Introduction

Kazakhstan has made a significant step towards attracting foreign tourists and developing retail trade by introducing the Tax-Free system. This pilot project allows foreign citizens (excluding citizens of Russia, Belarus, Armenia, and Kyrgyzstan) to reclaim the value-added tax (VAT) on goods purchased within the republic. This article will discuss the key aspects and expected effects of the implementation of the Tax-Free system in Kazakhstan

Pilot Project: First Steps

The Tax-Free system was launched on a pilot basis at the “Esentai Mall” shopping center and Almaty International Airport in Almaty. This pilot program is the result of the joint efforts of the Ministry of Finance of the Republic of Kazakhstan and the company “Global Blue”, the leading Tax-Free operator in the international arena.

Legal Basis

The project is implemented on the basis of the Rules approved by the Order No. 871 of the Acting Minister of Finance of the Republic of Kazakhstan dated August 13 2019, with subsequent amendments extending the term of the pilot project until December 31, 2024. According to these Rules, participants of the pilot project are taxpayers who have a trading place in Esentai Mall and are VAT payers.

VAT Refund Process

The Tax-Free system allows foreign buyers to reclaim VAT under certain conditions. For this, the buyer must make a purchase of at least 73,840 tenge (164 USD in 2024) and receive a Tax-Free document (receipt) on the same day. The buyer must present passport and the fiscal receipt within one day after the purchase.

The VAT refund is only applicable to non-food items purchased from participants in the Tax-Free system at Esentai Mall. The buyer must leave Kazakhstan with the goods within 90 days of purchase.

Expected Results

The introduction of the Tax-Free system aims to enhance Kazakhstan's attractiveness to foreign tourists. It is expected to attract an additional 300,000 foreign tourists per year. According to forecasts, the economic impact of the Tax-Free system in the country will amount to about 440 million USD by 2025.

The role of “Olympex Advisers” LLP

"Olympex Advisers" played a crucial role in developing and coordinating the

Tax-Free project. It not only represented the interests of the Ministry of Sports and Culture of the Republic of Kazakhstan and taxpayers but also actively assisted in the creation and launch of the pilot project. "Olympex Advisers" is ready to provide practical assistance to all participants of the pilot project concerning VAT refunds.

Conclusion

The introduction of the Tax-Free system in Kazakhstan represents an important step towards the development of shopping tourism and increasing trade turnover in the country. This project has every chance to become a successful example of effective use of tax mechanisms to stimulate economic growth and attract foreign tourists.

Author: Ainagul Akisheva (Director of the internation taxation and securities group) [email protected]