A CSHI category is a designation used in accounting for an individual’s status, which is taken into account when determining the person’s participation in Kazakhstan’s compulsory social health insurance system. For an accountant, what matters is not the category name itself, but the documented circumstances: the nature of the relationship with the individual, the basis for the payment, and the validity period of the relevant status. The articles of the Tax Code cited in the “Sources” section do not establish a list of CSHI categories, rates, remittance deadlines, or rules for calculating such payments. Therefore, a person cannot be assigned to a specific category solely on the basis of these articles.
CSHI Categories in Kazakhstan: What This Term Means
In practice, a CSHI category generally means the status of a person that is specified or taken into account when processing compulsory social health insurance calculations. It is neither a profession nor a position. One person may be involved in different legal relationships and receive payments on different grounds, so an accountant cannot select the calculation procedure based only on the name of the accrual, the position, or the recipient’s verbal explanation.
To determine the applicable procedure, establish the following in sequence:
- whether the individual has an employment relationship with the organization;
- what type of agreement governs the relationship and what its actual subject matter is;
- the period for which and the basis on which the payment is accrued;
- whether the person carries out independent activities, if this is relevant to their status;
- whether there is a document confirming a special status and whether it is valid during the accounting period;
- what information about the person has been entered into the HR and accounting systems;
- whether the relationship with the individual changed during the month of accrual.
The category helps organize calculations and documentary controls, but it does not replace analysis of the specific transaction. The same status designation in the system does not mean that all payments to an individual are processed identically. For each accrual, the accountant compares the information about the person, the content of the agreement, the accounting period, and the supporting documents.
It is important to distinguish between the person’s status, the basis for the payment, and the type of payment. These elements are related but are not interchangeable. First, the actual circumstances and the accrual period are established, and then the accounting procedure prescribed for them is selected. The internal instructions should set out the sequence of this review and the list of documents that the accountant accepts as confirmation.
How an Accountant Should Determine the CSHI Category
Start with the source and HR documents. For an employee, review the employment contract, the employer’s employment order, information on the employment period, and the income accrual documents. When settling accounts with a contractor, analyze the content of the agreement, the subject matter of the obligations, the performance period, and the documents confirming the work performed or services rendered. The title of the agreement alone is insufficient if its content and the transactions actually documented indicate a different type of relationship.
A practical review procedure can be structured as follows:
- Identify the individual and verify the accuracy of their data in the HR and accounting systems.
- Determine the basis for the payment: salary, remuneration under an agreement, compensation, or another payment.
- Establish the period to which the accrual relates and the person’s status during that period.
- Check the documents on the basis of which the CSHI category was selected in the system.
- Compare the documents with the rules of the relevant legislation in force during the corresponding period.
- Record the basis for the selected procedure in the calculation document, employee record, or internal register.
An individual’s verbal statement is insufficient to change accounting data. The document received should be checked for its content, issue date, and validity period. If the status arose, changed, or ended during the accounting period, the accountant records the dates of the change in the working register and applies the rules established by the relevant legislation for the corresponding period.
The category should not be automatically carried forward from the previous month without checking the source data. Rechecking is particularly important when hiring or dismissing an employee, concluding a new agreement, changing the basis for a payment, following a prolonged break in accruals, correcting prior periods, or receiving new supporting documents. If the system’s automatic setting conflicts with the documents, the decision should be based on the duly documented information and applicable rules, rather than the previously selected reference-list value.
The Tax Code applies to persons defined by it as payers of taxes and payments to the budget, as well as participants in the relevant procedures (Article 23 of the Tax Code of the RK). However, this general provision does not contain a classification of CSHI participants. Articles 129, 317 and 319 of the Tax Code of the RK respectively govern refunds of excess tax to certain categories of taxpayers, certain expenses of a subsoil user, and income of organizations conducting insurance activities. They cannot be used to assign a CSHI category to an individual.
What to Do When Making Accruals and Reviewing Accounting Records
After determining the status, the accountant checks which procedure applies to the organization and the specific payment recipient. The organization’s obligations and the amounts taken into account in settlements with the individual are considered separately. One type of payment cannot be substituted for another, and the category selected in the system cannot be treated as a sufficient basis for the calculation.
The review worksheet may contain:
- identification details of the payment recipient;
- the type of agreement, its execution date, and validity period;
- the basis and period of the accrued income;
- the CSHI category selected in the accounting system;
- the name, date, and validity period of the supporting document;
- the date on which the organization received the document;
- a description of the calculation procedure applied;
- information on adjustments for prior periods;
- the result of reconciling accruals with HR data.
Specific categories, rates, calculation base limits, remittance deadlines, and grounds for exemption must be determined under the relevant rules in force during the accrual period. The cited articles of the Tax Code of the RK do not contain such parameters. For this reason, a previous system setting, last year’s memo, or a category copied from the previous month cannot be the sole basis for the calculation.
In accounting, CSHI information should be regularly reconciled with HR documents, agreements, and accrual registers. Particular attention should be paid to newly hired and dismissed employees, contractors under agreements, accruals made after the relationship has ended, corrections for prior periods, and cases involving changes to a documented status. Such reconciliation makes it possible to identify not only an incorrect category but also an incorrect period of its application.
If a discrepancy is identified, first determine which source information was incorrect, the date from which it was applied, and which accruals were affected. Then document the change to the accounting data, recalculate amounts in accordance with the prescribed procedure, and check the related calculation and reporting indicators. The reason for the correction and the details of the supporting document should be retained in the register so that the procedure followed can be reconstructed during a subsequent review.
The mention of CSHI in a cost estimate, calculation, or other calculation form does not in itself determine the category of a specific person. Such a line reflects the structure of the relevant calculation but does not replace documents concerning the individual’s status or the relevant rules. Therefore, it is incorrect to use the name of a cost item from a form as the basis for assigning a category in an HR or accounting system.
Common Errors When Selecting a Category
The first common error is determining the status solely on the basis of the individual’s statements. The second is treating information entered into the system once as valid indefinitely. The third is confusing the person’s status, the basis for the payment, and the type of payment. The fourth is selecting a category based on the position or the name of the accrual without reviewing the agreement and the payment period.
A risk also arises when the same procedure is applied to all individuals without analyzing the documents. An employee and a contractor may receive payments from the same organization, but the grounds for settlements with them differ. At the same time, different names of accruals do not in themselves prove that the legal grounds differ: the accountant must review the substance of the transaction and the documents by which it was formalized.
Another error is using provisions that contain the words “insurance” or “certain categories” without considering their subject matter. For example, Article 319 of the Tax Code of the RK concerns the income of a taxpayer conducting insurance activities under insurance and reinsurance contracts. It does not describe categories of individuals in the CSHI system. Similarly, the reference to certain categories of taxpayers in Article 129 of the Tax Code of the RK relates to the refund of excess tax, not to the status of an insured person.
To reduce the risk, use a standardized checklist and retain supporting evidence together with the calculation documents. If the documents provided are insufficient to assign the person to a special category, only confirmed information should be recorded in the accounting record. A category should not be assigned by analogy with another employee, a previous period, or another organization.
Frequently Asked Questions
What is a CSHI category in simple terms? — It is a designation used in accounting for a person’s status that helps select the applicable procedure for CSHI calculations. It is based on the circumstances of the specific period and supporting documents, not merely on the category name in the system.
Can the category be determined solely from the employee’s position? — No. The position does not disclose the basis for the payment, the accrual period, or the person’s documented status. HR documents, agreements, and information relating to the accounting period must be reviewed.
Does the CSHI category need to be checked every month? — Regular checks of the source data should be arranged, and the review must be repeated whenever the relationship, basis for payment, documents, or the individual’s status changes. Automatically carrying forward the previous value without checking increases the risk of error.
Can the categories, rates, and deadlines be determined from the articles of the Tax Code of the RK listed below? — No. Article 23 of the Tax Code of the RK establishes general provisions on the application of tax legislation, while Articles 129, 317 and 319 govern other tax matters. These provisions do not contain a list of CSHI categories, rates, or remittance deadlines.
Can a cost estimate form that specifies CSHI be used to determine a person’s category? — No. A line in a cost estimate or calculation describes a specific expense calculation. It does not confirm an individual’s status or establish the procedure for applying a CSHI category.
Sources
- Article 23 of the Tax Code of the RK — application of the tax legislation of the Republic of Kazakhstan.
- Article 129 of the Tax Code of the RK — procedure for refunding excess tax to certain categories of taxpayers.
- Article 317 of the Tax Code of the RK — deduction for certain expenses of a subsoil user.
- Article 319 of the Tax Code of the RK — income of a taxpayer conducting insurance activities under insurance and reinsurance contracts.