In 2026, the standard VAT rate in Kazakhstan is 16%; for each transaction, the accountant determines the tax treatment under the rules of the Tax Code of the RK, based on the substance of the transaction and the regime prescribed for it. The provisions on special tax regimes for the self-employed and the transition to the new regime do not in themselves establish a VAT exemption for sales (Articles 719 and 840 of the Tax Code of the RK).
How to determine whether a transaction is subject to VAT
It is not sufficient for an accountant to rely solely on the name of the goods, services, or agreement. First, the actual substance of the transaction must be established, and then the procedure for recording it under the current provisions of the Tax Code of the RK must be determined. The standard VAT rate in 2026 is 16%, but no conclusion regarding a specific sale can be made without considering all of its terms.
It is convenient to perform the practical review sequentially:
- Determine exactly what is being sold: goods, work, a service, or another item.
- Establish the date of the taxable turnover and check the provisions effective on that date.
- Clarify the tax status of the seller and the buyer to the extent that it is relevant to the transaction.
- Review the substance of the agreement, source documents, and the intended purpose of the goods, work, or services being sold.
- Establish whether the standard procedure or another expressly prescribed procedure applies to the transaction.
- Document the conclusion and consistently record the selected regime in the source documents and accounting system.
The wording “not subject to VAT” does not in itself explain the tax basis. Documents should specify the regime corresponding to the particular transaction rather than reproduce wording from another agreement or a previous period.
If the documents do not make it possible to establish the substance of the transaction unambiguously, the accountant must compare the agreement, invoice, delivery note, acceptance certificate, and other source documents. Similar names of goods or services do not mean that the terms of their sale are identical.
The date of the transaction must also be considered separately. If an agreement is concluded in one period while the sale and preparation of documents occur in another, the applicable procedure is determined under the rules effective for the relevant transaction. In 2026, the standard VAT rate is 16%.
Is the medical sector subject to VAT in 2026?
The mere classification of a seller or service as belonging to the medical sector is not sufficient to determine its VAT treatment. To classify the transaction, it is necessary to establish separately the subject matter of the sale, the supplier's status, the availability of the required permits, the intended purpose of the supply, and other conditions to which the Tax Code of the RK links the tax treatment.
A single tax regime cannot be applied simultaneously to all medicines, medical devices, and medical services based solely on their common purpose. The conclusion must relate to a specific sale and be supported by the agreement and source documents.
The cited provisions of Articles 719 and 840 of the Tax Code of the RK govern special tax regimes and transitional rules. They do not contain provisions establishing a separate VAT rate for the medical sector or a list of exempt medical transactions. Therefore, a rate other than the standard rate of 16% may be applied to medical sales, or an exemption may be stated, only if there is a corresponding basis in the applicable provision of the Tax Code of the RK.
Article 719 of the Tax Code of the RK establishes the procedure and conditions for the special tax regime for the self-employed: taxable income under this regime is income from permitted activities, and the tax period is a calendar month. This provision governs the calculation of individual income tax and social payments under the relevant special regime and does not determine the VAT treatment of medical goods and services (Article 719 of the Tax Code of the RK).
Article 840 of the Tax Code of the RK contains transitional rules for taxpayers that applied special tax regimes before 1 January 2026. In particular, transition to the special tax regime based on a simplified declaration required submission of a notification by 1 March 2026; if it was not submitted, taxpayers, except in cases expressly specified in the article, are deemed to apply the generally established taxation procedure (Article 840 of the Tax Code of the RK).
Transition to the generally established procedure or application of a special tax regime does not replace the analysis of a specific sale for VAT purposes. The accountant must separately determine the applicable taxation regime of the taxpayer itself and the procedure for recording each transaction.
When VAT does not apply and what must be substantiated
The phrase “not subject to VAT” should be used only when a corresponding basis has been established for the specific transaction and its prescribed conditions have been met. Merely specifying the field of activity, the intended purpose of the goods, or the counterparty's status is insufficient.
To substantiate the selected regime, the accountant should collect documents establishing:
- the subject matter and material terms of the agreement;
- the type of goods sold, work performed, or services rendered;
- the transaction date and the period in which it is recorded;
- the status of the seller and the buyer, if relevant to taxation;
- the intended purpose of the goods or services when the conditions for applying a particular regime depend on it;
- the availability of a licence or another permit if one is required for the relevant activity;
- the transaction's compliance with the conditions of the applicable provision of the Tax Code of the RK.
The documents must substantiate not only the general name of the transaction but also the circumstances based on which the accountant selected the rate or another procedure for recording VAT. For example, the description of a service in the agreement and the acceptance certificate must not contradict each other.
If an organisation conducts several types of activities, the regime must be determined for each category of transactions. Grouping all sales under a single setting increases the risk that the 16% rate or another prescribed procedure will be applied to a transaction without regard to its actual terms.
The tax treatment of a transaction should not be confused with the taxpayer's taxation regime. The special tax regime for the self-employed establishes a simplified procedure for calculating and paying individual income tax and social payments, while income is recognised on the date of settlement for goods sold, work performed, or services rendered (Article 719 of the Tax Code of the RK).
For taxpayers transitioning from special tax regimes in 2026, compliance with the transitional rules is important. A notification on the application of the regime based on a simplified declaration had to be submitted by 1 March 2026 if the taxpayer intended to apply this regime and met the prescribed conditions (Article 840 of the Tax Code of the RK).
If such a notification was not submitted by the prescribed date, the taxpayer is deemed to apply the generally established procedure, except for the exclusions expressly specified in Article 840 of the Tax Code of the RK. This transitional outcome must be taken into account when configuring the accounting system and documenting transactions, without using it as a substitute for a separate VAT analysis.
What an accountant should check in the accounting records and 1C
Once the tax treatment has been determined, it must be reflected consistently in the agreement, source documents, and accounting system. Discrepancies between documents, the inventory item record, and transaction parameters may result in an incorrect VAT calculation.
If 1C displays the message “The goods do not comply with the ‘Subject to VAT at the buyer’ tax regime”, the item settings, document parameters, and actual purchasing terms must be compared. The message indicates a mismatch between the selected details but does not itself determine the correct tax treatment.
Working procedure for the accountant:
- determine the substance of the transaction based on the agreement and source documents;
- check the transaction date and the provisions applicable during that period;
- verify the VAT rate in the inventory item record and the document;
- for the generally established procedure in 2026, take into account the VAT rate of 16%;
- check the tax status of the parties and the mandatory document details;
- compare the transaction regime with the accounting system settings;
- resolve discrepancies before the document is finally posted;
- retain the documents substantiating the selected procedure.
If the software displays a validation message, manually changing the rate or regime without analysing the transaction may result in another discrepancy. First, the substance of the transaction and the applicable rule should be established, and then the accounting settings should be aligned with the documents.
When a taxpayer transitions to another regime in 2026, the transition date and the information recorded in the accounting system should be checked. Under Article 840 of the Tax Code of the RK, for taxpayers that submitted the prescribed notification, the date on which the previously applied special regimes terminate and the new regime begins is the effective date of the Tax Code of the RK (Article 840 of the Tax Code of the RK).
For the self-employed, except for activities conducted in locations without access to a public telecommunications network, income records are maintained in the income register of a special mobile application based on receipts and other income information. When operating in an area without such a network, records are maintained using an independently developed simple form containing the prescribed information (Article 719 of the Tax Code of the RK).
Frequently asked questions
Is every sale in Kazakhstan subject to VAT? — The treatment is determined based on the specific transaction and the applicable provisions of the Tax Code of the RK. In 2026, the standard VAT rate is 16%; however, the substance and terms of the sale must be considered for correct documentation.
When can “not subject to VAT” be stated? — When a corresponding basis is prescribed for the specific transaction and the documents substantiate that all of its conditions have been met. The general name of the goods or services is insufficient for such a conclusion.
Are medical services subject to VAT in 2026? — The decision is made based on the specific service, the supplier's status, and the terms of the sale. In the absence of another procedure prescribed for the transaction, the standard VAT rate of 16% applies.
Do all medicines have the same VAT treatment? — No, the treatment cannot be determined solely based on the word “medicine”. The accountant compares the characteristics of the goods, the terms of supply, the documents, and the applicable provision of the Tax Code of the RK.
Does the special tax regime for the self-employed affect the VAT conclusion? — Article 719 of the Tax Code of the RK governs the simplified procedure for calculating individual income tax and social payments, the taxable item, the recognition of income, and its accounting under this special regime. For VAT purposes, the specific sale must be analysed separately (Article 719 of the Tax Code of the RK).
What happened if the notification was not submitted by 1 March 2026? — Taxpayers specified in the transitional provision that did not submit a notification are deemed to apply the generally established procedure, except for the exclusions prescribed by the article (Article 840 of the Tax Code of the RK).
What should be done when 1C reports an error concerning the “Subject to VAT at the buyer” regime? — Check the document details, the item settings, and whether the selected regime corresponds to the actual purchasing terms. The setting should be changed after the correct procedure for recording the transaction has been determined.
Sources
- Tax Code of the Republic of Kazakhstan, Article 719 “Procedure and Conditions for Applying the Special Tax Regime”.
- Tax Code of the Republic of Kazakhstan, Article 840 “Transitional Provisions Concerning Taxpayers Applying Special Tax Regimes”.