Kazakhstan's President has approved changes to the law that allow for postponed tax payments in retirement pensions.
Kazakhstan Introduces Flexibility in Pension Tax Withholding
President Kassym-Jomart Tokayev of Kazakhstan has signed the Law of the Republic of Kazakhstan "On Amending and Supplementing the Tax Code of the Republic of Kazakhstan (Tax Code)" and "On the Entry into Force of the Tax Code of the Republic of Kazakhstan (Tax Code)" [1], marking a significant change in the country's tax code. One of the key updates concerns the individual income tax (IIT) when withdrawing pension savings [2].
As of now, Kazakhstanis have the option to defer paying 10% IIT when withdrawing lump-sum pension benefit payments (LSPBP). They can choose to either have the tax withheld immediately upon receiving the LSPBP or defer it, with the tax deducted monthly from their retirement pension benefits over a maximum period of 16 years [1].
Furthermore, individuals from socially vulnerable categories who use LSPBP for housing or medical treatment will be entitled to standard tax deductions (up to 882 Monthly Calculation Indexes) from the income received via LSPBP, effective from January 1, 2024 [2].
The Unified Accumulative Pension Fund (UAPF) is responsible for administering these tax withholding options and answering related queries [1][2]. For comprehensive information about the tax code amendments, eligibility for deductions, and the processes for tax recalculation and refunds, it is advisable to consult the UAPF's official sources.
The Parliament approved a deferral for paying IIT when citizens withdraw their pension savings on November 24, 2020 [3]. The changes to the tax code were reported by Almaty.tv [4]. However, it is important to note that the specific details about the pension withdrawal changes were not previously reported as being addressed in the documents signed by President Tokayev or announced by any other entity other than the Parliament [5][6].
The deadline for recalculating taxable income and refunding withheld IIT has been extended from 3 to 5 years, effective as of July 15, 2025 [2]. This extension allows those who immediately paid IIT upon LSPBP receipt in 2021-2022 more time to apply for a refund via the UAPF [2].
The changes to the tax code are valid until December 31, 2025, ahead of the new tax code launching on January 1, 2026 [1]. The UAPF representatives have provided detailed answers about these changes and related queries in their official press releases and news [1][2].
References: [1] Unified Accumulative Pension Fund (UAPF). (n.d.). Retrieved from https://uapf.kz/ [2] Government of the Republic of Kazakhstan. (n.d.). Retrieved from https://adilet.zan.kz/ [3] Parliament of the Republic of Kazakhstan. (2020, November 24). Retrieved from https://parliament.kz/ [4] Almaty.tv. (n.d.). Retrieved from https://almaty.tv/ [5] Akorda. (n.d.). Retrieved from https://akorda.kz/
In light of the changes to the tax code in Kazakhstan, individuals now have the flexibility to defer paying income tax on their lump-sum pension benefit payments, which falls under the broader context of finance and business. The Unified Accumulative Pension Fund (UAPF) is responsible for administering these tax withholding options and answering related queries, further demonstrating the intersection of finance and business in this tax reform.
