Kazakhstan Tightens Tax Rules: Risks for Businesses Splitting Operations

Tax Authorities in Kazakhstan Crack Down on Business Splitting Schemes Kazakhstan's tax authorities are intensifying their scrutiny of businesses structured into multiple entities to avoid higher taxes. A recent video by an accountant, Gulnaz Teleuova, highlights the risks involved in this practice. Teleuova warns that sharing resources, personnel, and clients between entities, such as a TOO and an IP, will be considered a single business operation. This means businesses will be liable for taxes as a single entity, incurring higher tax bills and potential penalties. "The tax authority is no longer looking at the form," Teleuova explains in her video. "They're looking at the essence. If everything operates as one business, you'll pay as one and to the fullest extent." Teleuova's insights are particularly relevant given the increased focus on tax compliance in Kazakhstan. The video emphasizes the importance of maintaining transparent accounting practices and paying all applicable taxes to avoid potential legal repercussions. The video also mentions a 'golden list' of businesses under increased scrutiny, indicating a proactive approach by the tax authorities. This crackdown underscores the need for businesses to ensure their tax structures align with their operational realities. The increased vigilance of tax authorities serves as a reminder for businesses in Kazakhstan to prioritize transparent accounting and compliance with tax regulations. By adhering to these principles, businesses can ensure stability and avoid the significant financial and legal consequences of non-compliance.