How to return of theoverdeductedwithholding tax on deposit interest in Kazakhstan?
If an individual who is a non-resident of Kazakhstan and a resident of Russia receives remuneration on a deposit in a Kazakhstani bank, such income, according to tax legislation, is subject to IIT at the source of payment at a rate of 15%.
However, a Convention for the avoidance of double taxation is in effect between Kazakhstan and Russia, according to it the tax rate on interest may be 10% if the recipient is the beneficial owner of the income and the established conditions for applying the international treaty are met.
In the event that the bank withheld tax at the rate of 15%, the non-resident, provided they have the right to apply the reduced rate, may apply for a refund of the excessively withheld amount.
For this purpose, it is necessary to submit a document confirming tax residency for the relevant period, along with other documents provided for by legislation.
The refund can be processed through the bank acting as the tax agent, or by submitting an application to the tax authority in accordance with the procedure established by the Tax Code of the Republic of Kazakhstan within the statute of limitations.
Thus, in case of non-application by the tax agent of the provisions of the Convention regarding the application of the reduced IIT rate withheld at the source of payment ( 10 percent instead of 15 percent) on the received amount of remuneration from a source in the Republic of Kazakhstan, the non-resident individual is entitled to submit a document confirming the non-resident's residency that complies with the requirements of Article 702 of the Tax Code to the tax agent (in this case, the Bank) for the refund of the excessively withheld tax amount withinthe time limit.
We hereby inform you that Article 699 of the Tax Code of the Republic of Kazakhstan also provides for the procedure for submission by a non-resident of an application for the refund of paid income tax from the budget based on an international treaty.
In doing so, the non-resident is obliged to submit to the tax authority a tax application for the refund of paid income tax from the budget, attaching the documents specified in paragraphs 3 and 4 of this Article.
