On 25 December 2017, Kazakhstan adopted a new Tax Code (the New Tax Code)1 and certain tax-related amendments to a number of laws (the Tax Amendments).2
Most provisions of the New Tax Code and the Tax Amendments took effect on 1 January 2018. Below we summarize some of the most important changes introduced by the New Tax Code and the Tax Amendments:
2. Principle of Good Faith
A new principle of good faith was introduced to provide (among other things) as follows:
- it is presumed that the taxpayer has acted in good faith;
- all gaps and ambiguities in tax laws shall be interpreted in favor of the taxpayer;
- the burden of proving tax violations is imposed on the tax authorities; and
- if the taxpayer has relied on a clarification which was issued by the tax authorities and then subsequently cancelled, the taxpayer should be liable only for the amount of unpaid tax and not for default interest or penalty.
Introduction of the principle of good faith is an important development which is aimed at achieving the balance of interests of the taxpayer and the state. However, it remains to be seen how this principle will be applied in practice.
3. Frequency of Tax Amendments
Under the New Tax Code, from 1 January 2020:
- significant changes to the New Tax Code (such as introducing new taxes or increasing tax rates) will be possible not more than once a year, should be adopted not later than 1 July of the current year, and should take effect not earlier than 1 January of the following year;
- other changes to the new Tax Code (such as those relating to tax administration or improving the taxpayer’s position) are possible more frequently than once a year, but should be adopted not later than 1 December of the current year; and
- changes to the New Tax Code should be enacted only by a specific law dealing with taxation and may not be included in other laws.