhstan on the Republican Budget for 2021-2023, dated December 02, 2020, No. 379-VI provides for minimum calculation index (‘MCI’). The government there has increased MCI for the year 2021 to KZT 2,917 from KZT 2,651 for the year 2020.
B. Statutory Compliance Release Date:
- OSMI update – January 18, 2021
- OSMI deduction for PIT purposes – December 10, 2020
- MCI update – December 02, 2020
C. Effective Date:
- OSMI update – January 01, 2021
- OSMI deduction for PIT purposes – January 01, 2020
- MCI update – January 01, 2021
A. Update
From April 01, 2020; the minimum calculation index (MCI) in Kazakhstan for 2020 is increased to KZT 2,778. MCI for January 01, 2020 to March 31, 2020 was KZT 2,651.
The increase of MCI will impact the calculation of the maximum thresholds for tax deductions and exemptions, which are based on MCI. The caps of payroll taxes and social payments (i.e. PIT, OPFC, OPPFC, OSMI payments, OSMI contributions, Social tax and Social contributions) are not MCI-based. Hence, the maximum limits of payroll taxes and social payments are not changed.
B. Statutory Compliance Release Date: N.A.
C. Effective Date: April 01, 2020
A. Update
On April 21, 2020, the Government of Kazakhstan unveiled response package to limit the impact of COVID- 19 pandemic on the economy. The details are summarized below:
a. The correction coefficient “0” is established to the rates of the following social security contributions / payments:
- Social tax, Obligatory pension fund contributions, Obligatory professional pension fund contributions, Social insurance contributions, Obligatory social medical insurance payments and contributions, except for the ones paid by sole proprietors for themselves.
b. The above correction coefficient is applicable to the following entities and within the period specified below:
- Individuals engaged into private practice and subjects of micro, small and medium enterprises, which carry out activities, as prescribed, for the above-mentioned contributions / payment deadline falling in the period April 01, 2020 - October 01, 2020.
- Subjects of large enterprises, which carry out activities, as prescribed, for the above-mentioned contributions / payment deadline falling in the period April 01, 2020 - July 01, 2020.
c. Whereas large enterprises with specified types of activities are not liable to pay for the above- mentioned contributions / payment deadline for the period April 01, 2020 to July 01, 2020.
B. Statutory Compliance Release Date: April 21, 2020
C. Effective Date: April 01, 2020 to September 30, 2020
A. Update
Kazakhstan's State Revenue Committee recently clarified the applicable medical (health) insurance contribution rates for 2020 and future changes. For 2020 the contributions rates are:
- 1% for employees (withheld by employer) and
- 2% for employers (employer cost)
The employee rate will be increased to 2% from 2021 and the employer rate will be increased to 3% from 2022.
