Article 407. Income from the sale of goods, performance of works, provision of services to persons who are not tax agents of the Tax Code of the Republic of Kazakhstan

    1. When an individual sells goods, works, and services to persons who are not tax agents, the provisions of this paragraph shall apply to an individual for income that simultaneously meets the following conditions:

    1) the income received is not included in the taxable income of an individual entrepreneur, a person engaged in private practice, as well as in the income of a special tax regime for the self-employed;

    2) the income is received from a person who is not a tax agent.

    2. Income earned by an individual from the sale of goods, performance of works, and provision of services to persons who are not tax agents includes:

    1) income from the sale of goods, performance of works, provision of services to persons who are not tax agents;

    2) income of a public mediator in accordance with the Law of the Republic of Kazakhstan "On Mediation";

    3) income under civil law agreements concluded with diplomatic and equivalent representative offices of a foreign state, consular offices of a foreign state accredited in the Republic of Kazakhstan, which are not tax agents;

    4) income under civil law contracts concluded with international and state organizations, foreign and Kazakh non-governmental public organizations and foundations that are exempt from the obligation to calculate, withhold and transfer individual income tax at the source of payment in accordance with international treaties ratified by the Republic of Kazakhstan;

    5) income received (to be received) by a member of the board of directors or other governing body of a taxpayer who is not a supreme governing body.  

The Code of the Republic of Kazakhstan dated July 18, 2025 No. 214-VIII SAM.

President    

Republic of Kazakhstan     

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From January 1, 2026, to invalidate the Code of the Republic of Kazakhstan dated December 25, 2017 "On Taxes and Other Mandatory payments to the Budget" (Tax Code) in connection with the entry into force of the Tax Code dated July 18, 2025 No. 214-VIII SAM.

Article 407. Methods for determining the amounts of value-added tax allowed to be offset by the Code on Taxes and Other Mandatory Payments to the Budget (Tax Code) of the Republic of Kazakhstan

     1. Unless otherwise provided for in paragraph 2 of this article, the value-added tax payer, except as specified in paragraph 3 of this article, shall determine the amount of value-added tax allowed for offset by one of the following methods:

     the proportional method;

     by keeping separate records of the amounts of value-added tax on goods, works, and services that are or will be used for the purposes of taxable and non-taxable turnover.

     2. The following persons using the proportional offset method have the right to determine the amount of value-added tax allowed for offset by certain types of turnover through separate accounting:

     1) second–tier banks, organizations engaged in certain types of banking operations, organizations engaged in microfinance activities (with the exception of credit partnerships and pawnshops) - for turnover related to the receipt and sale of collateral (goods);  

     RCPI's note!       Subparagraph 2) is valid until 01.01.2027 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.  

     2) an organization specializing in improving the quality of credit portfolios of second–tier banks, the sole shareholder of which is the Government of the Republic of Kazakhstan, using a proportional method of offsetting - for turnover related to acquisition, ownership and (or) sale:

     collateral (goods) received from a bank for asset claims acquired from such a bank;

     property (goods) acquired by the bank as a result of foreclosure on mortgaged property and obtained by an organization specializing in improving the quality of loan portfolios of second-tier banks, the sole shareholder of which is the Government of the Republic of Kazakhstan, for the rights of claim acquired from such a bank for doubtful and uncollectible assets;  

     RCPI's note!       Subparagraph 3) is valid until 01.01.2027 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.  

     3) a subsidiary of the bank acquiring doubtful and uncollectible assets of the parent bank – for turnover related to acquisition, ownership and (or) sale:

     collateral (goods) obtained as a result of foreclosure on acquired rights of claim for doubtful and uncollectible assets from the parent bank;

     property (goods) that became the property of the parent bank as a result of foreclosure on mortgaged property and acquired by a subsidiary of the bank from the parent bank;  

     4) lessor – for turnover related to the transfer of property to financial leasing. The lessor's expenses related to the acquisition of property subject to financial leasing are considered as expenses incurred for the purposes of taxable turnover.;  

     5) Islamic bank – for financing individuals and legal entities as a trade intermediary by providing a commercial loan without a condition for the subsequent sale of goods to a third party in accordance with the legislation of the Republic of Kazakhstan on banks and banking activities;

     6) value added tax payer – for the purchase and sale of goods within the framework of financing individuals and legal entities as a trade intermediary by providing a commercial loan on the terms of subsequent sale of goods to a third party in accordance with the legislation of the Republic of Kazakhstan on banks and banking activities;

     7) individual entrepreneurs and legal entities licensed for tourist operator activities (tour operator activities) in accordance with the legislation of the Republic of Kazakhstan on tourism activities, keep records of goods, works, and services in order to provide services to the tour operator separately from other activities. Accounting for goods, works, and services for the purpose of providing services to a tour operator is conducted separately for turnover exempt from value-added tax in accordance with subparagraph 15) of Article 394 of this Code and taxable turnover.  

     3. A person engaged in the construction of facilities, the turnover of which is exempt from value-added tax in accordance with paragraph 1 of Article 396 of this Code, is obliged to keep separate records of the amounts of value-added tax on goods, works, services that are used or will be used.:

     for the purposes of turnover exempt from value added tax in accordance with paragraph 1 of Article 396 of this Code, and other turnover;  

     during the construction of each construction facility – for the purposes of applying paragraph 3 of Articles 402 and 410 of this Code.

     For other turnover, such a value-added tax payer has the right to determine the amount of value-added tax allowed for offset by the proportional method in accordance with Article 408 of this Code.

     The footnote. Article 407 as amended by the Law of the Republic of Kazakhstan dated 07/03/2019 No. 262-VI (effective from 01/01/2020).  

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