In 2026, a civil law contract is an agreement for the performance of work, provision of services, or delivery of an agreed result for remuneration. For tax accounting purposes, the accountant determines the type of income and the rules applicable to it; reductions of other income taxable at the source of payment, as provided for by the Code, apply only if the established conditions are met (Article 436 of the Tax Code of the Republic of Kazakhstan).
What a Civil Law Contract Means
The main feature of a civil law contract is its focus on specific work, a service, or another agreed result. Remuneration is accrued on the basis of the contract and a document confirming the fulfilment of obligations, if such a document is stipulated by the terms of the contract. Therefore, it is not sufficient for the accountant to have only information about the individual and the payment amount: the contractor, the basis for accrual, the period, and the remuneration amount must be specified correctly.
In Payroll and HR Management for Kazakhstan, the “Accrual under Contracts” document is used to record remuneration:
- under contracts and acceptance certificates for the performance of work or provision of services;
- under commissioned work agreements.
Remuneration under a civil law contract should not automatically be recorded as salary. The calculation must take into account the individual’s status, the type of income, the terms of the contract, and the taxation parameters configured in the accounting system. This information must correspond to the source documents and the actual circumstances of the payment.
Particular attention is required when working with foreign nationals, non-residents, contractors of subdivisions, and individuals who have submitted documents for the application of tax reductions. For example, a reduction of other income by the amount of alimony or certain income from a personal subsidiary farm applies in accordance with the procedure and subject to the availability of the documents stipulated by the Code (Article 436 of the Tax Code of the Republic of Kazakhstan). Before performing the calculation, the accountant should verify that the software version being used is up to date and that the settings have been retained after the update.
What the Accountant Should Check When Making an Accrual
The taxes, contributions, and deductions applicable to remuneration are determined with regard to the type of income and the contractor’s status. Software settings alone are insufficient to determine the calculation procedure: the accountant must compare them with the contract, source documents, and the rules in effect on the payment date. The same parameters cannot be applied to all contractors without analysis.
The practical workflow may be as follows:
- Verify that the contract or acceptance certificate has been issued for the individual to whom the remuneration is accrued.
- Compare the dates of the contract, the document confirming fulfilment of the obligations, the accrual, and the payment.
- Check the period for which the remuneration is recorded.
- Verify the type of income and the taxation parameters established for it.
- If allocation by funding source is used, check that it has been completed.
- After the calculation, check the accrued amount, withholdings, and amount payable.
When posting the document, it is necessary to ensure that the contract corresponds to the contractor. If the supporting document has been issued for another individual, the accrual cannot be regarded as properly documented. This check prevents a situation in which remuneration is recorded for one contractor while the contract or acceptance certificate relates to another.
It is also necessary to distinguish between fields relating to Kazakhstan accounting and interface elements that are not used when recording the transaction in the particular configuration. For the calculation, the Kazakhstan taxation parameters stipulated for the selected type of income should be completed, and the resulting calculation should be checked for each contractor.
How to Record a Civil Law Contract in 1C
In Payroll and HR Management for Kazakhstan, remuneration is accrued using the “Accrual under Contracts” document. It specifies the contractor, contract or acceptance certificate, period, and amount. After posting, the accountant checks how the calculation data, settlements, and amount payable are recorded in the registers provided by the configuration.
The procedure for generating accounting entries depends on the configuration used and the adopted sequence for recording calculations in the accounts. Therefore, after making the accrual, the accountant must check not only the document’s status but also the subsequent recognition of the transaction in the accounting records. A posted calculation document and a transaction recorded in the accounting records are separate stages of data processing.
After posting, it is advisable to check:
- the amount of accrued remuneration;
- the results of calculating taxes, contributions, and deductions;
- the amount payable;
- the link to the contract or acceptance certificate;
- the recording in settlement registers;
- the subsequent recognition of the transaction in the accounting records.
When applying income reductions, the accountant must have the documents stipulated for the relevant grounds. In particular, for a reduction of income from a personal subsidiary farm, the Code requires an application, a certificate confirming the existence of such a farm, and confirmation from the local executive body concerning the land plot, animals, or poultry; the documents must be submitted to the tax agent at least once in each calendar year in which the reduction is applied (Article 436 of the Tax Code of the Republic of Kazakhstan).
When updating the configuration, the types of income, taxation parameters, calculation registers, and completion of tax reporting must be checked again. The check is performed using a test accrual or a document from the current period by comparing the results before and after the update.
The calculation parameters should be determined as of the transaction date. The contractor’s status, the type of income, the terms of the contract, and the documents required to apply a reduction provided for by the Code directly affect the processing of the payment. The customary approach used in previous periods does not replace checking the details of the specific accrual.
Frequently Asked Questions
Is a civil law contract an employment contract? — No. Under a civil law contract, the contractor performs work, provides a service, or delivers another agreed result for remuneration. In the accounting system, such a payment is recorded on the basis of a civil law contract and documents confirming performance.
What withholdings are calculated on remuneration under a civil law contract? — The calculation components are determined according to the type of income, the individual’s status, and the rules in effect on the payment date. The accountant must compare the software calculation results with the contract details and the contractor’s documents.
Why might the accrual and recognition of the transaction in the accounting records be shown separately? — These are separate stages of data processing in the accounting system. After calculating the remuneration, the subsequent recognition of the transaction in the accounting records should be checked in accordance with the document processing sequence adopted by the organisation.
Can any of the contractor’s contracts be selected for the accrual? — No. The supporting contract must be issued for the individual to whom the remuneration is accrued, while the terms, period, and accrual amount must correspond to the contract and performance documents.
What should be checked after updating 1C? — The settings for income types, taxation parameters, accrual calculation, amount payable, register entries, and completion of the applicable tax reporting should be checked.
Sources
Tax Code of the Republic of Kazakhstan, Article 436 “Reduction of Other Income Taxable at the Source of Payment”.