Special tax regime based on a simplified declaration

Background information on the calculated indicators for 2018:

• Monthly calculation index (MCI) – 2,405 tenge
• Minimum wage (MZRP) – 28,284 tenge

Carrying out business activities on the basis of a simplified declaration must meet the following criteria:

• The average number of employees should not exceed 30 people;
• Income for the tax period should not exceed 2,044 times the minimum wage, respectively, 57,812,496 tenge (as of 2018).

At the same time, there are restrictions on the implementation of certain types of activities:

• production of excisable goods;
• storage and wholesale of excisable goods;
• sale of certain types of petroleum products – gasoline, diesel fuel and fuel oil;
• running lotteries;
• subsoil use;
• collection and acceptance of glassware;
• collection (harvesting), storage, processing and sale of scrap and waste of non-ferrous and ferrous metals;
• consulting services;
• accounting or auditing activities;
• financial, insurance and intermediary activities of an insurance broker and insurance agent;
• activities in the field of law, justice and justice;
• financial leasing activities.

The following subjects are not entitled to apply the special tax regime:

1) legal entities with structural subdivisions;

2) structural subdivisions of legal entities;

3) taxpayers with other separate structural subdivisions and (or) objects of taxation in different settlements.

For the purpose of taxation of persons applying special tax regimes, another separate structural subdivision of the taxpayer is recognized as a territorially separate subdivision, at the location of which stationary workplaces are equipped that perform part of its functions. The workplace is considered stationary if it is created for a period of more than one month.

The provision of this subparagraph does not apply to taxpayers engaged exclusively in the activity of leasing (renting) property;

4) legal entities in which the share of participation of other legal entities is more than 25 percent;

5) legal entities in which the founder or participant is at the same time the founder or participant of another legal entity that applies a special tax regime or features of taxation;

6) non-profit organizations;

7) payers of tax on gambling business.

Separately, the legislator singled out services that individual entrepreneurs and legal entities operating on the basis of a special tax regime on the basis of a simplified declaration, providing services on the basis of agency contracts (agreements) are not entitled to engage in. Agency contracts (agreements) are civil law contracts (agreements) concluded in accordance with the legislation of the Republic of Kazakhstan, according to which one party (agent) undertakes, for a fee, to perform certain actions on behalf of the other party on its own behalf, but at the expense of the other party or on behalf of and at the expense of the other party.

The tax period for applying the special tax regime based on the simplified declaration is half a year. A simplified declaration is submitted to the tax authority at the location of the taxpayer no later than the 15th day of the second month following the reporting tax period.

TERMS for applying for a special tax regime

Newly formed legal entities send a notification to the state revenue authorities no later than five working days after the state registration of the legal entity in the justice authorities. Late filing of a notice does not deprive a legal entity of the right to file a notice of transition to a special tax regime on the basis of a simplified declaration, but this exception applies only to newly formed small businesses.

Date when the tax regime began to apply:

• For newly formed individual entrepreneurs, the date of registration as an individual entrepreneur in the state revenue authorities is the date.
• For newly formed legal entities that submitted a notification of the applicable taxation regime within the prescribed period, the date of state registration with the justice authorities.

The amount of tax is 3%. The tax is calculated according to the simplified declaration by the entrepreneur independently by applying the established rate to the taxable object. The amount of taxes is subject to downward adjustment by an amount of 1.5 percent of the tax amount for each employee based on the average number of employees, if the wages of employees at the end of the reporting period amounted to individual entrepreneurs at least 2 times, legal entities – at least 2.5 times the minimum wage established by the law on the republican budget and effective on the first day of the tax period.

Deadlines for submitting a simplified declaration

A simplified declaration (form 910) is submitted to the tax authority at the location of the taxpayer no later than the 15th day of the second month following the reporting tax period, that is, before August 15th.

Terms for paying taxes on a simplified declaration

Payment to the budget of taxes specified in the simplified declaration is made no later than the 25th day of the second month following the reporting tax period in the form of individual (corporate) income tax and social tax, thus payment is made before August 25.

Individual (corporate) income tax is payable in the amount of 1/2 of the calculated amount of taxes on the simplified declaration, social tax – in the amount of 1/2 of the calculated amount of taxes on the simplified declaration minus the amount of social contributions to the State Social Insurance Fund calculated in accordance with with the Law of the Republic of Kazakhstan “On Compulsory Social Insurance”.

In one article it is impossible to reflect all the issues that arise when doing business on the basis of a simplified declaration, the staff of the law firm “KORGAN” has qualified specialists who will provide competent advice on taxation and tax and financial reporting.

High-quality legal and accounting services from the law firm KORGAN is another right step towards the growth and stability of your business!