Effective tax structuring in Kazakhstan requires a clear understanding of the holding, financing and exit options available under Kazakhstani law, the incentives offered within the Astana International Financial Centre (AIFC), and the cross-border constraints imposed by international anti-avoidance frameworks. Since 1 January 2026, a new Tax Code has been in force, making it essential for international businesses to reassess existing structures against current rules before proceeding with any transaction or reorganisation. Ferraz & Whitmore advises on the full spectrum of tax structuring, tax risk management and transactional tax work in Kazakhstan, coordinating with local counsel to provide integrated, commercially grounded advice.
When Businesses Seek Specialised Tax Structuring Advice in Kazakhstan
Most engagements arise at a moment of change: an acquisition, a group reorganisation, a redomiciliation into or out of Kazakhstan, a financing round, or the realisation that an inherited structure no longer performs as intended. Common triggers include a cross-border deal where the tax treatment of the exit is unclear, a transfer pricing review by the State Revenue Committee of the Ministry of Finance, or a transaction due diligence process that surfaces undisclosed tax exposures.
Other clients approach us after receiving an adverse ruling or following an audit that has identified technical weaknesses in their holding or financing arrangements. In each case, the starting point is the same: an accurate picture of the current structure, the applicable rules under the new Tax Code in force since 1 January 2026, and the international overlay that applies to the group as a whole.
Core Areas of Tax Structuring in Kazakhstan
Holding, Financing and IP Structures
Choosing how to hold Kazakhstani assets involves several interdependent decisions: the jurisdiction and form of the holding entity, the nature of the financing between group members, and where intellectual property sits within the group. Each choice affects withholding tax on dividends, interest and royalties paid out of Kazakhstan, the availability of treaty relief, and the substance requirements that must be met to defend treaty or regime access.
The AIFC offers specific tax incentives that can be relevant to international groups with a genuine presence in Astana. Whether those incentives apply, and whether a structure built around them will withstand scrutiny, depends on substance – the quality of management, decision-making and operational activity actually carried out at the AIFC entity. Substance is not a formality: regulators and tax authorities in Kazakhstan and in counterparty jurisdictions increasingly examine it closely.
For groups with a European dimension, the holding structure must also be tested against the Anti-Tax Avoidance Directive (EU) 2016/1164 (ATAD), which introduced an interest limitation rule, exit taxation provisions, a general anti-abuse rule and controlled foreign company (CFC) rules. Hybrid mismatch rules were further extended by Directive (EU) 2017/952. Even where the Kazakhstani entity is outside the EU, a European parent or intermediate holding company will typically be subject to these rules, which can affect the efficiency of cross-border payments and the tax treatment of exits. Our colleagues regularly work across both the Kazakhstani and the European legs of such structures; where relevant, we can also refer clients to analysis of analogous exemption mechanisms in other jurisdictions, such as the UK Substantial Shareholding Exemption, which illustrates how participation relief is structured and conditioned at the holding level.
Tax Aspects of Transactions and Corporate Procedures
Acquisitions, disposals, reorganisations, redomiciliations and liquidations each carry distinct tax consequences under Kazakhstani law. The sequencing of steps in a reorganisation, the form of consideration in a sale, and the method of repatriation of proceeds can all affect the ultimate tax cost significantly. Transaction tax advice therefore needs to be integrated into deal structuring from the outset, not addressed as an afterthought after commercial terms are agreed.
Tax due diligence on a Kazakhstani target typically covers the adequacy of transfer pricing documentation, the robustness of any treaty positions taken, historical compliance with disclosure obligations, and any open audit periods. Findings from due diligence feed directly into price negotiations, warranty and indemnity coverage, and post-completion restructuring plans. Our corporate law practice in Kazakhstan works in close coordination with tax structuring on all transactional mandates.
Tax Risk Management and the Control Framework
Tax risk management goes beyond compliance. It involves building and maintaining a tax control framework that allows the business to identify, assess and respond to tax risks before they escalate into disputes. For international groups operating in Kazakhstan, the key risk areas typically include transfer pricing – the pricing of intercompany transactions in goods, services, financing and IP – and the mandatory disclosure of cross-border arrangements where required.
Under Directive (EU) 2018/822 (DAC6), certain cross-border arrangements involving at least one EU member state must be disclosed to tax authorities if they exhibit specified hallmarks. The directive applies regardless of whether the arrangement involves a non-EU jurisdiction such as Kazakhstan; what matters is whether an EU intermediary or taxpayer is involved. Penalty regimes for non-disclosure vary across national implementations and can be significant. Identifying whether a structure or transaction triggers a reporting obligation – and documenting the analysis either way – is an essential part of transaction preparation.
Ongoing risk management also requires monitoring changes in the law. The new Tax Code in force since 1 January 2026 represents a substantial development in the Kazakhstani tax landscape. Groups that have not reviewed their structures and compliance positions against the new code should do so promptly.
If you are assessing a structure, preparing a transaction or managing an active tax risk in Kazakhstan, we would welcome the opportunity to discuss your situation. Please contact us at info@ferrazwhitmore.com or visit our contacts page.
Dispute Prevention and Resolution
The most cost-effective way to manage tax disputes in Kazakhstan is to reduce the likelihood of them arising. That means maintaining thorough transfer pricing documentation, ensuring that treaty positions are defensible, and obtaining advance clarity where the rules are ambiguous. The Kazakhstani framework provides certain mechanisms for seeking guidance from the tax authority, though the availability and binding effect of such rulings is subject to national rules that should be assessed in context.
Where a dispute does arise, the standard administrative path begins with a complaint to the appeals commission of the Ministry of Finance, before proceeding to the courts if the administrative stage does not resolve the matter. Businesses operating within the AIFC have access to the AIFC Court, the Astana International Arbitration Centre (IAC) and the AFSA regulatory framework, which can offer procedural advantages in certain contexts. Our tax disputes practice in Kazakhstan advises on both the administrative and judicial stages, and on the strategic choices involved in deciding how and when to escalate.
How Ferraz & Whitmore Works on Kazakhstan Tax Mandates
Our approach combines international structuring expertise with on-the-ground knowledge of the Kazakhstani legal and regulatory environment. On each matter we work to understand the client's commercial objectives first, then map the available legal instruments, assess the risks of each approach against current rules, and provide a clear recommendation with documented reasoning.
Typical work product includes a written tax structuring memorandum covering the proposed structure, alternatives considered and the risk profile of each option; transfer pricing documentation prepared in line with applicable standards; due diligence reports for transaction purposes; and written opinions supporting treaty or regime positions. Where a cross-border structure involves EU entities, we coordinate the analysis across both legal systems to avoid gaps or inconsistencies.
Self-Assessment Checklist for International Businesses in Kazakhstan
The questions below are intended to help management identify whether a formal tax structuring review is warranted. They are not exhaustive, and they do not constitute legal advice.
- Has the group's Kazakhstani structure been reviewed against the new Tax Code in force since 1 January 2026?
- Is there clear, contemporaneous documentation supporting the transfer pricing of intercompany transactions involving Kazakhstani entities?
- Does the holding entity through which Kazakhstani assets are held meet the substance requirements necessary to support treaty or regime access?
- If the group includes EU entities, has the structure been tested against the ATAD interest limitation, CFC and anti-abuse rules?
- Have any cross-border arrangements been assessed for mandatory disclosure obligations under DAC6 or equivalent national rules?
- Is there a documented process for identifying and escalating new tax risks as the business or the applicable law changes?
- Has the group considered the tax consequences of a future exit, reorganisation or redomiciliation while there is still time to plan?
Cross-Border Dimension: Working Across Multiple Legal Systems
Kazakhstan sits at the intersection of several overlapping legal and treaty frameworks. A group with Kazakhstani operations and European or other international shareholders must navigate Kazakhstani domestic law, the applicable double tax treaties, the EU anti-avoidance framework where relevant, and increasingly the international standards developed by the OECD on base erosion and profit shifting. No single element can be addressed in isolation.
The practical consequence is that tax structuring advice on Kazakhstan-related matters should always consider the full holding chain, not just the Kazakhstani layer. A structure that is technically efficient at the Kazakhstani level may create unintended costs or risks higher up in the group, and vice versa. This integrated perspective is central to the way we approach every mandate.
To discuss a specific structuring question, a pending transaction or an active tax risk in Kazakhstan, please reach out to our team at info@ferrazwhitmore.com or through our contacts page. We are available to provide an initial assessment of your situation without commitment.
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.