Kazakhstan’s Financial Sector Calls for VAT Reform on Guarantees and Factoring Services

• The new Tax Code in Kazakhstan exempts interest on loans and microloans from VAT, but not bank guarantees, sureties, or factoring operations.
• Factoring is not classified as a loan in the Tax Code, so it does not receive the VAT exemption, unlike in developed markets where it is considered a financial service and usually exempt.
• Aligning Kazakhstan’s tax regime with international practice could boost the competitiveness of its financial market and lower financing costs for businesses, especially SMEs.
• The issue of VAT exemption is considered a tax benefit and requires a position from the financial market regulator; tax relief is only possible if it supports the real sector and investment growth.
• There are concerns about the current tax treatment of income from debt instruments and securities, with suggestions to simplify rules and avoid discouraging investment.

Source: uchet.kz

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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