Economy Ministry confirms tax benefits for investors on KASE and AIX will remain in Kazakhstan

According to National Economy Minister Azamat Amrin, the government will not remove tax benefits on dividend payouts and capital gains from securities.

«During discussions of the new Tax Code draft this spring, we proposed reducing the tax rate [on dividend payouts and capital gains] to 5% from the current 10%, while also removing certain tax benefits. However, we cannot eliminate all the benefits. We have the AIFC, KASE and Astana Hub. Within the AIFC, tax benefits are protected by a constitutional law. For this reason, we will maintain both the 10% rate and the associated tax benefits,» Amrin said.

In an earlier version of the Tax Code, the ministry suggested eliminating tax benefits for dividends and capital gains on securities, replacing them with a 5% tax rate for Kazakhstan’s residents (with a higher rate proposed for non-residents).

Most experts interviewed by Kursiv.media opposed the Ministry’s initiative, arguing that it would negatively impact Kazakhstan’s stock market development. They expressed concern that the country might lose both existing and potential investors.

In early September, President Kassym-Jomart Tokayev emphasized the importance of preserving the tax regime on the Astana International Exchange (AIX), which operates within the Astana International Financial Centre (AIFC).

Current rules

Under the current Tax Code, resident investors are required to pay a 10% tax on revenue earned from the stock market (including dividends and capital gains), while non-residents are subject to a 15% tax. Various tax benefits apply to both resident and foreign investors. Tax benefits for investors on KASE are enshrined in the code. Investors are required to pay taxes on capital gains from securities only if transactions between Kazakhstani entities and non-residents occur outside open trading sessions.

Additionally, coupon payments on corporate bonds are tax-exempt if listed on KASE, while government bonds traded on the stock exchange are entirely exempt from this requirement.

There are different rules for individual residents and other investor categories regarding dividends. For example, foreign investors are exempt from taxes if market activity in a stock is significant (with at least 50 trades per month totaling $52,000). On the other hand, Kazakhstani retail investors enjoy an additional benefit: dividends below $229,070 are tax-free.

Until 2022, investors on the AIX were fully exempt from taxes, a provision introduced by Constitutional Law in December 2015. Although this exemption was originally set to last until 2066, the government revised the rules in 2017, introducing requirements for trade activity similar to those on KASE (but without conditions on dividend amounts). This means that revenue from the Kazakhstani stock exchanges is not subject to taxation under these circumstances.