Kazakhstan to grant benefits to processing companies

The government of Kazakhstan intends to authorize the minister of industry and construction to sign long-term agreements with investors in the processing of solid minerals, granting them tax benefits.

“In accordance with Article 243 of Kazakhstan’s Subsoil Code, the government of Kazakhstan approves the draft agreement on the processing of solid minerals and to authorizes the minister of industry and construction of the Republic of Kazakhstan to sign agreements on the processing of solid minerals.”

To be eligible for any tax benefits, investors must allocate at least $576.1 million to a solid mineral processing project.

Authorities define a solid mineral processing project as a series of measures aimed at expanding or modernizing existing processing facilities or establishing new ones. All types of property (excluding personal belongings), such as financial leasing assets, ownership rights or an increase in fixed assets used for entrepreneurial activity, will be considered investments in a processing project.

After signing an agreement on solid mineral processing, investors can enjoy the following preferences: reduction of corporate income tax on revenue from an investment project to zero; exemption from land tax for all land parcels involved in the investment project and exemption from property tax on assets that are part of the project.

The government plans to grant tax exemptions on corporate income tax and land tax for up to ten years and property tax for up to eight years provided that the project’s profitability rate does not exceed 15%. Once the entity reaches this rate, it will be required to pay taxes without exemptions. However, if the rate drops below 15%, the taxpayer can reapply for benefits.

If an investor decides to terminate the agreement ahead of schedule, they will be required to reimburse all tax exemptions and other benefits received under the agreement. The decree will come into effect ten days after its official publication. Public review of the draft document will continue until February 26, 2024.