Regulatory updates - Kazakhstan

Kazakhstan's 2026 Tax Code reform introduces a fundamental change to VAT credit management, shifting from automatic crediting to an active, system-driven allocation process within the IS ESF e-invoicing platform. Here are the main implications for taxpayers:

From automatic to managed VAT crediting

Under the new rules, VAT credit is no longer an automatic outcome of receiving an electronic invoice. Taxpayers must now actively select which incoming e-invoices are used for credit purposes within IS ESF, either individually or in bulk for an entire reporting quarter. For each selected invoice, the system produces a notification confirming the invoice registration number, the VAT amount credited, and the relevant tax period. Note that VAT can only be credited if it is confirmed in the IS ESF system before submitting the VAT declaration.

Partial VAT allocation and adjustments

The new mechanism allows taxpayers to partially credit VAT from a single e-invoice, spreading it across different reporting periods rather than claiming the full amount at once. This is particularly useful where goods or services are re-invoiced, reallocated, or consumed in phases, ensuring VAT recovery reflects actual business activity rather than immediate full recovery. Previously allocated amounts can also be adjusted upward or downward over time, as long as changes are properly recorded within IS ESF.

Compliance implications and VAT control

The new mechanism is particularly relevant for businesses involved in re-invoicing, pass-through costs, agency models, and complex supply chains. By allowing VAT to remain temporarily uncredited, Kazakhstan prevents premature VAT recovery where costs are intended to be on-charged, while giving tax authorities greater visibility over deferred and partial VAT credit claims.

To meet these requirements, businesses will need to update their VAT accounting procedures, align ERP systems with IS ESF workflows, and ensure closer coordination between tax, finance, and IT functions. Errors or omissions in invoice selection or allocation may directly impact VAT recovery and invite scrutiny from the tax authorities.

On December 1, 2025, Kazakhstan’s Ministry of Finance and the Ministry of AI and Digital Development issued a joint order amending the rules and timelines for the Digital VAT pilot project. Initially scheduled to end on December 31, 2025, the pilot is now extended through December 31, 2026.

Obligations

The pilot project aims to modernise VAT refund processes by leveraging the Digital Tenge system and electronic invoicing. Under the updated rules:

• State revenue authorities will provide clarifications, transmit data to the Digital Tenge system, process payment information, and confirm VAT refund amounts.
• VAT refunds under the pilot are processed within 15 working days instead of the standard 55–75 days, without tax audits.
• Taxpayers participating in the pilot must use digital tenge with VAT marking, which restricts funds for specific purposes.
• Payment documents must include the registration number of the relevant e-invoice. For certain budget codes, taxpayers must indicate the customs declaration number or supporting document details.
• Prepayments under electronic contracts require the contract number in both the payment order and the electronic invoice.
• Digital tenge marked for VAT cannot be used for other purposes or withdrawn as cash.

System operations

Payments are processed through second-tier banks, with VAT amounts marked and routed via the Digital Tenge system. The National Bank ensures settlement by transferring redeemed digital tenge to the Unified Treasury Account.

Impact on electronic invoicing

If VAT is paid in digital tenge, electronic invoices cannot be revoked except under specific conditions. Additional rules apply for corrections and cancellations of invoices linked to VAT payments.

Effective period

The order takes effect on December 21, 2025, and applies retroactively to relationships arising since October 7, 2024, until December 31, 2026.

On July 18, 2025, the President of Kazakhstan signed the new Tax Code, which will take effect on January 1, 2026.

These measures are designed to improve transparency, expand the tax base, and align with international standards.

VAT rate changes

The standard VAT rate will increase from 12% to 16%. To reduce the impact on essential sectors, the Code introduces reduced VAT rates:

• 5% in 2026, rising to 10% in 2027, for pharmaceuticals, medical equipment, and healthcare services.
• 10% from 2027 for print publications and other socially important goods (to be defined in implementing regulations).

Essential food items and public healthcare services will remain VAT-exempt. Bank commissions will also become subject to VAT, and developers will lose their VAT exemption.

VAT registration threshold

The VAT registration threshold will be set at KZT 40,000,000 (approx. EUR 80,000), replacing the previous 15,000 MCI benchmark. This change will bring more businesses into the VAT system, particularly SMEs.

Electronic invoicing and the e-Tamga system

Kazakhstan’s new Tax Code introduces the e-Tamga system as part of its digital tax reforms. The system will become mandatory on January 1, 2026, and is designed to automate electronic invoicing while enforcing stricter VAT compliance. Unlike the current process, businesses must pay VAT at the transactional level in advance before they can issue an electronic invoice.

• How the e-Tamga system works

The e-Tamga system automates the process of issuing e-invoices. If a company does not have sufficient funds to cover the VAT amount, the system will block invoice issuance.

• Who is affected by e-Tamga system

The advance VAT payment rule will initially apply to specific groups, including:

• Newly registered VAT payers.
• Legal entities that have undergone re-registration due to a change in the full composition of their participants.
• Persons whose electronic invoice issuance suspension has been cancelled.
• VAT-registered entities that annulled electronic invoices in response to official notifications requesting verification of the authenticity of their transactions.

Draft regulation on invoice rules

The Ministry of Finance has published a draft regulation to implement Article 207(2) of the Tax Code, which governs invoice issuance and format. The draft aims to:

• Mandate the use of e-invoices in the state information system for traceable goods and related transactions.
• Improve transparency and control over goods and services transactions, including purchases from non-residents.
• Simplify document flow and reduce processing and storage costs.
• Ensure correct VAT crediting and confirm expenses for corporate income tax deductions.

The draft is available for public discussion until September 25, 2025.