Yesterday the Committee on Finance and Budget of the Senate of RoK Parliament discussed the draft of the Law on ratification of the Treaty between the Governments of Kazakhstan and Luxembourg for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and capital , and the protocol between the parties on introducing amendments and additions to the Treaty.
The Treaty was executed on June 26, 2008 in Astana. The purpose of the document is to strengthen and expand economic cooperation between Kazakhstan and Luxembourg by creating favourable environment for investments. The Treaty is a bilateral international agreement and is concluded with a view to eliminating double taxation. Each Contracting State shall provide the taxpayer with an opportunity to pay the tax only once – in one of the Contracting States. The other State gives him a credit for the amount of tax paid or excludes the portion already taxed in the other state from taxable gross income.
The Treaty contains provisions under which dividends, interest and royalties may be taxed at a reduced rate in the source country where income arises. In accordance with Article 5 of the Treaty, the legal entity – resident of a Contracting State may be exempted from income tax in a Contracting State if it carries out business activity without creating a permanent establishment.
The Protocol between Kazakhstan and Luxembourg on introducing amendments and additions to the Treaty for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and capital was executed on 3 May 2012 in Luxembourg. The document provides for the expansion of cooperation between tax authorities of the two countries through the exchange of information on tax matters in order to prevent tax evasion, eliminate double taxation of legal entities and individuals who are residents of either Contracting States. The bill was passed to the House for consideration.