Withholding Tax & DTT in Kazakhstan

WHT rates — domestic law

Under the Tax Code No. 214-VIII, the following WHT rates apply to payments to non-resident recipients: dividends — 15% general rate (5% for shareholders holding ≥25% directly or indirectly on dividend amounts up to 230,000 MCI, approximately USD 1.9 million, and 15% on the excess; 20% to persons registered in low-tax jurisdictions); interest on loans and debt securities — 10%, down from 15%, which broadly matches the rate in most of Kazakhstan's DTTs; other interest and royalties — 15%; other Kazakhstan-source income under Article 679, including services performed in Kazakhstan and listed services such as management, consulting and engineering — generally 20% (Article 682). These rates may be reduced or eliminated by an applicable double taxation treaty. Bond Stone advises on the applicable domestic WHT rate and available treaty relief for specific cross-border payment flows.

Kazakhstan DTT network

The State Revenue Committee listed 55 double taxation treaties in force on 28 April 2023. Dividend rates in treaties with key investor states: China 10%; Germany 5% for a company holding directly at least 25% of the capital, otherwise 15%; Netherlands 5% for a company holding directly or indirectly at least 10% of the capital, otherwise 15%, with a 0% rate under the Protocol only for a holding of at least 50% and an investment of at least USD 1 million guaranteed or insured by the investor's government and approved by the source state's government; Russia 10%; UAE (5% on dividends for companies directly holding at least 10%); UK 5% for a company controlling directly or indirectly at least 10% of the voting power, otherwise 15%; USA 5% for a company owning at least 10% of the voting stock, otherwise 15%. Interest and royalties are capped at 10% in each of the China, Germany, Netherlands, Russia, UK and USA treaties. Rates vary by treaty and by the level of shareholding — Bond Stone advises on treaty-specific rates applicable to the investor's structure.

Beneficial ownership — treaty access requirement

To access reduced DTT withholding tax rates, the recipient of the payment must be the beneficial owner of the income — not a mere conduit passing the payment to a third party. Kazakhstan's tax authority actively applies beneficial ownership analysis on dividend, interest, and royalty payments to treaty partners. Conduit arrangements — where an intermediate holding company has no substantive economic activity and merely passes through payments — are at risk of treaty denial. Bond Stone advises on structuring holding arrangements to satisfy beneficial ownership requirements.

OECD Multilateral Instrument — MLI

Kazakhstan has signed and ratified the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). The MLI modifies Kazakhstan's covered DTTs to implement the Principal Purpose Test (PPT), which denies treaty benefits where obtaining the benefit was one of the principal purposes of an arrangement, among other BEPS measures. The effect differs treaty by treaty, depending on both states' MLI positions. Bond Stone advises on the MLI's impact on existing Kazakhstan-related holding and financing structures.

Documentation — claiming reduced WHT rates

The Kazakhstani paying entity may apply a treaty rate to dividends, interest and royalties itself if a ratified treaty exists with the recipient's state, the income is not connected with a permanent establishment in Kazakhstan, the recipient is the final recipient (beneficial owner) of the income, and a residency document meeting Article 702 of the Tax Code is provided in time (Tax Code, Article 706). The document is due by the earlier of 31 March of the year after the tax period of payment and five working days before the end of a tax audit of the withholding (Article 705). Bond Stone advises on the documentation package required for compliant treaty application.

AIFC — dividend exemption

Dividends on shares of participants registered under AIFC law are exempt from income tax until 1 January 2066 (Constitutional Statute No. 438-V, Article 6(7)) — regardless of the recipient's treaty position. The exemption covers dividends paid on the AIFC company's shares, not dividends it receives from a Kazakhstani subsidiary, which follow the ordinary rules. Bond Stone advises on AIFC participant eligibility and the exemption scope as part of AIFC investment structuring mandates.