Аналитика и мероприятия UPPERCASE

Digest of major changes in the legislation of Kazakhstan in January 2024

UPPERCASE LEGAL is launching a digest featuring an overview of the major legislative changes in the Republic of Kazakhstan.

Suspension of the moratorium on business inspections

On January 1, 2024, the moratorium on business inspections in the Republic of Kazakhstan was lifted. The moratorium came into effect on January 1, 2020, prohibiting central and local executive bodies from conducting on-site inspections of small businesses, including micro-enterprises, except in cases provided by 14 specific grounds.

These grounds include:

  1. Inspections aimed at preventing or addressing violations that potentially pose a mass threat to the life and health of the population, the environment, legality, and public order; a direct or immediate threat to the constitutional system and national security, as well as inspections conducted based on the grounds specified in the Law of the Republic of Kazakhstan dated July 4, 2003, "On State Regulation, Control, and Supervision of the Financial Market and Financial Organizations";
  2. Inspections in cases where conducting a single unscheduled inspection regarding a specific fact involving a specific control subject (object) is insufficient to identify the causes of the violations of the requirements established by the legislation of the Republic of Kazakhstan, and control and supervision are required regarding other subjects related to this specific fact;
  3. Inspections and preventive control with visits carried out at the request of business entities regarding their activities, including applications for obtaining permits in accordance with the Law of the Republic of Kazakhstan dated May 16, 2014, "On Permits and Notifications."
  4. Inspections based on the grounds provided by the Criminal Procedure Code of the Republic of Kazakhstan dated July 4, 2014;
  5. Inspections by the prosecutor's office at the direction of the President of the Republic of Kazakhstan and the Prosecutor General of the Republic of Kazakhstan;
  6. Customs inspections;
  7. Counter-tax inspections;
  8. Thematic tax inspections on issues related to determining settlements between the taxpayer and its debtors, registration in tax authorities, execution of orders to suspend cash transactions issued by the tax authority;
  9. Preventive supervision with visits for the selection and conduct of sanitary and epidemiological examination of products to monitor product safety in the field of sanitary and epidemiological well-being of the population;
  10. Inspections and preventive control with visits to ensure compliance with the legislation of the Republic of Kazakhstan on accreditation in the field of conformity assessment;
  11. Inspections of subsoil users;
  12. Inspections of state audit and financial control objects;
  13. Inspections related to compliance with the legislation of the Republic of Kazakhstan in the field of competition protection regarding participants in state procurement, whose actions indicate cartel signs;
  14. Inspections and preventive control with visits to ensure compliance with the land legislation of the Republic of Kazakhstan.

Cancellation of the Unified Cumulative Payment

Starting from the beginning of 2024, the period of using the Unified Cumulative Payment (UCP) has concluded. The main purpose of introducing the UCP was to involve self-employed individuals in the system of medical, social insurance, and pension provision for a period of 5 years (from 2019 to 2023).

The UCP is designed for self-employed individuals who have paid the payment, whose income for the calendar year does not exceed 1175 times the minimum wage (MW), and who engage in entrepreneurial activities without registering as individual entrepreneurs. They provide services and sell products from their personal subsidiary farm to other individuals.

However, those who pay this fee from the beginning of the new year can choose one of the following tax regimes, subject to certain conditions:

  1. Special tax regime (STR) based on a simplified declaration;
  2. STR based on a patent;
  3. STR using a special mobile application;
  4. Retail tax STR.

Moreover, it is possible to engage in entrepreneurial activities without registering as an individual entrepreneur if there is no use of hired employees and the annual income does not exceed 12 times the minimum wage.

Staged Introduction of Mandatory Employer Pension Contributions

MEPC, or Mandatory Employer Pension Contributions, represent funds transferred by employers from their own resources to a hypothetical pension account in accordance with the legislation of the Republic of Kazakhstan (point 58 of Article 1 of the Social Code of the Republic of Kazakhstan, which came into effect on July 1, 2023).

Starting from January 1, 2024, mandatory employer pension contributions (MEPC) came into effect, which are made from their own funds in favor of employees. Beginning at 1.5% in the next year, the MEPC rate will gradually increase to 5% by 2028. If MEPC is paid as part of a unified payment, their share in the unified payment rate from wages will be 7.0% from January 1, 2024.

This measure is aimed at supporting the younger generation of Kazakhstanis, whose pensions will depend on their own pension contributions. Pensions will be formed from three elements: a basic pension from the state, an accumulative pension from personal contributions to the Unified Accumulative Pension Fund, and a conditional-accumulative pension funded by employer contributions.

The introduction of MEPC is particularly relevant for citizens who do not have a solidary work record (before 1998) or have limited experience in the solidary system.

It is important to note that employer expenses for paying MEPC, according to the Tax Code, are recognized as deductions from taxable income. Thus, the burden on the employer will remain at an acceptable level.
Introduction of Provisions on the Procedure for Payment, Refund, and Amount of State Duty in the Constitutional Law of the Republic of Kazakhstan dated November 5, 2022, No. 153-VII "On the Constitutional Court of the Republic of Kazakhstan"
Starting from January 1, 2024, a provision of the Constitutional Law "On the Constitutional Court" came into effect, regulating the procedure for payment of the state duty. The procedure for payment, refund, and the amount of the state duty when citizens apply to the Constitutional Court, as well as the grounds for exemption from its payment, are determined by the Tax Code. Payment of the state duty to the budget must be confirmed by relevant payment or cash documents. In case of payment through ATMs, electronic terminals, remote communication channels, and the "electronic government" payment gateway, checks and receipts in paper or electronic form serve as confirmation.

In cases provided by the legislation, the paid state duty can be refunded. Citizens are also provided with the opportunity to defer the payment of the state duty when filing a lawsuit in court, in accordance with the Tax Code.

Starting from January 1, 2024, the Tax Code introduced a new Article 51-2, regulating the granting of deferment for the payment of the state duty. Deferment can be granted to individuals and legal entities, excluding large enterprises, based on their property or financial situation. The state duty can be paid partially or in advance. Deferment can be granted for no more than 1 year for various reasons, such as natural disasters, technological catastrophes, delayed payment of wages, registration as unemployed, severe illnesses, non-payment for delivered goods or performed services, seasonal nature of production, and other social circumstances. After the court decision on deferment, a copy of the decision is sent to the tax authorities.

Expansion of Categories of Cases Heard by the Court with the Participation of Jurors

Since the beginning of 2024, changes have been introduced regarding the jurisdiction of jurors, covering several categories of crimes. Among them:

  1. Forcible removal of human tissues and organs,
  2. Torture,
  3. Raider seizure,
  4. Improper performance of professional duties by medical or pharmaceutical workers resulting in the death of two or more persons,
  5. Illegal extraction of fishery resources, other aquatic animals, and plants leading to severe consequences,
  6. Illegal hunting,
  7. Violation of traffic rules or operation of vehicles resulting in the death of two or more persons,
  8. Violation of traffic rules or operation of vehicles under the influence of alcohol or narcotics resulting in the death of a person.

According to Article 631, paragraph 1 of the Criminal Procedure Code, cases of particularly serious crimes are considered by the court with the participation of jurors, excluding certain categories such as murders in emergency situations, crimes against peace and security of humanity, terrorist and extremist crimes, military crimes in wartime and combat conditions, crimes as part of a criminal group, and crimes against the sexual integrity of minors.

As part of the new regulations, it is also established that criminal cases under several articles, such as Articles 116, 125, 128, 132, 135, 146, 160, 163, 164, 168, 249, 317, 335, 337, 345, 345-1, 346, 380-1 of the Criminal Code of the Republic of Kazakhstan, will also be heard by the court with the participation of jurors. In case a person is accused of multiple crimes, one of which is included in the specified list, their case is also subject to consideration by jurors.
Features of Currency Control on Repatriation of National and/or Foreign Currency in Export or Import by the State Revenue Body.
Since January 1, 2024, changes have been introduced in the Republic of Kazakhstan in the Law "On Currency Control," including a new Article 20-1, which regulates the specifics of currency control on the repatriation of national and/or foreign currency in export or import by the state revenue body.

When conducting currency control on compliance with the requirement for the repatriation of national and/or foreign currency in export or import, the state revenue body conducts an inspection or performs other forms of control without the need to formalize an act on its appointment. The inspection is carried out without visiting the inspected resident by sending them a written request for providing information and/or documents related to the currency transaction, including the fulfillment of obligations under the currency contract for export or import.

New Rules for export-import currency control have also been introduced, covering several aspects such as the procedure for obtaining a registration number for the currency contract, the transfer of the exporter or importer between authorized banks, the removal of the currency contract from registration, monitoring of funds movement and obligations under the currency contract, control over compliance with the repatriation requirement, record-keeping in the territorial subdivision of the state revenue body, and others.

Registration of a currency contract for export or import is required if the amount of such a contract exceeds 50,000 US dollars. The exporter or importer applies for the registration number before the start of fulfilling obligations under the currency contract, submitting the necessary documents to the authorized bank or territorial branch of the National Bank.

Furthermore, Article 251 of the Code of Administrative Offenses has increased liability for non-compliance with the repatriation requirement of national and/or foreign currency, providing for a fine of 20% of the amount of the uncredited currency without limiting the maximum fine to 2000 times the minimum wage.
MPR, MCI, and Other Calculated Indicators for the Year 2024
On December 5, 2023, in the Republic of Kazakhstan, Law No. 43-VIII was adopted, approving the republican budget for the period from 2024 to 2026.

According to the new legislation, starting from January 1, 2024, the following norms are established:

  1. The minimum wage is set at 85,000 tenge;
  2. The monthly calculation indicator is established at 3,692 tenge;
  3. The minimum amount of the state basic pension payment is set at 28,215 tenge;
  4. The minimum pension amount is set at 57,853 tenge;
  5. The subsistence minimum for calculating basic social benefits is determined at 43,407 tenge.

State Regulation of the Production and Circulation of Ethyl Alcohol and Alcoholic Products

Starting from January 1, 2024, changes to the Law on State Regulation of the Production and Circulation of Ethyl Alcohol and Alcoholic Products came into effect. Specifically, the types, categories, names, and concepts of alcoholic products are defined in accordance with the technical regulations.

The production of alcoholic products is carried out using ethyl alcohol and food raw materials in accordance with technical regulations. Ethyl alcohol is divided into raw ethyl alcohol and rectified ethyl alcohol. The production of ethyl alcohol is allowed when using at least twenty percent of the production capacity specified in the production passport.

For the production of vodka, special vodka, and vodka with a protected designation of origin, it is required to use at least forty percent of the production capacity specified in the production passport, but not less than twenty-five thousand decaliters per calendar quarter. An exception is made for the quarter in which the license is obtained (renewed).

All types of alcoholic products must be labeled in accordance with technical regulations. The circulation of alcoholic products in certain types of packaging that do not comply with technical regulations or without the necessary labeling is prohibited.

The import of ethyl alcohol, bulk wine, and distillate into the territory of the Republic of Kazakhstan is carried out with the presence of a license for the production of alcoholic products and a foreign trade contract (contract), its annexes, and (or) amendments.

The import of alcoholic products (excluding bulk wine and distillates) into the territory of the Republic of Kazakhstan also requires the presence of a license for activities related to the storage and wholesale trade of alcoholic products, except when the activity is carried out on the production site, and a foreign trade contract (contract), its annexes, and (or) amendments.

Ethyl alcohol and alcoholic products imported into the Republic of Kazakhstan must comply with technical regulations. The production and processing of ethyl alcohol, bulk wine, and distillates, as well as the production of alcoholic products in free trade zones, are prohibited.

Digital Mining Regulations

Starting from January 1, 2024, a system for charging fees for the issuance of licenses for activities in the field of digital mining comes into effect. The license fee is determined as follows:

  1. For the issuance of a Type I license, which includes conducting activities in digital mining using a data processing center owned by the digital miner on the basis of ownership or other legal grounds – 2000 Monthly Calculation Index (MCI).
  2. For the issuance of a Type II license, covering digital mining using a hardware and software complex owned by the digital miner on the basis of ownership and located in a data processing center – 5 MCI.
  3. For license reissuance, 10% of the rate established for the initial issuance of the license is charged.

New qualification requirements are introduced for a digital miner who owns a Type I data processing center. The requirements include providing information about the presence of an automated commercial electricity accounting system, special automation for load disconnection, and a telecommunication system compatible with the systems installed by the system operator and power transmission organization when connecting to their networks in accordance with the legislation of the Republic of Kazakhstan on power engineering.

Similar requirements are introduced in the section "Requirements for the connection of digital miners to electrical networks." In turn, digital mining pools are required to provide information about the distribution of digital assets among miners using a special form.

Licensing for Disinfection, Disinsection, and Deratization Services in Healthcare

Starting from January 1, 2024, the provision of services related to disinfection, disinsection, and deratization in the healthcare sector requires a license. Licenses are issued by the territorial departments of the Sanitary and Epidemiological Control Committee of the Ministry of Health of the Republic of Kazakhstan (service provider) through the official web portal of the "electronic government" at www.egov.kz and www.elicense.kz. To obtain a license, it is necessary to submit an application and electronic copies of the sanitary and epidemiological conclusion regarding the compliance of administrative, residential, and production premises, as well as a certificate of completion of the certification course on disinfection, disinsection, and deratization in the field of healthcare (for disinfectors and instructor-disinfectors).

The licensing process is electronic and fully automated. The license issuance period is 15 working days, and for license reissuance, it is 3 working days. The license fee is set at 10 times the minimum wage.

Insurance

In the event of the insurer's refusal to make insurance payments, the policyholder has the option to appeal to the insurance ombudsman for dispute resolution. According to amendments made to Article 839 of the Civil Code, the insurer must make a decision to refuse an insurance payment, providing a written notice to the policyholder with a justified explanation of the reasons for the denial. This notification also includes information about the policyholder's (insured, beneficiary) right to appeal to the insurance ombudsman to resolve disagreements, taking into account the peculiarities of the legislation of the Republic of Kazakhstan.

The procedure and deadlines for exchanging information on pension annuity agreements between the insurance organization, the organization for forming a unified insurance database (EISD), and the sending fund have been approved. The exchange of information when concluding, terminating, making changes or additions to existing pension annuity agreements between the sending fund and the insurance organization, as well as between insurance organizations, is carried out through the organization for forming the EISD in accordance with agreements between the insurance organization and the organization for forming the EISD, as well as between the sending fund and the organization for forming the EISD.

Within one working day from the date of the conclusion or termination of the pension annuity agreement, the insurance organization sends an electronic notification to the organization for forming the EISD about the conclusion or termination of the agreement with the applicant, the recipient, and the policyholder.

Transport

Starting from January 1, 2024, the cost of auto insurance began to depend on the region of vehicle registration due to the introduction of Rules for calculating adjustment coefficients to coefficients by the territory of vehicle registration for calculating insurance premiums for mandatory civil liability insurance of vehicle owners. New adjustment coefficients, depending on the region's loss experience, will be implemented when calculating the cost of auto insurance.

The organization responsible for forming and maintaining the database will annually calculate adjustment coefficients based on information about the actual loss experience of each territory of vehicle registration by July 1 of the calculation year. The approved adjustment coefficient sizes, published by the authorized body, will be used by insurers to adjust the coefficient by the territory of vehicle registration when calculating insurance premiums.

The fees for crossing the border of the Republic of Kazakhstan for cars, goods, and their passage through the electronic queue have also been approved. The cost depends on the booking time and may vary depending on the category of the vehicle and the chosen border crossing mode.

Land

Changes have been made to the Rules for the sale of land plots through electronic auctions. The process of auctioning land can now be carried out in two ways:

  1. Akimats (sellers) compile a list of land plots intended for auctions and publish it on the Public Cadastral Map (PCM).
  2. Individuals interested in acquiring a land plot can propose a vacant plot for auction. They authenticate on the portal, use the Integrated Cadastral Information System (ICIS) to display the desired plot on the PCM, and submit their proposal through the portal.

In the case of requesting a plot in a city of republican significance or other administrative districts for construction purposes, it is necessary to fill out a questionnaire on connection to utility networks.

The procedure for conducting auctions on the web portal has become more detailed. The winner is determined automatically, and a protocol on the results of the auction is generated, which is automatically sent to the ICIS with the status "Auction held."

A payment procedure has also been established, whereby the buyer transfers payments up to 10,000 MCI to the organizer through the "electronic government" payment gateway. If the payment amount exceeds 10,000 MCI, the winner attaches an electronic copy of the payment receipt.

Oil, Gas, Subsoil Use

As of January 1, 2024, new rules on equipping production facilities with instruments for metering crude oil, gas condensate, raw gas, and its processing products (commercial gas) have come into effect. The installation of metering devices at facilities is carried out in accordance with the technological scheme of the subjects' production facilities.

To avoid duplication when metering devices are already installed at receipt and delivery points of oil pipeline companies and gas transportation organizations, installation of metering devices at the subjects is not required.

Volume measurements of metering devices are carried out in accordance with certified measurement methods registered in the Register of the State System for Ensuring Uniformity of Measurements. These methods must comply with the requirements of standards such as GOST 8.587, GOST 30319.1, GOST 30319.2, GOST 30319.3, and the joint order of the Minister of Energy and the Minister of Industry and Infrastructure Development of the Republic of Kazakhstan dated March 11, 2019, No. 81 and No. 143.

Changes have also been made to the list and deadlines for equipping production facilities that require the installation of metering devices for crude oil and gas condensate. In particular, by January 1, 2025, certain types of equipment, including comprehensive raw gas treatment units, flare units, reverse injection units for raw gas, and others, depending on the functional purpose of the facility, must be installed at the facilities. Amendments have been made to the Rules for the Formation and Functioning of the Information System for Accounting for Crude Oil and Gas Condensate, Raw Gas, and Its Processing Products. This system is designed for the automated collection, processing, storage, and use of data on the quantity of crude oil and gas condensate, raw gas, and its products.
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