Special patent based tax regime Printable versionLast update: 05.12.2022
Which individual entrepreneur can work under a patent
The main condition for application of the special regime "Patent-based individual entrepreneurship" is carrying out of sole entrepreneurship, i.e. absence of employees. Other conditions for the patent application and existing restrictions are fixed in Article 683 of the Tax Code of the Republic of Kazakhstan.
Thus, there are the following limitations:
- by amount of income (up to 3,528 MCI per year or KZT 10.806.264 for 2022);
- by type of activity (subject to the requirements of subclause 3, clause 2 of Article 683 of the Tax Code of the Republic of Kazakhstan and other restrictions).
If an annual income exceeds the established threshold, an individual entrepreneur loses the right to apply the patent and should switch either to another special tax regime, to simplified regime or to standard regime.
Individual entrepreneurs who carry out the following types of activities can work under the patent (there are 32 of them in total):
- plastering works;
- woodworking and carpentry;
- floor and wall covering;
- painting and glazing works;
- taxi activity;
- cargo transportation by road;
- real estate management for remuneration or on a contractual basis;
- activities in the field of photography;
- translation (oral and written) activities;
- property leasing;
- vehicle lease;
- entertainment and sports equipment lease;
- rent of videos and discs;
- rent of other personal consumption articles and household goods;
- lease of agricultural machinery and equipment;
- lease of office machines and equipment, including computer equipment;
- services in the field of sports education and education of leisure professionals;
- education services in the field of culture;
- other education services;
- auxiliary educational services;
- activities in the field of art;
- repair of computers and peripheral equipment;
- repair of communication equipment;
- repair of personal items and household goods;
- hairdressing services;
- manicure and pedicure;
- veterinary services;
- land cultivation services;
- residential cleaning and housekeeping services;
- porter services at markets, train stations;
- production and repair of musical instruments;
- cattle grazing.
It is forbidden to engage in trade under the patent. In case of conditions that do not allow applying a special patent-based tax regime, a taxpayer should submit a notification on applicable tax regime within five working days from the date of occurrence of such conditions in order to switch to a standard taxation or other special tax regime.
Entrepreneurs applying a special patent-based tax regime should use cash registers, except for taxpayers whose activities are carried out in places with no public telecommunications network, as well as except for taxpayers who make cash payments through a special mobile application.
Individual entrepreneurs who deliver services based on agency agreements (contracts) are not entitled to apply a special patent-based tax regime.
How to get a patent and what is its validity term?
To get a patent, an entrepreneur should first register as an individual entrepreneur.
In order to apply a special patent-based tax regime, a calculation of patent value is submitted to a relevant tax agency.
The calculation is submitted in paper or online as well as via e-Gov portal, by following categories of individual entrepreneurs:
- Newly formed. No later than 3 working days from the date of notification submission for registration as an individual entrepreneur.
- Those who transfer from standard procedure or other special tax regime. Until the 1st day of the month of application of special patent-based tax regime.
- Obtainment of subsequent patent. Until expiration of a previous patent or period of tax reporting suspension.
The calculation is a tax report for calculating the value of a patent.
The amount of income that is planned to be received during the period of patent validity is determined by a taxpayer.
Payment of patent value is made by a taxpayer prior to submission of calculation.
Upon payment of patent value through second-tier banks or organizations engaged in certain types of banking operations, a notification from e-Government Payment Gateway is attached to a calculation submitted online, which is generated on the e-Government portal when a payment document details are specified in a request.
Along with calculation, documents confirming the payment of patent cost are submitted in paper.
In calculations submitted online, including through the e-Gov portal, individual entrepreneurs indicate payment document details for payment of taxes and social payments included in a patent cost. A patent cost includes the amount of individual income tax (except for individual income tax withheld at a source of payment) and social payments. Calculation of the amount of individual income tax included in a patent cost is carried out by applying a rate of 1 percent to a taxation object.
NOTE: Pursuant to the Law of the Republic of Kazakhstan No. 290-VI as of December 27, 2019 (hereinafter: Law), from January 01,2020 to January 01, 2023, amount of personal income tax for micro and small businesses is reduced by 100% in accordance with the conditions of Article 57-4 of the Law.
I.e., there is no need to pay a personal income tax during the period (a patent cost is equal to amount of social payments). Thus, when submitting 911.00 form for 2021, amount of planned income is indicated in a calculation, while personal income tax amount is KZT 0 tenge.
Calculation of social payments included in a patent cost is made in accordance with the following laws of the Republic of Kazakhstan:
- On provision of pensions in the Republic of Kazakhstan,
- On compulsory social insurance,
- About compulsory social health insurance.
After an individual entrepreneur submits a calculation, a tax authority generates a patent in the departmental information system within 1 working day following the date of calculation submission.
The tax period for patent application is a calendar year.
A special patent-based tax regime is applied for at least one month within one tax period, unless otherwise provided for in Clause 5 of Article 685 of the Tax Code.
A special patent-based tax regime is applied for a period of less than one month by individual entrepreneurs:
- newly registered in the last month of a current tax period;
- those who have resumed their activities before or after the end of suspension of tax reports submission in the last month of a current tax period.
- If an entrepreneur plans to continue activities after patent expiration, then it is necessary to purchase the next patent prior to expiration of a previous one.
- If an individual entrepreneur plans to change a tax regime, then a notification about a change should be submitted one month prior to transfer. Otherwise, a notification will be issued and an individual entrepreneur will be transferred to standard taxation procedure.
- If it is planned to suspend activities, an application for suspension should also be submitted before the end date of a current patent.
- If an individual entrepreneur income exceeds an amount specified in income calculation, an individual entrepreneur is obliged to provide an additional calculation for the difference and pay additional taxes.
- If income exceeds the established limit, an individual entrepreneur should provide a notification on transfer to another tax regime, due to inconsistency with the conditions of application of a special patent-based tax regime from the 1st day of the month in which such an excess occurred.
If a tax application or calculation is not submitted within sixty calendar days from the date of patent expiry, an individual entrepreneur shall be removed from the register as an individual entrepreneur in accordance with the procedure established by Article 67 of the Tax Code.