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Limitation on CIT deductions for non-residents from 2023

New Limitations on Expenditures for Purchases of Intangible Services from Nonresident Affiliates effective 2023.

Additions to Article 264 of the Tax Code, paragraph 23 and Article 288 of the Tax Code, paragraph 3-2

What types of expenses fall under the restrictions:

- Consulting, auditing services;

- design, legal, accounting services;

- advocacy, advertising, marketing services;

- Franchising, financial (other than remuneration), engineering, agency services, royalties, transfer of rights to use intellectual property).

The updates apply only to non-resident affiliates - parent, subsidiaries, related parties.

The interrelated parties are:

1 Persons specified in Article 1, paragraph 2, of the Tax Code

2. Individuals and legal entities between which there is a sign of interconnectedness

3. Group of companies as a structure of commercial and non-commercial

organizations, including the parent company and companies, shares, participatory interests and other equity instruments.

If such expenses have occurred, Article 288 says that the taxpayer is entitled to a reduction of taxable income by the above expenses in an aggregate amount not exceeding 3 percent of taxable income.

If you still have questions on the CIT Deduction Limitation for Non-Residents, you can ask an Egsat.kz expert during a free consultation. Leave a request and we will contact you as soon as possible.

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