Dividend tax in Kazakhstan in 2026 is treated as income tax on income in the form of dividends. Dividends paid or payable, as defined by Article 13 of the Code, are recognized as taxable income in the form of dividends (Article 377 of the Tax Code of the Republic of Kazakhstan). The specific procedure depends on the recipient’s status, residency, payment method, and the existence of grounds provided for by the Code for an exemption or the application of an international treaty. Therefore, the same procedure cannot be applied to all payments.
How Dividend Taxation Works
For an accountant, the starting point is the classification of the payment. Dividends include dividends from the distribution of income and constructive dividends. Dividends from the distribution of income include, in particular, net income or a portion thereof payable on shares, income from units in a unit investment fund subject to the specified exception, net income or a portion thereof distributed by a legal entity among its founders or participants, as well as other types of income listed in the Code (Article 13 of the Tax Code of the Republic of Kazakhstan).
Taxable income in the form of dividends comprises dividends that have been paid or are payable. For the purposes of the relevant chapter, it also includes net income received by the trust management settlor from a legal entity acting as the trustee (Article 377 of the Tax Code of the Republic of Kazakhstan).
Consequently, the name of a payment in an agreement, participant’s resolution, or payment order is not sufficient in itself to classify it. The accountant must establish the substance of the payment and compare it with the list of dividends from the distribution of income and constructive dividends set out in Article 13 of the Tax Code of the Republic of Kazakhstan.
When preparing a payment, the accountant should consistently verify:
- whether the recipient is an individual or a legal entity;
- whether the recipient is a resident of the Republic of Kazakhstan;
- whether the payment corresponds to one of the types of dividends listed in the Code;
- whether the payment is made directly or through a nominee holder;
- whether the dividends relate to shares that are the underlying assets of depositary receipts;
- whether the non-resident is the beneficial owner of the income if an international treaty is to be applied;
- whether the documents required for the relevant taxation procedure are available.
The results of this verification determine which tax applies to dividends and which procedure the tax agent must follow. For a non-resident, the provisions of an international treaty concerning dividends apply when the established conditions are met, including the existence of a ratified international treaty, the timely submission of a residency document, the absence of a connection between the income and the activities of a permanent establishment in Kazakhstan, and the non-resident’s status as the beneficial owner of the income (Article 706 of the Tax Code of the Republic of Kazakhstan).
Dividends and Taxes in the Republic of Kazakhstan: Special Procedure for Depositary Receipts
If dividends are paid on shares that are the underlying assets of depositary receipts to a resident beneficial owner through a nominee holder, the tax agent may refrain from imposing withholding income tax on the income in the cases and according to the procedure provided for by the Code. For the income of a resident individual, the tax agent may also apply the rate specified in subparagraph 1 of Article 363 of the Code. These options are available only when all the documentary requirements of Article 354 of the Tax Code of the Republic of Kazakhstan are met simultaneously.
To apply this procedure, a list of depositary receipt holders or a document confirming ownership of them is required. The document must contain the surnames, first names, and patronymics of individual holders or the names of legal entity holders, information on the number and type of receipts, as well as the details of the individuals’ identity documents or the state registration numbers and dates of the legal entities (Article 354 of the Tax Code of the Republic of Kazakhstan).
In addition, a document confirming that the beneficial owner of the dividends is a resident of the Republic of Kazakhstan is required. It must be submitted to the tax agent no later than whichever of the dates specified in paragraph 3 of Article 705 of the Code occurs first (Article 354 of the Tax Code of the Republic of Kazakhstan).
The list of holders is prepared by an organization authorized to conduct depositary activities in the securities market of Kazakhstan or a foreign state, provided that an agreement on recording and confirming ownership rights to depositary receipts has been concluded between the resident issuer of the relevant shares and that organization. The document confirming ownership may be issued by a person providing nominee holding services in accordance with the laws of the Republic of Kazakhstan, from among the persons listed in Article 354 of the Tax Code of the Republic of Kazakhstan.
A different procedure applies to a non-resident beneficial owner. For dividends on shares that are the underlying assets of depositary receipts, the tax agent may apply the reduced rate provided for by the relevant international treaty if both a duly prepared list of holders and a document confirming the non-resident’s residency are available. The list must contain the information required by the Code concerning the owners, the number and type of receipts, and identification or registration documents (Article 707 of the Tax Code of the Republic of Kazakhstan).
When applying an international treaty to such payments, the tax agent must submit to the tax authority at its location, together with the tax return for the fourth quarter, a copy of the document confirming the residency of the non-resident taxpayer. The return must report the amounts of income accrued or paid, taxes withheld or exempted from withholding, income tax rates, and the names of the international treaties (Article 707 of the Tax Code of the Republic of Kazakhstan).
For payments to a resident, Article 442 expressly refers to Article 354: it determines the procedure for the tax agent to discharge the tax obligation and for refunding individual income tax withheld at the source of payment (Article 442 of the Tax Code of the Republic of Kazakhstan).
What an Accountant Should Check Before Payment in 2026
Before dividends are accrued and paid, it is advisable to compile a set of supporting documents for each recipient. The composition of the set depends on the classification of the income, the recipient’s residency, the payment method, and the applicable taxation procedure.
The practical procedure may be as follows:
- Check the resolution or other document on the basis of which the income is distributed.
- Compare the substance of the payment with the types of dividends from the distribution of income and constructive dividends (Article 13 of the Tax Code of the Republic of Kazakhstan).
- Identify the beneficial owner and determine their status and residency.
- Establish whether the dividends have been paid or are payable, and whether the income constitutes taxable income of the relevant category (Article 377 of the Tax Code of the Republic of Kazakhstan).
- Determine whether a nominee holder and depositary receipts are involved in the payment.
- For a resident recipient, obtain the documents provided for by Article 354 of the Tax Code of the Republic of Kazakhstan: a list of holders or confirmation of ownership of the receipts and a residency document.
- For a non-resident recipient, determine whether an international treaty applies and check the conditions of Article 706 of the Tax Code of the Republic of Kazakhstan and, where payment is made through a nominee holder in respect of depositary receipts, the conditions of Article 707 of the Tax Code of the Republic of Kazakhstan.
- Check that the information is complete and that the deadline for submitting the residency document has been met.
- Under the applicable provision of the Code, determine the rate, the grounds for an exemption or rate reduction, the procedure for withholding and remitting the tax, and the reporting of the payment.
If the documents required for the special procedure applicable to depositary receipts are absent or do not contain the mandatory information, the conditions of Articles 354 or 707 of the Tax Code of the Republic of Kazakhstan are not met. In that case, the tax agent does not apply the special procedure provided for by those articles on the basis of an incomplete set of documents.
Dividends are classified by the Code as a type of income, while dividends paid or payable are classified as taxable income in the form of dividends (Articles 13 and 377 of the Tax Code of the Republic of Kazakhstan). Therefore, the provisions under consideration concern income tax, including its withholding at the source of payment by the tax agent.
Frequently Asked Questions
Are dividends subject to tax? — Dividends paid or payable are recognized as taxable income in the form of dividends (Article 377 of the Tax Code of the Republic of Kazakhstan). An exemption, reduced rate, or other special procedure applies only where the grounds provided for by the Code exist and the established conditions are met.
What tax applies to dividends in Kazakhstan? — Income tax applies to income in the form of dividends. The specific procedure is determined based on the type of recipient, the recipient’s residency, beneficial-owner status, the payment method, and the applicability of an international treaty or the special procedure for depositary receipts.
Are taxes paid on dividends distributed through a nominee holder? — Special rules are provided for dividends on shares that are the underlying assets of depositary receipts. Article 354 of the Tax Code of the Republic of Kazakhstan applies to a resident beneficial owner, while Article 707 of the Tax Code of the Republic of Kazakhstan applies to a non-resident claiming a reduced rate under an international treaty. In both cases, the prescribed set of documents is essential.
Can an international treaty be applied to a non-resident’s dividends? — Yes, if the conditions of Article 706 of the Tax Code of the Republic of Kazakhstan are met: the treaty with the non-resident’s state of residence has been concluded and ratified, the residency document has been submitted within the prescribed period, the income is not connected with the non-resident’s permanent establishment in Kazakhstan, and the non-resident is the beneficial owner of the income. For payments through a nominee holder in respect of depositary receipts, the special requirements of Article 707 of the Tax Code of the Republic of Kazakhstan must be taken into account.
What does dividend tax in 2026 change for an accountant? — The calculation must be performed under the provisions of the Code in effect on the date the relevant tax obligation arises. Before applying a rate or exemption, the accountant determines the type of income, the recipient’s status and residency, the payment method, and the availability of the mandatory supporting documents.
Are dividends an indirect tax? — Dividends are a type of income (Article 13 of the Tax Code of the Republic of Kazakhstan). Article 377 of the Tax Code of the Republic of Kazakhstan classifies dividends paid or payable as taxable income in the form of dividends, while special provisions govern the application of income tax.
Sources
- Article 13. Dividends
- Article 377. Income in the Form of Dividends
- Article 354. Discharge of the Tax Obligation on Dividends on Shares That Are the Underlying Assets of Depositary Receipts
- Article 442. Procedure for the Tax Agent to Discharge the Tax Obligation
- Article 706. Application of an International Treaty to a Non-Resident’s Income in the Form of Dividends
- Article 707. Partial Exemption of a Non-Resident’s Income from Depositary Receipts