Marketplaces to Be Exempt from Taxes in Kazakhstan

Digital trading platforms are going to be exempt from personal and corporate income taxes

The authorities of Kazakhstan plan to exempt marketplaces from two taxes, said Minister of Trade and Integration Bakhyt Sultanov on August 20.

There are 13 Kazakhstani digital trading platforms in the country with the most well-known being Kaspi, Chocofamily, Technodom and Mechta.

«In order to support them, we are exploring the issue of additionally exempting them from corporate income tax and personal income tax. Together with the National Bank, we are working on issues of stimulating development of e-commerce through payment systems,» Sultanov stated.

The rate of corporate income tax withheld from taxable income in Kazakhstan is 20% while the personal income tax rate is 10%. Earlier this year, Kazakhstan exempted online stores from paying corporate income tax. However, in late July, the Ministry of Trade noted that only 601 online stores out of 2,000 in Kazakhstan had registered to receive tax benefits in the form of an exemption from having to pay corporate income tax.

The e-commerce market in the republic has grown sharply amid the pandemic. In the first half of the year, online trade volume totaled KZT 432 billion (about $1.03 billion), or 9.4% of the total retail trade in Kazakhstan during that same period. This is compared to KZT 287 billion ($0.69 billion) at the start of 2019. By the end of 2019, its volume had increased to KZT 700 billion ($1.67 billion) with many forecasting growth to KZT 900 billion ($2.15 billion) by the end of this year.

«By 2022, online trading volume could reach 2 trillion tenge, or 13% of the total retail trade in the country. By 2025, e-commerce will have a 15% share of the retail market,» the minister added.

According to Sultanov, the ministry is currently negotiating the entry of Kazakhstani entrepreneurs to global e-commerce platforms such as Alibaba, eBay, Amazon and Wildberries. The minister pointed out that 43 Kazakhstani companies already have the Alibaba gold supplier status and three more are preparing to launch shops there by the end of this year. Products from another twenty-one companies are already being sold on Wildberries.

«We made an agreement with Wildberries where they will build logistics centers in Nur-Sultan and Almaty with an area of 100,000 square meters by the end of 2022, creating about 5,000 jobs,» Sultanov emphasized.

In his words, three fulfillment centers are already operating in Kazakhstan (centers for receiving, sorting and distributing Internet orders). They process over 350,000 mailed items per day. According to plans, by 2025 there will be 15 fulfillment centers in the country and the package volume will increase to 82.8 million.

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