Kazakhstan Enforces Mandatory Declarations for Executives and Business Owners
New Universal Declaration in Kazakhstan to Control Income and Property
Starting in January 2024, Kazakhstan will introduce the third stage of a universal declaration, which will require executives, founders, and spouses of legal entities, as well as individual entrepreneurs, to submit a report as part of their assets and liabilities declaration.
This initiative was taken by the government to establish an effective control system over the income and property of individuals and legal entities, in order to combat the shadow economy and corruption. The declaration will encompass information on the acquisition, sale, gift, or inheritance of property, including property abroad.
The deadline for submission of the declaration has been set for no later than July 15, 2024, in paper form, and no later than September 15, 2024, in electronic format.
For entities that are not engaged in entrepreneurial activities, submission of the declaration will still be mandatory. It is common practice in Kazakhstan for legal entities to operate without hired employees or balance sheet real estate and often prefer not to undergo the process of liquidating a legal entity. Owners of such entities are therefore obliged to file declarations on assets and liabilities from January 1, 2024.
To avoid this obligation, it is recommended for inactive legal entities to decide and liquidate themselves before the end of 2023.
The law envisions penalties for late submission of the declaration as a warning in the first case and a fine for repeated violations within a year. Failure to report foreign properties and funds in overseas accounts in Kazakhstan’s income tax declaration can result in a significant fine.
Looking ahead, the declaration of assets and liabilities is set to be replaced by another declaration of income and assets, with an annual deadline for submission.
Under an agreement to exchange financial information with the OECD countries, Kazakhstan will exchange and analyze data on financial accounts of residents and non-residents. Starting from the fourth stage of the universal declaration, residents of Kazakhstan with foreign assets or income from abroad will be required to file an individual income tax return and pay tax to the treasury, even if they reside abroad.
Foreigners or stateless individuals residing in Kazakhstan will also need to submit a declaration if they own property or have shares in housing construction within the country.
The authors of this article, Adilkhan Ziyashev, a lawyer at GRATA International, and Zaira Sarsenova, a partner at GRATA International, advise on the legal implications of this new universal declaration. It is important to note that the views and opinions expressed in this article are those of the authors and do not necessarily reflect the position of The Astana Times.
