Investment tax credit Printable versionLast update: 06.04.2023
An investment tax credit is a change in the term of payment of taxes for upcoming periods under an investment contract which allows a taxpayer completely reducing corporate tax and property tax payments by 100 percent and transferring to a phased payment lasting no more than three years.
How is an investment tax credit useful for entrepreneurs
An investment tax credit allows reducing tax payments by 100%,transferring to a phased payment and receiving a payment deferment for up to 3 years.
An investment tax credit can be granted for corporate income tax (hereinafter: CIT) and (or) property tax. It is possible to use a credit for two types of taxes simultaneously. This will enable entrepreneurs to direct the amounts saved on CIT (20% of net profit) to business development.
Who can apply for a credit and how to get it
An investment tax credit is provided to taxpayers under an investment tax credit agreement.
Taxpayers who meet one of the following conditions are not eligible for application of an investment tax credit:
- applying special tax regimes provided for by Section 20 of the Tax Code;
- engaged in production and (or) sale of all types of alcohol, alcoholic beverages, tobacco products;
- operating on the territory of a special economic zone or a subsurface user observing respective taxation regimes in accordance with Clauses 21 and 23 of the Tax Code.
Thus, the decision to grant an investment tax credit is made based on a taxpayer's application and formalized by an agreement in the prescribed form between an applicant and the Investment Committee.
The procedure for concluding an investment tax credit agreement is determined by the Rules for concluding an investment tax credit agreement approved by the Order No. 11-1-4/106 of the Minister of Foreign Affairs of the Republic of Kazakhstan as of March 26, 2021.
Thus, the three-year period during which it is possible not to pay CIT and property tax should be used to stabilize financial situation and develop the organization at the expense of the released funds.