Taxation of dividends of non-residents – legal entities.
According to the law of the Republic of Kazakhstan “On limited and additional liability partnerships”, the meeting dedicated to the approval of the annual financial statements of the LLP must be held no later than 3 months after the end of the reporting financial year (article 44 of the Law), for most companies this is before March 31. General meeting , or the only participant of the LLP has the right to make a decision to exclude net income or a part of it from the distribution between the participants in the partnership. In the event that a decision is made on the distribution of income between the participants, each participant has the right to receive a part of the distributed income corresponding to his share in the charter capital of the partnership. Payment of dividends must be made by the partnership in cash within a month from the date of the decision by the general meeting on the distribution of net income. The procedure for taxation of income of non-resident legal entities operating without establishing a permanent establishment in the Republic of Kazakhstan is determined by Article 309 of the Tax Code of the Republic of Kazakhstan. In accordance with subparagraph 2 of paragraph 1 of Article 307, income taxable at the source of payment includes: income of non-residents from sources in the Republic of Kazakhstan, determined in accordance with Article 644 of the Tax Code of the Republic of Kazakhstan. In accordance with clause 10, clause 1 of Article 644 of the Tax Code of the Republic of Kazakhstan, the income of a non-resident from sources in the Republic of Kazakhstan is recognized, inter alia, the following type of income – income in the form of dividends received from a resident legal entity. subparagraph 5 of paragraph 1 of Article 646 of the Tax Code of the Republic of Kazakhstan determines that income of a non-resident from sources in the Republic of Kazakhstan in the form of dividends is subject to taxation at the source of payment at a rate of 15%. The procedure for calculating and withholding corporate income tax at the source of payment is determined by Article 645 of the Tax Code of the Republic of Kazakhstan.