On 12 January 2024, Kazakhstan’s State Revenue Committee released the Government Decree No. 1240 of 29 December 2023. The Government Decree came into effect on 15 January 2024.

This Decree of the government outlines the types of activities for the purposes of applying the special tax regime of the retail tax. The list of types of activities permitted for the application of the special tax regime of retail tax has been expanded from 190 to 364 types. The new qualifying activities include horticulture, food production and processing, textile manufacturing, furniture production, electrical equipment manufacturing, construction, and many more.

In this regard, taxpayers wishing to switch to the retail tax regime must submit a notification of the applied regime in January 2024. This notification can be submitted through the “e-Salyq Business” mobile application. The start date of application of the regime will be the first day of the month following the month in which such notification is submitted (i.e., 1 February 2024). At the same time, at the end of 2023 and January 2024, the entrepreneur must submit a declaration under the tax regime that he previously applied.

The new regime, approved in March 2023, introduces a general retail tax rate of 4% on all income earned in Kazakhstan or from abroad, which will be reduced to 2%. However, a retail tax rate of 8% applies to income generated from the sale of goods, performance of works, and provision of services to business entities that require documentary confirmation of expenses. Additionally, taxpayers operating under the special retail tax regime are exempt from VAT.

To qualify for this regime, a taxpayer must be engaged in one or more qualifying activities, have 200 employees on average during the tax period, and their annual income should not surpass 600,000 MCI (Monthly Calculated Index). The MCI for 2024 has been increased from KZT 3,400 to KZT 3,692.