The Astana International Financial Centre (AIFC) operates under a distinct legal and tax framework within Kazakhstan, and its incentive regime is being reshaped by two significant legislative developments: the new Tax Code (Code No. 214-VIII of 18 July 2025, in force from 1 January 2026) and the Digital Code (No. 255-VIII, signed 9 January 2026, effective July 2026). International investors and AIFC-resident entities must now reassess their structuring assumptions, as both instruments introduce changes affecting corporate income tax, personal income tax, non-resident obligations and the regulatory treatment of digital assets – while certain proposed simplifications, including the abolition of the tax residency confirmation fee for AIFC participants, remain at the proposal stage only.
The Legislative Landscape: Two Codes, One Strategic Territory
Kazakhstan's decision to consolidate its tax rules in a new codified instrument, and simultaneously to regulate the digital economy through a separate Digital Code, reflects a deliberate policy choice to modernise without abandoning the preferential logic on which the AIFC was originally built. The new Tax Code (No. 214-VIII) entered into force on 1 January 2026, replacing provisions that had governed AIFC participants under the prior framework. The Digital Code (No. 255-VIII) came into effect in July 2026 and directly addresses crypto-asset activities – a core growth segment for AIFC-licensed entities.
For practitioners and corporate clients, the immediate challenge is not simply reading each instrument in isolation. It is understanding how the AIFC's autonomous legal regime – anchored in English common law, with disputes resolved before the AIFC Court or the International Arbitration Centre (IAC) – interacts with national tax legislation that, by constitutional design, applies throughout Kazakhstan's territory. That interaction has never been entirely clean, and the 2026 instruments introduce new friction points alongside new opportunities.
Corporate Income Tax: The 25% Rate and AIFC Carve-Outs
One of the most discussed features of the new Tax Code is the introduction of a 25% corporate income tax (CIT) rate for banks and gambling operators. For most AIFC participants, this headline rate does not apply directly – AIFC-licensed financial services entities have historically benefited from reduced or zero CIT rates under the AIFC's founding constitutional statute. However, the boundary between entities that qualify for AIFC tax preferences and those that fall within the general CIT regime requires careful analysis under the 2026 Code.
The critical question is whether an entity's AIFC licence category is sufficient on its own to preserve access to preferential rates, or whether additional conditions – relating to substance, income sourcing or activity thresholds – must be satisfied under the new Code. The 2026 Tax Code does not appear to have eliminated AIFC preferences outright, but the interaction between the AIFC constitutional statute, the new Code and any implementing regulations issued by the Astana Financial Services Authority (AFSA) will determine the practical scope of those preferences. Clients should not assume continuity without a formal review.
If you are assessing the tax position of an AIFC-licensed entity under the 2026 framework, our team can assist with a structured analysis. Please contact us at info@ferrazwhitmore.com or visit our contacts page.
Personal Income Tax: Progressive Rates and Residency Planning
The new Tax Code introduces a progressive personal income tax (PIT) structure, replacing the flat rate that had been a feature of Kazakhstan's PIT regime. This change has direct relevance for AIFC participants in several respects. Highly paid financial professionals, fund managers and fintech executives working within the AIFC may face a materially higher effective PIT burden depending on where their income brackets fall under the new progressive schedule.
Tax residency status becomes correspondingly more important. Kazakhstan's rules on tax residency – determining whether an individual is taxed on worldwide income or only on Kazakhstan-source income – are set out in the new Code and interact with Kazakhstan's network of double tax treaties. For mobile executives splitting time between Astana, London, Lisbon, Dubai or other financial centres, the residency determination is rarely straightforward. The treaty position, days-of-presence tests and the location of one's centre of vital interests all feed into the analysis.
A proposal under consideration as of July 2026 would abolish the administrative fee currently charged for confirming the tax residency of AIFC residents. This would reduce a compliance friction point for individuals and entities seeking to invoke treaty protections or demonstrate non-resident status to foreign counterparties. However, this remains a draft proposal under consultation – it has not been enacted as law as of the date of this analysis. Clients should not treat it as a current entitlement.
Non-Resident Taxation and Withholding Tax Mechanics
The new Tax Code also introduces changes affecting non-residents deriving income from Kazakhstan sources. Withholding tax obligations – on dividends, interest, royalties and service fees paid to non-resident entities – are among the most practically significant areas for cross-border structures involving AIFC entities as intermediate or holding vehicles.
The rate applicable to any specific payment will depend on the applicable double tax treaty, if one exists between Kazakhstan and the non-resident's jurisdiction of tax residence. Where no treaty applies, domestic withholding rates under the 2026 Code govern. Structures that relied on specific treaty positions or domestic exemptions under the prior Code should be reviewed to confirm those positions are preserved, varied or newly available under the 2026 framework.
For AIFC-licensed entities making outbound payments, the analysis is symmetric: payments from AIFC participants to foreign counterparties may engage withholding obligations in the foreign jurisdiction, and the AIFC entity's own residency status – as established under Kazakhstan law and confirmed by the relevant authority – will determine whether treaty relief is available. This is precisely the context in which a formal tax residency confirmation from Kazakhstani authorities has practical value, making the pending fee abolition proposal relevant even if not yet operative.
Digital Assets, the Digital Code and AIFC-Licensed Crypto Participants
The Digital Code (No. 255-VIII), in force from July 2026, establishes a legislative basis for the regulation of digital assets and crypto-related activities in Kazakhstan. Within the AIFC, AFSA had already developed a regulatory framework for digital asset service providers, crypto exchanges and tokenised securities. The Digital Code introduces national-level rules that sit alongside – and in some respects above – the AIFC's own framework.
The tax treatment of crypto-asset income, tokenised returns and digital asset disposals is an area where the interaction between the Tax Code and the Digital Code will be examined closely by practitioners. The new Tax Code's treatment of income characterisation – capital gain versus ordinary income, or a category specific to digital assets – will affect both the rate and the reporting obligations for AIFC-licensed crypto participants.
Internationally, the relevance of DAC8 and the broader movement toward mandatory crypto-asset reporting standards (developed through the OECD's Crypto-Asset Reporting Framework) should not be overlooked. Although DAC8 is a European Union instrument applying directly to EU-based intermediaries and service providers, AIFC-licensed entities with EU-connected clients, EU investors or EU correspondent relationships may find themselves within scope of DAC8 reporting obligations through their counterparties. Similarly, the direction of global regulatory travel – including the Pillar Two global minimum tax framework and its interaction with preferential regimes like the AIFC's – is a strategic consideration for group structures using Kazakhstan as a holding or operating hub.
Pillar Two and the AIFC's Preferential Regime: A Structural Tension
The OECD's Pillar Two framework, which establishes a global minimum effective tax rate for large multinational groups, creates structural tension with preferential tax regimes worldwide, and the AIFC is not immune. Kazakhstan has not yet fully enacted Pillar Two rules as part of the 2026 Tax Code – the position on national implementation remains subject to ongoing developments and should be treated as pending. However, multinational groups with an ultimate parent or constituent entity in a Pillar Two jurisdiction (including most EU member states and the United Kingdom) must model the top-up tax exposure that could arise if AIFC-level effective rates fall below the global minimum threshold.
Groups relying on AIFC preferences to achieve low effective rates on Kazakhstani income should engage in a Pillar Two impact assessment as a matter of priority. The analysis turns on the computation of the effective tax rate at the jurisdictional level under the GloBE rules, adjusted income and covered taxes – a technical exercise that requires both Kazakhstani tax law expertise and familiarity with the GloBE model rules. Our tax law team in Kazakhstan works alongside colleagues experienced in cross-border Pillar Two analysis. To discuss your group's position, please reach out to info@ferrazwhitmore.com or see our Kazakhstan tax law services page.
Practical Impact: What AIFC Participants Should Do Now
The cumulative effect of the 2026 Tax Code and the Digital Code is that the tax and regulatory environment for AIFC participants is materially more complex than it was under prior rules. The following practical steps reflect a prudent approach to the transition:
- Review existing AIFC licence category and qualifying activities to confirm that preferential CIT treatment is preserved under the 2026 Code's specific conditions, rather than assumed on the basis of prior practice.
- Model the PIT impact of the new progressive rate structure for key personnel, including executives, fund managers and senior compliance staff, taking into account tax residency status and applicable treaty relief.
- Audit withholding tax obligations on outbound and inbound payments, particularly where the counterparty's jurisdiction has changed its treaty network or where new treaty provisions have entered into force.
- Assess digital asset income characterisation under the intersection of the Tax Code and the Digital Code, including the reporting obligations that may arise for crypto-asset transactions involving AIFC-licensed entities.
- Monitor the draft amendment on abolition of the tax residency confirmation fee – if enacted, update internal compliance procedures to reflect the reduced administrative burden; do not act on it as if it were current law.
- Conduct a Pillar Two exposure assessment if your group has a parent or constituent entity in a jurisdiction that has enacted GloBE rules, and the AIFC entity contributes material income to the jurisdictional effective tax rate calculation.
- Review corporate governance and substance arrangements within the AIFC, given that substance requirements underpin both preferential tax treatment and treaty access. The Kazakhstan corporate law practice can assist with substance structuring alongside tax analysis.
Open Questions and Interpretation Risks
Several areas of the 2026 framework remain genuinely uncertain. The precise scope of AIFC preferences under the new Code has not been tested before the AIFC Court or in published guidance from AFSA or the Kazakhstani tax authorities. Administrative practice – how tax inspectors apply the Code to AIFC entities in routine audits and residency certificate requests – will take time to crystallise.
The interaction between the Digital Code and the Tax Code on crypto-asset income is likely to generate interpretive disputes in the near term. Characterisation questions (is a particular token a financial instrument, a commodity, a currency or something else entirely?) will have material tax consequences and may need to be resolved through advance rulings, administrative appeals or – in the worst case – litigation before the IAC or national courts. Investors should build adequate legal review time into transaction timelines and avoid relying on informal guidance.
There is also the broader question of how Kazakhstan's compliance with international standards – including DAC9 (the EU's implementation of the Pillar Two directive) in so far as it affects EU-based investors in AIFC funds, and the OECD's exchange of information standards – will shape the practical risk environment for cross-border structures. Kazakhstan is not an EU member state, but its financial sector's integration with European capital markets means that EU regulatory developments have indirect reach into AIFC structures.
Strategic Recommendations for International Clients
For foreign investors, fund sponsors and multinational groups considering or currently operating through the AIFC, the 2026 legislative transition calls for a structured review rather than a reactive one. The AIFC's underlying value proposition – English common law, international arbitration, a concentrated financial ecosystem and residual tax preferences – remains intact. What has changed is the precision with which those preferences need to be claimed and documented.
A jurisdiction-by-jurisdiction comparison of effective tax rates, taking into account the 2026 Code's changes, Pillar Two mechanics and applicable treaties, should inform structuring decisions going forward. The AIFC remains a credible platform for Central Asian investment activity, capital markets operations and digital asset services – but it is no longer a jurisdiction where preferential treatment can be assumed without formal analysis. For clients already established in the AIFC, a periodic tax health check is a proportionate response to the pace of legislative change.
For a comprehensive guide to the 2026 Tax Code's provisions as they affect foreign investors and AIFC participants, please see our Kazakhstan Tax Code 2026 Guide. If you would like to discuss your specific situation with our team, please write to info@ferrazwhitmore.com or visit our contacts page to arrange a consultation.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.