Kazakhstan tax code cuts IP registrations by 219,000 in seven months

September 9, 2026 at 01:35 PM2 min

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Kazakhstan's new Tax Code, effective January 1, 2026, has made it economically disadvantageous for legal entities to work with individual entrepreneurs on the simplified tax regime. The Chamber of Tax Consultants reported that IP registrations fell by 219,000, or 11.7%, in the first seven months of 2026. The construction sector is particularly affected, with potential impacts on housing costs.

Key Facts

From January 1, 2026, expenses of legal entities on the generally established regime for transactions with individual entrepreneurs and LLPs on the simplified declaration are not deductible for corporate income tax.
In the first seven months of 2026, the number of registered individual entrepreneurs in Kazakhstan decreased by 219,000, or 11.7%, and the number of active ones by 203,000, or 11.3%.
The Chamber of Tax Consultants and the Union of Builders of Kazakhstan propose creating a generally established regime for individual entrepreneurs based on simplified tax accounting, initially in a pilot format.
Andrey Khorunzhiy, Chairman of the Board of the Chamber of Tax Consultants, stated that a generally established tax regime can be more profitable for entrepreneurs, with a 10% margin resulting in a 1% tax rate.

Tax Code Impact

The new Tax Code, effective January 1, 2026, has created a situation where legal entities find it economically disadvantageous to work with individual entrepreneurs using the simplified tax regime. Andrey Khorunzhiy, Chairman of the Board of the Chamber of Tax Consultants, explained at a press conference in Astana that when a legal entity pays, for example, 2% tax on turnover, it additionally loses 20% in corporate income tax because expenses on such entrepreneurs are not deductible. The problem is particularly sensitive for the construction industry, where a significant part of work is performed through subcontractors, small companies, and specialized teams. As a result, tax conditions may affect not only the position of small businesses but also the final cost of construction projects, including housing.

Registration Decline

Over seven months of 2026, the number of registered individual entrepreneur entities decreased by 219,000, or 11.7%, and the number of active ones by 203,000, or 11.3%. The Chamber of Tax Consultants, together with the Union of Builders of Kazakhstan, proposes to create a generally established regime for individual entrepreneurs based on simplified tax accounting, initially in a pilot format. Khorunzhiy noted that the generally established tax regime can be quite profitable for individual entrepreneurs, as with a 10% margin the tax amount becomes 1%, which is even lower than the minimum rate for the simplified tax regime. He identified the complexity of calculating corporate income tax and the need to maintain accounting records as the main obstacles for individual entrepreneurs transitioning to the generally established regime.