Controlled Foreign Company Rules in Kazakhstan: What Kazakhstan Residents Face in 2026

Controlled foreign company rules are addressed not to the foreign company but to its Kazakhstan owner. The mechanism is that, where defined conditions are met, the profit of a foreign company is included in the taxable income of a Kazakhstan resident and taxed in Kazakhstan — even where no dividend has been distributed and the money has stayed abroad. The regime sits in Chapter 33 of the Tax Code of the Republic of Kazakhstan (Law No. 214-VIII of 18 July 2025), in force from 1 January 2026.

Chapter 33, "Taxation of the profit of a controlled foreign company", comprises five articles: Article 332 on key concepts, Article 333 on general provisions, Article 334 on exemption from taxation, Article 335 on the taxation of CFC profit, and Article 336 on the statement of participation (control) in a controlled foreign company. Under the former Tax Code of 25 December 2017 the same block sat in Chapter 30, Articles 294 to 298.

On the levels of verification in this article — read this before acting on anything below. The structure of Chapter 33 and the numbering of Articles 332 to 336, together with the separate block for individuals in Articles 398 and 399, are confirmed by the Tax Code table of contents on the Adilet portal and in the legal databases. The 195 MCI filter and its keying to aggregate income follow a professional review of the corporate income tax changes; the scale of the reduction from the former 150,495 MCI is large enough that the figure should be verified separately.

What follows sets out who falls within the regime and on what conditions, how the ownership threshold is computed, how the jurisdictional test differs from the treaty exclusion, what the new 195 MCI filter does, and why the choice between the UAE and Hong Kong looks different under the CFC rules than it does under the preferential-tax list.

1. The Legal Framework

•     The Tax Code of the Republic of Kazakhstan — Law No. 214-VIII of 18 July 2025, in force from 1 January 2026. Chapter 33 governs the taxation of controlled foreign company profit.

•     The former Tax Code of 25 December 2017 No. 120-VI ceased to apply on 1 January 2026. The CFC rules sat in Chapter 30, Articles 294 to 298; the current Chapter 33 reproduces the same architecture with the numbering shifted by four.

•     Paragraph 7, "Profit of a controlled foreign company", on the personal income tax side. Beyond Chapter 33 the current Code carries a separate block for individuals: Article 398 on general CFC provisions and Article 399 on the taxation of CFC profit. Under the former Code the same block sat in Articles 339 and 340. For a resident individual, reading Chapter 33 alone is not enough.

•     Order No. 492 of the Minister of Finance of 12 September 2025 approving the list of states with preferential taxation, in force from 1 January 2026. The list operates within the CFC rules as an independent ground of qualification.

•     Double tax conventions. The existence of a convention with the state of incorporation forms part of the qualification test but does not by itself take a company outside the regime.

Kazakhstan introduced CFC rules as part of implementing the OECD BEPS measures, with effect from 1 January 2018. The regime is not new: what has changed is not its architecture but the intensity of administration and the availability of data on foreign assets through the automatic exchange of financial account information.

2. The Three-Limb Test: All Three Must Be Met

A foreign company qualifies as controlled for a Kazakhstan resident only where three groups of conditions are met simultaneously. Failing any one of them takes the company outside the regime.

Limb of the test	Substance	What to check
1. Status of the person	A non-resident legal entity or another foreign form of business organisation without legal personality. Excluded are entities established in a state with which Kazakhstan has a tax treaty in force, provided the nominal profit tax rate in that state exceeds 75 per cent of the Kazakhstan corporate income tax rate	Whether a treaty is in force and the nominal profit tax rate in the state of incorporation
2. Ownership or control	25 per cent or more of the participation interest or voting shares belongs directly, indirectly or constructively to a Kazakhstan resident; or the person is connected to the resident through control — direct, indirect or constructive	The ownership chain up to the ultimate resident, and whether control exists within the meaning of IFRS
3. Jurisdictional test	The effective profit tax rate of that person is below 10 per cent; or the person is registered in a state on the list of states with preferential taxation	A computation of the effective rate from the financial statements, or a check of the state against the list under Order No. 492

"Constructively" means the aggregate of direct and indirect ownership. A resident holding 10 per cent directly and 20 per cent through an intermediate structure therefore reaches 30 per cent and crosses the threshold, even though neither holding on its own reaches 25 per cent.

Control is a standalone ground requiring no holding at all. The second limb is framed with an "or": either the 25 per cent threshold or a connection through control suffices. Control is determined under IFRS, that is through the ability to direct the relevant activities and to obtain variable returns. A resident holding no shares at all but able to determine the decisions of a foreign company falls within the regime on the same footing as a controlling shareholder.

3. The Jurisdictional Test: Effective Rate Versus the List

The third limb has two alternative grounds, and they differ sharply in how much work they require.

•     An effective rate below 10 per cent. This requires computation: the profit tax actually paid or payable is set against the financial profit shown in the accounts. The rate is computed under rules set by the chapter itself, not by reference to the nominal rate in the foreign statute.

•     Registration in a state on the list. This requires no computation at all: the presence of the state on the list approved by the Minister of Finance closes the third limb on its own.

The distinction between the nominal and the effective rate is fundamental here. The nominal rate is used in the treaty exclusion — the first limb. The effective rate is used in the jurisdictional test — the third limb. These are two different measures in two different places within the same rule, and conflating them is the most common error in self-assessment.

How the treaty threshold is computed

The first-limb exclusion is pegged not to an absolute figure but to a proportion of the Kazakhstan rate: the nominal profit tax rate in the state of incorporation must exceed 75 per cent of the Kazakhstan corporate income tax rate.

The general Kazakhstan corporate income tax rate for 2026 is 20 per cent. On that figure the 75 per cent threshold yields 15 per cent: a state with a treaty in force and a nominal rate above 15 per cent takes the company outside the CFC definition at the first limb, while a state at or below 15 per cent does not, treaty notwithstanding.

The 2026 differentiated CIT rates raise a question worth keeping in view. Alongside the general 20 per cent rate the new Code introduced differentiated rates — 25 per cent for banks and gaming, 5 per cent in 2026 and 10 per cent from 2027 for social-sector organisations, and 3 per cent for agricultural producers. Which rate the 75 per cent is measured against does not follow unambiguously from the available material. The practical approach: work from the general 20 per cent rate and verify the conclusion against the text of Article 332 before deciding.

How the effective rate is computed in practice

The effective rate is not the figure written in the foreign tax statute but a computed one. In broad terms it comes from setting the actual profit tax burden against the financial profit of the same period as shown in the company’s accounts.

•     Only profit tax of the foreign entity counts: indirect taxes, payroll taxes and levies are excluded.

•     The denominator is financial profit as determined under the rules of the chapter, not the tax base under foreign law.

•     The result is compared with the 10 per cent threshold; below it, the third limb closes.

Why a company with a normal headline rate may still fail the test. The effective rate diverges from the nominal one whenever foreign law grants exemptions, deductions, preferential regimes or reduced rates on part of the income. A company in a jurisdiction with a 20 per cent nominal rate but a substantial share of exempt income can show an effective rate below 10 per cent. The reverse also occurs: one-off assessments for prior years can lift the effective rate above the threshold in a given period. The test is therefore run for each tax period separately, not once at the time the structure is built.

The documentary consequence: computing an effective rate requires the controlled foreign company’s financial statements for the period and evidence of the tax actually paid. The absence of accounts does not relieve the resident of the obligations — it removes the ability to demonstrate that the test is not met.

4. How the Effective Rate Is Computed

The effective rate is the ratio of profit tax actually paid or payable to the financial profit of the foreign company — not the rate stated in the foreign tax statute. That is why a company in a jurisdiction with a respectable headline rate can end up below the 10 per cent threshold, while a company in a low-tax jurisdiction can end up above it.

A worked example: why the headline rate does not answer the question

Take a UAE company with taxable income of AED 1,000,000 for a tax period. Corporate tax runs on a stepped scale: 0 per cent on the first AED 375,000 and 9 per cent on the balance. The tax is 9 per cent of AED 625,000, that is AED 56,250. Setting AED 56,250 against AED 1,000,000 gives an effective rate of 5.6 per cent — materially below the 9 per cent headline rate and below the 10 per cent threshold.

The stepped scale by itself pulls the effective rate below the headline rate, and the smaller the taxable income the wider the gap. At AED 500,000 of income the effective rate is roughly 2.3 per cent; at AED 5,000,000, roughly 8.3 per cent. Even at AED 10,000,000 the effective rate stays below 9 per cent and therefore below the 10 per cent threshold.

That yields a conclusion which resets expectations of a UAE structure. For a UAE company without Qualifying Free Zone Person status, the effective rate cannot mathematically reach 10 per cent at any level of income: the marginal rate is 9 per cent and the zero band up to AED 375,000 drags the weighted average down. A QFZP company with a zero rate on qualifying income sits further from the threshold still. For a UAE company the third limb of the test will ordinarily be met.

The computation runs off the foreign company’s financial statements, so their existence is a precondition of the analysis at all. A company that prepares no accounts deprives its Kazakhstan owner of any means of showing that the effective rate exceeds the threshold — and all but guarantees that the regime applies.

5. The New Quantitative Filter: 195 MCI

The new Tax Code contains a quantitative filter keyed to aggregate income rather than to profit: where the aggregate income of each controlled foreign company or of its permanent establishment is below 195 times the monthly calculation index in force on the first day of the tax period, that company or permanent establishment, if not registered in a state with preferential taxation, is not treated as a controlled foreign company.

The threshold has been cut so sharply that it warrants separate verification before use. Under the former Tax Code the equivalent filter in Article 294 was keyed to aggregate income below 150,495 times the MCI — roughly KZT 650 million on the 2026 index. The professional review of the changes describes the new figure as 195 times the MCI and expressly calls it a reduction. The difference is more than seven-hundredfold, and at that level the filter ceases to be relief for any operating company: KZT 843,000 of aggregate income is a threshold below which essentially only a dormant structure sits. The figure is confirmed by a professional source but not by the text of Article 332 as read, and the scale of the change is itself a reason to verify it directly.

Parameter	Value	Note
Monthly calculation index for 2026	KZT 4,325	Set by the republican budget law and revised annually
Threshold under the former Code (Article 294)	150,495 times the MCI of aggregate income	Roughly KZT 650 million on the 2026 index
The 195 MCI threshold in tenge for 2026	approximately KZT 843,375	A derived figure: 195 × 4,325. The MCI is taken as at the first day of the tax period
What it applies to	The aggregate income of each CFC and of each CFC permanent establishment	Below the threshold, CFC status does not arise
When the filter does not operate	The company is registered in a state with preferential taxation	For such companies the threshold is unavailable: status arises regardless of the size of the profit

The filter screens out small structures, not offshore ones. The rule is built so that relief by size of income is available only to companies outside the list of states with preferential taxation. A company in a listed jurisdiction remains a controlled foreign company even on nil or nominal turnover — with all the attendant statement and reporting obligations.

6. The CFC Permanent Establishment: a Separate Construct

The regime reaches not only foreign companies but their establishments. A branch, representative office or other form of permanent establishment of a foreign company owned by a resident directly, indirectly or constructively to 25 per cent or more qualifies as the permanent establishment of a controlled foreign company where it is registered in a state with preferential taxation, or where its effective profit tax rate is below 10 per cent.

The practical consequence: a structure running "Kazakhstan resident to foreign company in a normal jurisdiction to branch in an offshore" does not take the branch outside the regime. The test applies to the permanent establishment separately from the parent company.

7. Exemptions

Article 334 of the current Code deals with exemption from taxation of CFC profit. On the settled practice under the equivalent provision of the former Code, that block covers the following grounds.

•     A loss-making controlled foreign company: where there is no financial profit, no obligation arises for the resident.

•     Indirect participation or indirect control exercised through a person that is not itself a controlled person.

•     Grounds connected with tax already paid abroad and with the elimination of double taxation.

The list of exemption grounds must be verified. The grounds above are drawn from practice under the former Chapter 30 and from practitioner commentary. The composition of Article 334 as in force may differ, and it is precisely this block that determines whether an obligation arises at all. Verify it against the text of Article 334 rather than against any review, this one included.

8. How CFC Profit Is Taxed

The mechanism: the financial profit of a controlled foreign company attributable to the resident’s share is included in the resident’s taxable income in Kazakhstan. For a legal entity that means corporate income tax; for an individual, personal income tax.

The defining feature is that tax arises irrespective of distribution. Profit left on the foreign company’s balance sheet and never paid out as a dividend is still included in the resident’s income for the relevant tax period. That is what separates the CFC rules from ordinary dividend taxation, where the trigger is payment.

At what rates the includible profit is taxed

The rate depends on the status of the Kazakhstan controlling person, not on the characteristics of the foreign company.

•     A Kazakhstan resident legal entity. The includible share of financial profit increases taxable income and is charged to corporate income tax at the general 20 per cent rate, or at the applicable differentiated rate.

•     A Kazakhstan resident individual. The includible share is charged to personal income tax, and the rules for individuals sit in Articles 398 and 399, not in Chapter 33 alone. From 1 January 2026 a progressive PIT scale applies: the 15 per cent rate applies to annual income above 8,500 MCI, with 10 per cent below that.

The rate differential means the choice between holding a foreign company personally and holding it through a Kazakhstan legal entity has tax consequences before any distribution occurs. That should be modelled at the structuring stage, not after the first tax period.

What reduces the charge

•     Profit tax actually paid by the controlled foreign company abroad — the double taxation relief mechanism.

•     Amounts previously taxed on the resident under the CFC rules, when the profit is later distributed as a dividend — to avoid taxing the same profit twice.

The computation of financial profit, the applicable adjustments and the foreign tax credit mechanism sit in Article 335 of the current Code. The formulas and credit limitations should be taken from its text: this is the block that changes most often between versions.

Individuals and legal entities: one mechanism, different taxes

The CFC regime addresses Kazakhstan-resident legal entities and individuals alike, but the tax consequence is framed differently.

•     A resident legal entity. The share of CFC financial profit attributable to it is included in taxable income and charged to corporate income tax at the general 20 per cent rate, unless one of the differentiated rates applies to the resident itself.

•     A resident individual. The attributable share of financial profit is included in income subject to personal income tax and is declared by the individual, not through a withholding agent.

For an individual the CFC obligation converges with the general duty to declare foreign assets and income. The same foreign company therefore appears in several reporting forms at once, and any discrepancy between them is itself a trigger for questions from the tax authority.

9. The Statement of Participation or Control

Article 336 of the current Code imposes a duty on a resident to file a statement of participation (control) in a controlled foreign company. This is a standalone obligation and does not track the payment of tax: it arises from the fact of participation or control, not from the arising of taxable profit.

The duty to file exists even where no tax is due. A loss-making controlled foreign company creates no tax liability but does not remove the duty to declare the holding. The same applies to a company covered by one of the Article 334 exemptions. The filing deadline and the form are set by Article 336 and subsidiary instruments and must be verified: the available material also carries deadlines belonging to other jurisdictions, which are easily mistaken for Kazakhstan ones.

A separate administrative mechanism is the tax authority’s notice concerning participation in a foreign company. A resident is treated as holding participation interests and exercising control where it has neither appealed against the acts of the officials who issued the notice nor complied with it, or where its explanations and supporting documents disclose no grounds rebutting the authority’s information. In short, silence in response to a notice operates against the resident.

10. CFC Rules and the Preferential List: Two Mechanisms That Get Confused

The list of states with preferential taxation operates within two different regimes of Kazakhstan tax law at once, and that generates persistent confusion.

•     The first mechanism — withholding tax and deductions. The presence of the recipient’s state on the list raises the withholding rate on dividends from a base 15 per cent to 20 per cent and restricts the Kazakhstan payer’s deduction. It operates at the level of the Kazakhstan company paying the income.

•     The second mechanism — the CFC rules. The presence of the state on the list closes the third limb of the qualification test, removes the need to compute an effective rate, and denies the company the 195 MCI filter. It operates at the level of the Kazakhstan owner of the foreign company.

A conclusion about one mechanism does not carry over to the other. A company may raise no withholding issue and still be a controlled foreign company for its Kazakhstan owner — and vice versa.

11. How the Regime Plays Out for Typical Jurisdictions

Second-leg jurisdiction	On the Kazakhstan preferential list?	How the CFC test runs
UAE	Absent from the list in force from 1 January 2026	The list does not close the third limb. The effective rate computation decides: corporate tax at 9 per cent above AED 375,000, a zero rate on QFZP qualifying income and a zero rate below the threshold make an effective rate under 10 per cent a likely rather than an exceptional outcome. The treaty in force with Kazakhstan does not close the first limb, because the 9 per cent nominal rate sits below the 15 per cent benchmark
Hong Kong	Present, within the entry for the People’s Republic of China covering the special administrative regions	The third limb closes automatically, no effective rate computation is needed, and the 195 MCI filter is unavailable
A treaty state with a nominal rate above 15 per cent	To be checked separately	The company falls outside the definition at the first limb — provided the state is not on the list
A listed state with no treaty	Present	Status arises once the ownership or control condition is met, regardless of the size of the profit and without any rate computation

The counter-intuitive conclusion for dual structures. On the preferential list the UAE looks better than Hong Kong: it is not listed, and withholding on dividends stays at the base rate. Under the CFC rules the advantage narrows: the low effective rate in the UAE will very often close the third limb, and the treaty does not close the first because the nominal rate is 9 per cent. Put plainly, the UAE solves the withholding problem but not the CFC problem.

12. What to Do When a CFC Surfaces Retrospectively

The most common practical situation is not an interpretive dispute but the discovery that a structure has been within the regime for several years, with no statements filed and no profit declared. The sequence of steps here has its own logic.

1.  Establish from which tax period all three limbs were in fact met: status of the person, the ownership threshold or control, and the jurisdictional ground. The date the company was formed and the date CFC status arose need not coincide.

2.  Obtain the controlled foreign company’s financial statements for every affected period: without them it is impossible to compute an effective rate, to determine financial profit, or to demonstrate that an exemption applies.

3.  Check period by period whether the 195 MCI filter operated and whether any exemption ground applied: for some periods there may be no obligation at all.

4.  Compute the resident’s attributable share of financial profit for the periods where an obligation arose, and apply credit for tax actually paid abroad.

5.  File the statements of participation or control and correct the tax reporting for the relevant periods.

The main mistake at this stage is to start with the tax computation. The starting point is identifying the periods in which the status arose at all. A structure may have entered the regime later than it was formed — after a change of jurisdiction, a change in the ownership chain, a new version of the preferential-tax list, or a change of rate. Computing tax for periods in which no status existed creates no smaller a problem than omitting it for periods in which it did.

13. Common Mistakes

Mistake 1. Assuming CFC status requires a controlling stake

The threshold is 25 per cent, not a majority, and it is computed constructively as the sum of direct and indirect holdings. Control, moreover, is a standalone ground requiring no holding at all. The cost: a minority holder with a quarter of a foreign company, and a partner with no formal holding but the ability to determine decisions, both fall within the regime and both owe a statement of participation.

Mistake 2. Conflating the nominal and the effective rate

The nominal rate belongs to the treaty exclusion in the first limb, on a threshold of 75 per cent of the Kazakhstan rate. The effective rate belongs to the jurisdictional test in the third limb, on a threshold of 10 per cent. The cost: the conclusion "the rate there is 9 per cent, so the treaty saves us" is wrong twice over — at that rate the treaty is precisely what does not save, and the effective rate still needs its own computation.

Mistake 3. Relying on the absence of a distribution

CFC tax arises on financial profit, not on payment. Profit left on the foreign company’s balance sheet is included in the resident’s income for the period. The cost: undeclared income accumulates over several years and typically surfaces at the first exchange of financial account information, or when the accumulated profit is finally distributed.

Mistake 4. Not filing where no tax is due

The duty to declare participation or control arises from participation, not from profit. A loss-making company and a company within an exemption do not remove it. The cost: breach of a standalone obligation unconnected to any tax amount, and the loss of any good-faith argument at a later audit.

Mistake 5. Ignoring a notice from the tax authority

The notice mechanism is built so that failing to appeal and failing to comply themselves become grounds to treat the resident as holding participation and exercising control. The cost: the status is established administratively, and it must then be challenged after the fact.

Mistake 6. Importing another jurisdiction’s CFC rules

In open sources the Kazakhstan CFC rules sit alongside the Russian ones, which run different thresholds, a fixed-profit tax, different notification deadlines and Article 25.13-1 of the Russian Tax Code. The cost: a computation done on the wrong rules and the wrong deadlines, which protects the taxpayer in neither jurisdiction.

14. Who Needs a Review, and How Deep

A review is essential

•     Kazakhstan residents holding 25 per cent or more in foreign companies. Including holdings that reach the threshold constructively from direct and indirect interests.

•     Anyone who in fact determines a foreign company’s decisions without a formal holding. Control under IFRS is a standalone ground.

•     Owners of structures with a UAE, Hong Kong or other low-tax leg. In the first case the effective rate computation decides; in the second, status arises automatically.

•     Anyone whose structure includes a branch or representative office of a foreign company. A CFC permanent establishment is tested separately from the parent.

When a simple check will do

•     A holding below 25 per cent, no control, and no indirect ownership through other structures.

•     A company established in a treaty state with a nominal profit tax rate above 15 per cent, where that state is not on the preferential list.

•     Aggregate income below 195 MCI, provided the company is not registered in a state with preferential taxation.

The signal to bring in an adviser: if answering "is this company my CFC" requires computing an effective rate from financial statements or unpicking an ownership chain through several legal entities, the situation has outgrown self-assessment.

15. Step-by-Step Self-Assessment

6.  List every foreign company and other form of organisation in which there is a direct or indirect interest or an ability to determine decisions.

7.  For each, compute the constructive holding — the sum of direct and indirect ownership — and compare it with the 25 per cent threshold.

8.  Separately assess whether control exists within the meaning of IFRS, even where the holding is below the threshold or absent.

9.  Check the state of incorporation against the list of states with preferential taxation under Order No. 492 of 12 September 2025.

10.     Where the state is not listed, check whether a treaty is in force and whether the nominal profit tax rate exceeds 75 per cent of the Kazakhstan corporate income tax rate.

11.     Where the treaty exclusion does not apply, compute the effective rate from the financial statements and compare it with the 10 per cent threshold.

12.     Apply the quantitative filter: compare the aggregate income with 195 times the MCI as at the first day of the tax period, remembering that the filter is unavailable to companies on the list.

13.     Test branches and representative offices of foreign companies separately as possible CFC permanent establishments.

14.     Check whether any exemption ground under Article 334 of the current Code applies.

15.     File the statement of participation or control under Article 336 regardless of whether a tax liability has arisen.

16.     Where a liability does arise, compute the includible share of financial profit and apply credit for tax paid abroad.

17.     Verify every parameter directly against the text of Articles 332 to 336 on adilet.zan.kz before filing.

16. Frequently Asked Questions

What holding makes a foreign company a CFC for a Kazakhstan resident?

25 per cent or more of the participation interest or voting shares held directly, indirectly or constructively by a Kazakhstan resident. Constructive ownership means the aggregate of direct and indirect holdings. A connection through control is a standalone ground on which no holding is required at all.

Does tax arise if the foreign company distributed no dividend?

Yes. The financial profit of the foreign company attributable to the resident’s share is included in the resident’s taxable income regardless of distribution. That is what distinguishes the CFC rules from ordinary dividend taxation, where the trigger is payment.

Does a double tax treaty prevent CFC status?

Only where the nominal profit tax rate in the state of incorporation exceeds 75 per cent of the Kazakhstan corporate income tax rate. On the general 20 per cent rate the benchmark is 15 per cent. A treaty state with a rate at or below that benchmark does not take the company outside the definition.

What does the 195 MCI threshold do?

Where aggregate income is below 195 times the monthly calculation index as at the first day of the tax period, the company or its permanent establishment is not treated as a controlled foreign company — provided it is not registered in a state with preferential taxation. On the 2026 MCI of KZT 4,325 the threshold is approximately KZT 843,375. The threshold is keyed to income rather than profit, and under the former Code it stood at 150,495 times the MCI.

Is a UAE company a controlled foreign company for a Kazakhstan resident?

Not automatically: the UAE is absent from the list of states with preferential taxation in force from 1 January 2026. Nor is there an automatic exemption: the treaty exclusion does not operate at a 9 per cent nominal rate, so the question turns on the effective rate computation, which at 9 per cent, with a zero rate up to AED 375,000 and the QFZP regime, may well fall below the 10 per cent threshold.

Is a Hong Kong company a CFC for a Kazakhstan resident?

Hong Kong sits on the list of states with preferential taxation within the entry for the People’s Republic of China covering the special administrative regions. Presence on the list closes the third limb without any effective rate computation and denies the company the 195 MCI filter.

Must a statement be filed for a loss-making company?

Yes. The duty to file a statement of participation or control under Article 336 arises from the fact of participation or control, not from the arising of taxable profit. A loss removes the tax liability but not the filing duty.

17. Key Takeaways

•     The CFC rules sit in Chapter 33 of the Kazakhstan Tax Code (Law No. 214-VIII), Articles 332 to 336; formerly Chapter 30, Articles 294 to 298.

•     The test has three limbs: status of the person, ownership or control, and the jurisdictional ground. All three must be met.

•     The ownership threshold is 25 per cent or more, direct, indirect or constructive; control under IFRS is a standalone ground with no holding requirement.

•     The jurisdictional test: an effective rate below 10 per cent, or presence on the list under MoF Order No. 492 of 12 September 2025.

•     The treaty exclusion operates where the nominal rate in the state of incorporation exceeds 75 per cent of the Kazakhstan CIT rate — a 15 per cent benchmark on a 20 per cent rate.

•     The new filter is keyed to aggregate income, not profit: income below 195 MCI removes CFC status, but not for companies on the preferential list. Under the former Code the threshold was 150,495 MCI.

•     Tax arises on profit, not on distribution: undistributed profit is included in the resident’s income.

•     The statement of participation or control is filed regardless of whether any tax liability exists.

•     A CFC permanent establishment is tested separately from the parent company.

•     The UAE solves the withholding problem but not the CFC problem; Hong Kong solves neither.

18. Summary 

Kazakhstan’s controlled foreign company rules sit in Chapter 33 of the Tax Code of the Republic of Kazakhstan (Law No. 214-VIII of 18 July 2025), in force from 1 January 2026: Article 332 on key concepts, Article 333 on general provisions, Article 334 on exemption from taxation, Article 335 on the taxation of CFC profit, and Article 336 on the statement of participation (control). Under the former Tax Code of 25 December 2017 the same block sat in Chapter 30, Articles 294 to 298. A foreign company qualifies as controlled where three conditions are met simultaneously: it is a non-resident legal entity or another foreign form of business organisation without legal personality, excluding entities established in a state with a tax treaty in force where the nominal profit tax rate exceeds 75 per cent of the Kazakhstan corporate income tax rate; 25 per cent or more of the participation interest or voting shares belongs to a Kazakhstan resident directly, indirectly or constructively, or the person is connected to the resident through direct, indirect or constructive control; and the effective profit tax rate of that person is below 10 per cent, or it is registered in a state on the list of states with preferential taxation approved by Order No. 492 of the Minister of Finance of 12 September 2025. Constructive ownership means the aggregate of direct and indirect holdings. On the general Kazakhstan corporate income tax rate of 20 per cent, the treaty benchmark is a 15 per cent nominal rate. The new Code contains a quantitative filter keyed to aggregate income: where the aggregate income of each controlled foreign company or of its permanent establishment is below 195 times the monthly calculation index as at the first day of the tax period, that company or permanent establishment, if not registered in a state with preferential taxation, is not treated as a controlled foreign company; on the 2026 MCI of KZT 4,325 that threshold is approximately KZT 843,375, whereas under the former Code it stood at 150,495 times the MCI. A branch, representative office or other permanent establishment of a foreign company owned by a resident to 25 per cent or more qualifies as a CFC permanent establishment where it is registered in a state with preferential taxation or its effective rate is below 10 per cent. The financial profit attributable to the resident’s share is included in the resident’s taxable income regardless of any dividend distribution and is taxed as corporate income tax for legal entities and personal income tax for individuals, with credit for tax paid abroad. The duty to file a statement of participation or control arises from participation or control irrespective of whether taxable profit exists.

19. Sources

Tier 1 — primary sources

•     Tax Code of the Republic of Kazakhstan (Law No. 214-VIII of 18 July 2025) — Adilet legal information system

•     Tax Code of the Republic of Kazakhstan — table of contents, Chapter 33 on the taxation of controlled foreign company profit

•     Tax Code of the Republic of Kazakhstan of 25 December 2017 No. 120-VI (repealed from 1 January 2026), Chapter 30, Articles 294 to 298

Tier 2 — professional commentary

•     PRO1C — Corporate income tax changes in the new 2026 Tax Code: the 195 MCI threshold

•     Aidar Masatbayev — The legal regulation of controlled foreign company taxation in Kazakhstan (Paragraf)

•     Talzhanov K., Kereibayev G. — Participation of Kazakhstan residents in controlled foreign companies (Paragraf)

•     Uchet.kz — Taxation of a controlled foreign company (CFC)

•     Kursiv — Kazakhstan changes the taxation of controlled foreign companies

Related UPPERSETUP analysis

•     Kazakhstan + UAE: The Dual Structure in 2026 — Tax, Treaty, Permanent Establishment and the Currency Perimeter

•     Kazakhstan’s Tax System 2026: the New Tax Code, CIT, VAT, PIT and AIFC Incentives

•     LLP (TOO) in Kazakhstan for Foreigners 2026: Registration, Visa, Taxes and AIFC Comparison

•     Hong Kong + UAE: Dual Structure for International Business 2026

Need your structure tested against the CFC rules? UPPERSETUP supports international structures with Kazakhstan beneficiaries: mapping the ownership chain to the ultimate resident, computing the constructive holding and the effective rate, checking the state against the preferential list, assessing the available exemptions and preparing the statement of participation. Discuss your project with UPPERSETUP

Disclaimer

This material is provided for informational purposes only and does not constitute legal, tax, financial, investment or consulting advice. Certain provisions are drawn from the former version of the Tax Code and from practitioner commentary and require verification against Articles 332 to 336 as in force. Obtain individual professional advice before acting. Information is current as of August 2026.