Tax Preferences Under Investment Priority Project in Kazakhstan

CIT reduction — former Tax Code Article 712(1)

An IPP holder reduces calculated CIT by 100% on income from priority activities earned through the fixed assets commissioned under the contract. For new production the reduction starts on 1 January of the year in which the contract was concluded and ends no later than 10 consecutive years counted from 1 January of the following year. For expansion or renewal it runs for no more than 3 years from 1 January of the year after the last output-producing asset was commissioned, or asset by asset where commissioning is phased. Income from other activities is taxed at the standard CIT rate (20% under the Tax Code), and separate tax accounting is required. The same limits (10 years for new production, 3 years for expansion or renewal) apply to an investment agreement under Article 736(4) of Tax Code No. 214-VIII, where the actual term is also capped at 10 years by investment category (Article 736(5)). Bond Stone advises on the scope of income qualifying for the CIT reduction.

Land tax relief — former Tax Code Article 712(3)

An IPP holder for new production applies a coefficient of 0 to land tax rates on land used for the project. The relief starts on the first day of the month in which the contract was concluded and ends no later than 10 consecutive years counted from 1 January of the following year. It does not apply to land let or otherwise made available to others. An investment agreement carries the same 10-year limit (Tax Code No. 214-VIII, Article 736(3)(2)). Bond Stone advises on the documentation required to claim and maintain the relief and on the consequences of non-compliance with investment contract conditions.

Property tax relief — former Tax Code Article 712(4)

An IPP holder for new production calculates property tax at 0% on assets first commissioned in Kazakhstan. The relief starts on the first day of the month in which the first asset is recognised as a fixed asset and ends no later than 8 consecutive years counted from 1 January of the following year. It does not apply to assets transferred for use, trust management or lease. The 8-year limit is shorter than the 10-year limit for CIT and land tax, and an investment agreement carries the same 8-year limit (Tax Code No. 214-VIII, Article 736(3)(3)). Bond Stone advises on the scope of the relief and on the asset classification requirements for qualifying property.

VAT refund on construction — Tax Code Article 129

The refund of excess VAT on construction is a general rule rather than an IPP preference. Under Article 129 of Tax Code No. 214-VIII, a VAT payer buying goods, works and services for the construction, under a long-term contract, of production buildings and structures first commissioned in Kazakhstan may reclaim excess VAT on those purchases, following a thematic tax audit. Bond Stone advises on the refund claim and the documentation required to substantiate it.

VAT and customs duties

An IPP contract carried no VAT exemption: the former Tax Code excluded IPPs from the import VAT exemption for raw materials under investment contracts (former Article 399(1)(14)), and Article 839 of Tax Code No. 214-VIII preserves that exemption only for other investment contracts concluded before 1 January 2026. An investment agreement carries no VAT or customs relief either (Entrepreneurial Code, Article 283-1(7)). Customs duty relief is now available under a simplified investment contract, for up to 5 years (Entrepreneurial Code, Article 283-5), or a special investment contract, for up to 15 years (Law on Industrial Policy No. 86-VII, Article 42-1). Customs duty exemptions granted in an existing IPP contract depend on the terms of that contract: the Entrepreneurial Code article that provided them (former Article 287) was repealed from 1 January 2026, and no express transitional rule for them has been identified, so the contract itself should be reviewed.

Tax stability guarantee

Article 837(1) of Tax Code No. 214-VIII keeps the terms of an IPP contract in force until it expires. A contract concluded under the Entrepreneurial Code between 1 January 2018 and 1 January 2026 keeps both its tax preferences and the guarantee of tax stability; a contract concluded before 1 January 2018 under the former investment legislation keeps the guarantee only. Article 283-4(6) of the Entrepreneurial Code refers to IPPs concluded before 1 January 2025, so a contract signed during 2025 should be checked against both texts. Separate transitional rules apply to other contracts concluded before 1 January 2026: an investment agreement keeps its tax conditions and stability guarantee until it expires (Article 838), and an investment commitment agreement keeps its stability guarantee (Article 837(2)). Early termination of an investment contract cancels the tax preferences and the stability guarantee from the date the contract was concluded (Entrepreneurial Code, Article 283-4(5) and (7); former Tax Code, Article 711(3)), and the company pays the taxes and customs duties it did not pay because of the preferences (Entrepreneurial Code, Article 295). Bond Stone advises on the scope and limitations of the guarantee.

Interaction with double taxation treaties

Tax preferences under an IPP investment contract operate alongside Kazakhstan's double taxation treaty network. Where a DTT reduces withholding tax on dividends or interest paid to foreign investors, the DTT benefit applies in addition to the IPP tax preferences. Bond Stone advises on optimising the combined effect of IPP tax preferences and applicable DTT benefits in the overall investment tax structure.