The Battle against Tax Havens Rages on in Kazakhstan . . . Tax Treaty Partners Being Victimized

Abstract

This article analyses Controlled Foreign Company (CFC) rules in Kazakhstan which are becoming a topic of growing concern among Kazakh tax practitioners, businessmen and enterprises with international structures since as of 2009 the CFC legislation became applicable to Kazakh resident individuals and went as far as blacklisting several Kazakhstan treaty partners. The authors review the evolution of the CFC legislation over the last fifteen years and highlight key elements of the current rule (including situations of multiple taxation and non-taxation) as well as interaction of domestic CFC provisions with treaty law, using as examples Kazakhstan-Switzerland double tax treaty and EU-Kazakhstan Partnership and Cooperation Agreement