Taxation of peasant and farm enterprises Printable versionLast update: 14.09.2021
Special tax regime for peasant and farm enterprises
Pursuant to Article 702 of the Tax Code, a special tax regime for peasant and farm enterprises (hereinafter: STR for PFE) can be applied by peasant and farm enterprises that are not the payers of value-added tax and if they have land plots on the territory of the Republic of Kazakhstan owned based on the private ownership and/or land use right (including the right of secondary land use).
In order to apply STR for PFE, the total area of agricultural land plots owned on the private ownership and (or) land use right (including the right of secondary land use) should not exceed the size of the maximum area of a land plot established for:
- 1st target area: 5 000 ha;
- 2nd target area: 3 500 ha;
- 3rd target area: 1 500 ha;
- 4th target area: 500 ha.
The STR for PFE involves a special procedure for making payments to the budget based on the payment of a single land tax and applies to such activities of peasant and farm enterprises as production of agricultural products and sale of products, processing of agricultural products of own production, sale of products of such processing, excluding production, processing and sale of excisable goods.
Pursuant to Article 703 of the Tax Code, a taxation object for a taxpayer applying STR for PFE is income received during the tax period from sale of agricultural products, processing of agricultural products of own production, excluding production, processing and sale of excisable goods.
Calculation of a single land tax is performed by a taxpayer by applying a rate of 0.5 percent to a taxation object for the reporting tax period.
Payment for a single land tax and payment for the use of surface sources` water resources is made in the following order:
1) sums calculated from January 1st to October 1st of the tax period are to be paid no later than November 10th of a current tax period;
2) sums calculated from October 1st to December 31st of the tax period are to be paid no later than April 10th of the tax period following a reporting tax period.
Payment of a single land tax is to be made to the budget at a place of a land plot location.
The following sums are indicated in the declaration for payers of a single land tax in the 920.00 form:
- single land tax,
- personal income tax withheld at a source of payment,
- payment for utilization of surface sources` water resources,
- social payment.
A declaration for payers of a single land tax is submitted to the tax authorities at the location of a land plot no later than March 31st of the tax period following the reporting tax period.
Payers of the single land tax are not payers of the following types of taxes and payments to the budget:
- IIT from income obtained for the activities of peasant and farm enterprise, including income in the form of sums received from the state budget to cover costs (expenses) associated with activities covered by STR;
- Land tax and (or) payment for the use of land plots for land plots used in activities covered by STR, excluding land plots used in violation of the legislation of the Republic of Kazakhstan;
- Tax for vehicles for taxation objects indicated in subclauses 1) and 2) of Clause 3 of Article 490 of the Tax Code;
- Tax for property for taxation objects indicated in subclauses 1) of Clause 3 of Article 517 of the Tax Code;
- Social tax for peasant and farm enterprise covered by STR;
- Payments for emissions into the environment for the activities of peasant and farm enterprise covered by STR.
How to report to the budget if two tax regimes are applied
If a peasant or farm enterprise decided to apply two tax regimes simultaneously for various areas of activities, then it needs to:
- ensure separate accounting of income from activities that fall under STR and from other activities;
- submit reports for each tax regime on time.
For example, if a farm decides to apply a simplified tax system for other activities, then it will be necessary to submit tax reporting form 910.00 within the time limits established by the Tax Code.
Thus, in a declaration in the 910.00. form one should indicate income, calculations and rates established for a simplified declaration, while in the second declaration in the 920.00 form it should be turnover and taxes related to the major activity.
At the same time, based on the above example, social payments for a head of household and its members are also indicated in the tax reporting form 920.00, in the case of hiring employees for other types of activities, social payments for employees are indicated in the simplified declaration in the form 910.00.