From January 1, 2026, a new Tax Code came into force, providing for an updated approach to the application of investment tax preferences.
One of the main objectives of investment tax preferences is to create more favorable conditions for making investments, modernizing production capacities, and expanding the activities of enterprises.
Investment tax preferences allow taxpayers to take certain investment-related expenses into account when determining taxable income, thereby reducing their tax burden.
Conditions for Applying Investment Tax Preferences
Investment tax preferences are applied at the taxpayer’s discretion and consist of allocating expenses included in the initial cost of the preference objects to deductions.
Legal entities of the Republic of Kazakhstan are entitled to apply investment tax preferences, except for legal entities that meet one or more of the following conditions:
the taxpayer is a participant of Astana Hub;
the taxpayer is a participant of the AIFC;
the taxpayer is engaged in the production and/or sale of all types of alcohol, alcoholic beverages, and tobacco products;
the taxpayer applies the special tax regime provided for in Section 16 of the Tax Code.
At the same time, the list of assets eligible for investment tax preferences has been expanded.
Preference objects include assets that meet the requirements established by tax legislation, including:
buildings;
structures;
machinery;
equipment;
software.
Thus, the new mechanism makes it possible to take into account not only traditional capital investments in buildings, structures, and equipment, but also expenses related to digitalization and the implementation of software.
However, the inclusion of an asset in the above list does not in itself mean that an investment tax preference will automatically apply. Such assets must simultaneously meet the requirements provided for in paragraph 3 of Article 283 of the Tax Code throughout the monitoring period.
For the purposes of applying the preferences, the monitoring period means at least three tax periods following the tax period in which the preference object was recognized.
Procedure for Applying the Preferences
The taxpayer independently chooses the procedure for applying investment tax preferences in accordance with the rules established by the Tax Code.
The preferences are applied using one of the following methods:
the deduction method after recognition of the object;
the deduction method before recognition of the object.
The method of deduction after recognition of the object means allocating the initial cost of the preference objects to deductions in the tax period in which the object is recognized.
The method of deduction before recognition of the object means allocating expenses included in the initial cost of the object to deductions in the tax period in which such expenses were actually incurred.
Tax Accounting for Preference Objects
For tax accounting purposes, preference objects are accounted for separately from fixed assets registered in accordance with the procedure established by the Tax Code.
Preference objects are accounted for separately for each object to which the preference is applied.
The initial cost of a preference object is determined taking into account the expenses provided for by tax legislation.
Such expenses include, in particular, the costs of purchasing, producing, constructing, assembling, and installing the object, as well as other expenses that increase its value in accordance with International Financial Reporting Standards and the legislation of the Republic of Kazakhstan on accounting and financial reporting.
At the same time, the Tax Code establishes a list of expenses that are not included in the initial cost of a preference object.
In addition, Article 285 of the Tax Code provides for cases in which investment tax preferences may be revoked.
In particular, if the taxpayer violates the conditions for applying the preferences during the established period or circumstances provided for by the Tax Code arise, the preferences are subject to revocation, with the corresponding tax consequences.
