Simplified Declaration in Kazakhstan: How the Special Tax Regime for Small Businesses Works

25 June, 2026

Since January 2026, a consolidation of special tax regimes has taken place in Kazakhstan, as a result of which the regime based on the simplified declaration has taken on the role of a system-forming element in supporting entrepreneurship. It has transformed from one of many options into a key, unified mechanism for the legalization and growth of a significant part of the business.

Fundamental changes in the tax status for entities switching to this regime are enshrined in regulations. According to them, taxpayers:

Receive an exemption from the obligation to pay social tax. This leads to a direct reduction in the overall tax burden on the payroll fund.
Are exempted from value added tax. A critical clarification is that there are legally established exceptions to this exemption. The obligation to calculate and pay VAT remains in two cases:
When importing goods into the customs territory of the Republic of Kazakhstan.
When purchasing works and services from non-resident suppliers, if the place of supply of these services is recognized as Kazakhstan.

Thus, the regime based on the simplified declaration is not a complete exemption from all tax obligations but represents a targeted optimization, focusing on replacing key taxes with a single calculation while simultaneously removing the administrative burden of VAT and social tax for most domestic transactions.

The main value of the updated system is achieving a balance between the fiscal interests of the state and the operational freedom of business. The regime offers a fundamental trade-off: the entrepreneur receives maximum reduction in bureaucratic routine in exchange for complying with transparent and predictable rules of the game. This is a transition from the logic of constant tax control to a model based on trust and incentivizing legal turnover.

Who Can Apply the Simplified Declaration in 2026?

Individual entrepreneurs and legal entities – residents of the Republic of Kazakhstan

Revenue ≤ 2.595 billion tenge per year (600,000 MCI)
The activity is not on the official prohibited list (e.g., finance, mining, gambling, etc. from the prohibited list)

Additional criteria for applying the "Simplified Declaration" special tax regime.
Only for independent businesses with a simple ownership structure, without overlap with other preferential regimes.

Who CANNOT apply the simplified declaration (2026)
1.  Holding structures: Share of other legal entities in the authorized capital > 25%
2.  Affiliated structures: Founder already applies the simplified regime – as an individual entrepreneur or in another company
3.  Business fragmentation: Individual entrepreneur or individual – founder of a "simplified" company
4.  Non-profit organizations: Do not carry out entrepreneurial activities
5.  Residents of special economic zones and "Astana Hub": Already benefit from territorial tax preferences
6.  Participants in simple partnerships: Joint activities = special taxation procedure

Single tax rate: from 2% to 4%

Base: 4% of income – nationwide level
Flexibility: Maslikhats can reduce it to 2% in their territory

→ The rate depends on the place of business registration
→ Regions compete for entrepreneurs through tax incentives

Advantages of the regime since 2026:

Tax holidays: Moratorium on scheduled on-site inspections for new SMEs – business starts without administrative pressure
Cash method: Income is recognized when money is received into the account, not upon shipment – easier to manage cash flow

⚠️ Important to remember: Social contributions and pension contributions for employees are paid in full – the regime does not cancel labor obligations.

What is cancelled upon switching to the simplified regime:
1. VAT on domestic transactions:

You do not pay, do not issue invoices
Simplified document flow, no cash flow gaps

Exceptions: VAT is paid upon:

import of goods
purchase of services from non-residents (place of provision - Republic of Kazakhstan)

2. Social tax – 0%:

Full exemption for individual entrepreneurs and companies
Reduction of costs on the payroll fund

Remain:

Mandatory pension contributions
Social contributions for employees

Reporting – 2 times a year. Semi-annual period instead of quarterly:

Declaration is submitted only for 6 and 12 months
2 times fewer calculations and payments

Tax benefits and simplifications

Deduction of payroll expenses when income > 24,000 MCI: This is a real benefit. When taxable income calculated on a cumulative basis from the beginning of the year exceeds 24,000 MCI, the taxpayer gets the right to reduce their tax base by the amount of actually accrued employee wages. This is a powerful incentive for legalizing "grey" salaries.
Exemption from accounting when income < 135,000 MCI: This is a crucial simplification for individual entrepreneurs. According to official explanations, individual entrepreneurs whose income does not exceed 135,000 MCI are exempt from the obligation to maintain accounting records. They only need to maintain an Income Register.

Main limitation of the simplified regime: VAT barrier in B2B

Simplified regime taxpayers do not pay VAT → do not issue VAT invoices → counterparties lose tax deductions.

What your clients on the general regime lose

No input VAT – they cannot reduce their tax burden
Expenses are not credited when calculating corporate income tax – higher profit tax

→ For large businesses and government customers, working with a "simplified" taxpayer is 12% more expensive.

Who is the regime suitable for

Retail and catering
Services to the population
Startups without VAT chains

Not suitable for:

Supplies to VAT-paying companies
Government procurement
Businesses embedded in industrial chains

Conclusion: This regime is truly inappropriate for companies operating primarily in the B2B (business-to-business) segment, where their clients or primary suppliers are large enterprises or government procurement (all of which are VAT payers). This makes the regime ideal for the B2C (business-to-consumer) sector—retail, consumer services, and startups not integrated into VAT chains.

Condition	2026	2025
Personnel	No restrictions	Until December 31, 2025, there is a limit of up to 30 employees (average per half-year)
Income limit	600,000 MCI (about 2.5 billion tenge in 2026) per year.	24,038 MCI (equivalent to 94,517,416 tenge) for the first half of the year.
Tax period	Tax reporting is submitted once every six months, with each six-month period being the tax period.	Tax reporting is submitted once every six months, with each six-month period being the tax period.
Social contributions	None	The amount of mandatory social contributions (MSC) paid by an individual entrepreneur to the State Social Insurance Fund (SSIF) is 5% of the self-declared income level.
Separate divisions	The presence of branches, warehouses or divisions outside the head office is a reason for refusal	The presence of branches, warehouses or divisions outside the head office is a reason for refusal
Share of other companies	Participation of other legal entities ≤ 25%	Participation of other legal entities ≤ 25%
Founders	The founder is not a participant in another company operating under a special regime.	The founder is not a participant in another company operating under a special regime.
Type of activity	There is a prohibition list	There is a list of exceptions
VAT	No VAT. Exception: import of goods and purchase of services from non-residents.	There is VAT. On a general basis, as with the general tax regime (GTR).

Personnel
2026	No restrictions
2025	Until December 31, 2025, there is a limit of up to 30 employees (average per half-year)

Income limit
2026	600,000 MCI (about 2.5 billion tenge in 2026) per year.
2025	24,038 MCI (equivalent to 94,517,416 tenge) for the first half of the year.

Tax period
2026	Tax reporting is submitted once every six months, with each six-month period being the tax period.
2025	Tax reporting is submitted once every six months, with each six-month period being the tax period.

Social contributions
2026	None
2025	The amount of mandatory social contributions (MSC) paid by an individual entrepreneur to the State Social Insurance Fund (SSIF) is 5% of the self-declared income level.

Separate divisions
2026	The presence of branches, warehouses or divisions outside the head office is a reason for refusal
2025	The presence of branches, warehouses or divisions outside the head office is a reason for refusal

Share of other companies
2026	Participation of other legal entities ≤ 25%
2025	Participation of other legal entities ≤ 25%

Founders
2026	The founder is not a participant in another company operating under a special regime.
2025	The founder is not a participant in another company operating under a special regime.

Type of activity
2026	There is a prohibition list
2025	There is a list of exceptions

VAT
2026	No VAT. Exception: import of goods and purchase of services from non-residents.
2025	There is VAT. On a general basis, as with the general tax regime (GTR).

If at least one condition is violated, the taxpayer loses the right to the simplified regime. Such an entity is obliged to switch to standard taxation starting from the date following the quarter of the violation.

Simplified Declaration in Kazakhstan: How the Special Tax Regime for Small Businesses Works

Who Can Apply the Simplified Declaration in 2026?

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