Taxes for non-residents: how not to overpay and recover excess payments?

Difficulties with calculating the taxes on repo operations and derivatives, legal uncertainty regarding application of international agreements and complex procedures for recovering the overpaid taxes remain key barriers for foreign investors in Kazakhstan. To address these unclear issues and make engaging with the Kazakhstan's capital market more transparent and secure, KASE hosted an expert seminar "Tax aspects of operations with financial instruments on KASE for non-resident legal entities".

Meruert Amir, Partner and Head of the Tax Practice at BeOne Kazakhstan, Irina Bykhovskaya, Partner and Head of International Business at B1 Group, and Maria Yegorova, Partner in the Tax Services Group for financial sector organizations at the B1 Group, shared practical solutions and studied the real-world cases with the participants.

During the session, the experts provided a detailed breakdown of taxation of value gains from sale of shares and debt securities, as well as the conditions for applying local exemptions from CIT at the source. The speakers placed particular emphasis on nuances of calculating the tax base for repo operations and derivatives, an area currently lacking detailed legislative guidance, which can, in certain instances, lead to risks of underpayment or over-taxation.

Participants also discussed the practical challenges associated with applying Double Taxation Avoidance Agreements (DTAAs) and passing the beneficial ownership tests, including the potential application of end-to-end approach under the law. Furthermore, the seminar covered the procedures and three-year period for reclaiming the overpaid CIT, the requirements for mandatory tax registration of non-residents and other obligations for non-residents, and specific proposals for removal of administrative barriers to enhance the investment attractiveness of KASE.