Transfer Pricing in Kazakhstan

The legal framework

Kazakhstan regulates transfer pricing outside its Tax Code. The operative instrument is the Law on Transfer Pricing No. 67-IV of 5 July 2008, in force since 1 January 2009, which repealed the 2001 statute on state control over the application of transfer prices (Article 20). The Tax Code of 18 July 2025 (Code No. 214-VIII, effective 1 January 2026) does no more than point to it: Article 176 provides that the tax authorities exercise transfer pricing control in the manner and in the cases set by the transfer pricing legislation. The Code supplies the surrounding machinery — audits, limitation, appeals, mutual agreement procedure, and the constructive dividend that follows an adjustment.

Two features will surprise a practitioner arriving from a Guidelines-based system. The first is that control attaches to the transaction, not to the relationship. Article 3(1) subjects every international business operation to transfer pricing control — broadly, any transaction with a non-resident not registered in Kazakhstan, and transactions residents conclude abroad — whether or not the parties are associated. Domestic transactions are drawn in where they are directly interconnected with an international business operation and one of four conditions is met: a party sells minerals extracted by a subsoil user, a party enjoys tax privileges, a party reported losses in the two preceding tax periods, or the parties face different corporate income tax rates. Relatedness still matters, but for documentation thresholds and for median-based adjustments — it is not the gateway to the regime.

The second is that the OECD Transfer Pricing Guidelines carry no legal weight. Law No. 67-IV does not incorporate them, and the only OECD reference in the statute is an Article 11 carve-out keyed to listings on OECD-country exchanges. Kazakhstan joined the Inclusive Framework in the second half of 2016 but has never filed an OECD transfer pricing country profile, so this guide is built from the Kazakh primary sources on Adilet rather than from a profile questionnaire. What Kazakhstan has done instead is legislate the concepts directly. Article 10-2, effective 1 January 2026, writes accurate delineation, functional and risk analysis, DEMPE and non-recognition into statute, together with a four-step risk framework and a rule capping a funding-only legal owner at a risk-free return.

Methods, comparables and benchmarking

Article 12 lists five methods — comparable uncontrolled price, cost plus, resale price, profit split and net profit — but the hierarchy is rigid rather than a best-method test. CUP has statutory primacy; the other four become available only where CUP cannot be applied, and the choice must be justified by the nature of the transaction, a functional analysis, information availability and comparability.

For commodities, Article 13 is unusually prescriptive. Where the contract sets a quotation period, price is the arithmetic mean of daily quotations from a single source across that period, adjusted by the differential — the correction bringing prices to comparable economic conditions (Article 2(7)). A quotation period cannot exceed 31 consecutive calendar days and, once fixed in the contract, cannot be changed for twelve months. Statutory windows constrain where it may sit: five quotation days either side of title transfer for seaborne oil, the month of title transfer for pipeline oil, up to 62 days either side for other exchange commodities. Each documented delivery is treated as a separate transaction, and external comparison must be exhausted before internal comparison.

Since Law No. 68-VIII of 25 March 2024, range construction is statutory. Article 17-1 provides that a single observation is the range, two or three values run minimum to maximum, and four or more give the interquartile range between the 25th and 75th percentiles. Every value in a price range must come from one and the same information source, and profitability ranges are built on the three calendar years immediately preceding the transaction year. Article 17-2 then defines the five permitted profitability indicators exhaustively; a PLI outside that list is simply unavailable.

The binding constraint, however, is Article 18. Information sources rank in four tiers and the range must be built from at least one officially recognised source. That list, approved by Order No. 757 of 12 July 2023, consists entirely of price reporting agencies and exchanges — S&P Global Commodity Insights, Argus, Fastmarkets, LME, LBMA, CRU, APK-Inform, Bloomberg for financial services. No corporate financial database appears on it. A conventional database benchmarking study therefore sits in the lowest tier, cannot displace a listed price source where one exists, and is an express ground on which the SRC may refuse an advance pricing agreement.

Documentation: what the State Revenue Committee expects

Article 7 builds documentation in three tiers, with forms and completion rules set by Order of the Minister of Finance No. 1104 of 24 December 2018 — amended in 2022, in 2024, and again by Order No. 419 of 4 August 2025, which changed the country-by-country completion rules with effect from 1 January 2026. The local file (form 013 МО) is due within twelve months of the reporting financial year, so the 2025 file falls due on 31 December 2026. It is required where the taxpayer both had Article 3(1) transactions with related parties and had revenue of at least 5,000,000 MCI. Note the trap: that revenue test uses the MCI in force on 1 January of the year preceding the reporting year, while the 250,000 MCI materiality test that determines what goes inside the file uses the MCI at 1 January of the reporting year. At the 2026 MCI of KZT 4,325 those are roughly KZT 21.6 billion and KZT 1.08 billion; restate them for each year before advising.

The master file (014 ОО) is filed only on demand, within 30 calendar days, and the SRC cannot demand it earlier than twelve months after the year end. Secondary commentary putting the master file on a twelve-month clock is wrong — twelve months is the local file and CbC deadline. Both master file and CbC turn on consolidated revenue of at least the EUR 750 million equivalent, computed on the arithmetic-average official exchange rate, where the ultimate parent is a Kazakhstan resident; where the parent or surrogate is foreign, that jurisdiction's own threshold governs. A notarised copy of the parent's document discharges the obligation, and notarisation is not required if it was filed electronically abroad.

Inside the local file, the tested party must be identified and the choice justified, with the search methodology, information source, comparability adjustments and the arm's length conclusion all stated against the range. The functional profiles the rules list — full-fledged, contract or toll manufacturer, full-risk or limited-risk distributor, agent, lender, borrower, service provider, licensor, licensee — are given as examples and required only where necessary, so a profile that fits the facts better is not precluded.

Two further layers are easy to miss. Every member of an international group must file a statement of participation by 1 September of the following year. And Article 6 requires an annual transaction monitoring report on listed international business operations — 28 commodity categories by HS code plus loans, construction, equipment installation, marketing and freight forwarding — at the 250,000 MCI threshold, on seven new forms from 1 January 2026. Do not conflate this with tax monitoring under the Tax Code, an unrelated taxpayer regime that only affects audit and appeal timings. Local and master files must be in Kazakh or Russian, filing is electronic through ISNA with a digital signature, and TP adjustments surface in the CIT return at annex lines 100.01.021 II and 100.01.044 II.

Audits, penalties and the enforcement climate

A TP audit is a thematic tax audit. The base period is 30 working days, extendable to 40-50 for single-location taxpayers, 65-160 where there are structural subdivisions or permanent establishments, and 180 under tax monitoring — and because suspension periods are excluded from the count for transfer pricing audits, they run open-ended in practice.

The adjustment itself is one-way. Article 10(1) lets the SRC adjust items of taxation where terms or prices deviate from market, taking account of the price and profitability ranges, and Article 10(6) adds fines and interest. Article 10(9) then permits an adjustment only where it increases, or may later increase, tax — so there is no unilateral downward relief; correlative adjustment runs through MAP. Worse, Article 10(5) requires adjustment to the median of the range, not to the nearest edge, for counterparties in preferential-tax states, barter, loss-makers in the two preceding periods, privileged parties and set-off settlements, and Article 10(5-1) extends median adjustment to related-party transactions generally. A marginal comparability point therefore converts into a substantial assessment.

The cost stack is heavy. Article 278 of the Code of Administrative Offences adds 80% of the assessed tax for large business (50% medium, 20% small); Article 273 fines up to 350 MCI for monitoring and document-production failures and 500 MCI for a large business that fails to file TP reporting; Article 10(7) withdraws tax and customs privileges for the period; and the adjusted amount is recharacterised as a constructive dividend under Tax Code Article 13(3)(1), withheld at 15%, or 20% where the recipient sits in a preferential-tax state. Enforcement is concentrated on oil and gas exporters, and the reported grounds are all differential arguments: the wrong quotation basis for Baltic and Black Sea cargoes, the spread taken at charter party date, the differential excluded outright on Chinese-direction deliveries.

There is a 10% tolerance for agricultural produce and a narrow forward-contract exemption, but those are the only meaningful safe harbours.

Dispute resolution and advance certainty

Kazakhstan gives no penalty protection for holding contemporaneous documentation. The protection that exists is behavioural: under Article 10(11), a taxpayer that adjusts its own position before a comprehensive audit covering TP or a thematic TP audit begins pays tax computed on the price or profitability range without fines. That makes an annual self-review, closed before the audit season, the single most valuable control a Kazakhstan group can run.

Advance certainty is available but modest. The APA programme under the Rules approved by Order No. 414 of 15 April 2022 is unilateral only — there is no bilateral or multilateral track. Applications are free-form with nine document categories, the SRC decides within 90 working days, a hearing must be convened no later than three working days before that deadline, and the agreement runs for a maximum of three years from signature. There is no application fee, no monetary eligibility threshold and no rollback. Refusal grounds include a proposed method inconsistent with the Law and, tellingly, the availability of an information source ranking higher under Article 18.

MAP sits in Article 232 of the 2026 Tax Code. The SRC must consider an application within 45 calendar days, refuse to accept within 5 working days where no treaty exists or documents are missing, and inform the applicant of the outcome within 7 working days. A MAP decision binds the tax authorities and extends the limitation period until implemented — which matters, because it is the only route to relief from a one-way domestic adjustment. Domestically, a notice of audit results is appealed to the SRC within 30 working days, with enforcement of the disputed part suspended on filing, and thereafter to the specialised administrative courts. Limitation is five years for large business, subsoil users and CFC-exposed residents, three for others; Supreme Court Normative Resolution No. 9 caps the suspended period at seven years in TP audits, though whether that cap survives the move to Article 65 of the new Code is untested.

Pillar Two and what changes in 2026

Kazakhstan has not enacted the global minimum tax. The 2026 Tax Code contains no GloBE rules, no income inclusion rule, no undertaxed profits rule and no qualified domestic minimum top-up tax. Kazakhstan constituent entities of in-scope groups are therefore exposed to top-up tax charged in other implementing jurisdictions rather than at home, with corporate income tax remaining at 20% for general activity. On Amount B the position is more nuanced than it first appears: Kazakhstan is named on the OECD's June 2024 list of covered jurisdictions for the Inclusive Framework political commitment, so other members would respect its application of the simplified and streamlined approach — but Kazakhstan has not adopted that approach. Law No. 67-IV contains no baseline distribution rules and no fixed-return matrix, and distributors continue to be tested under Article 12's methods and the Article 17-1 interquartile range.

The real 2026 event is domestic. Law No. 215-VIII of 18 July 2025, enacted alongside the new Tax Code, is the most substantial overhaul since 2008. It inserted Article 10-2 with the full delineation, DEMPE, risk and non-recognition apparatus; defined intangible assets and a currency-specific risk-free rate (National Bank base rate for tenge, EURIBOR for euro, SOFR for dollars); restated the EUR 750 million threshold on an arithmetic-average exchange rate basis; tightened the Article 11 relatedness tests; and imposed an express 30-calendar-day deadline to produce price-substantiation documents on request. Alongside it, Order No. 782 of 17 December 2025 re-issued the monitoring rules with seven new forms, and Order No. 695 of 12 November 2025 introduced the tax reporting forms carrying the adjustment lines. Implementation has lagged the drafting: on 4 May 2026 the SRC deferred the 2025 monitoring report to 15 November 2026 while it completes the ISNA functionality for the new forms.

One practical warning. The English text of Law No. 67-IV on Adilet is at least one amendment cycle out of date — it carries no Article 10-2, no intangible or risk-free-rate definitions, and even mis-states the law's number. Work from the Russian consolidated text.

How practitioners should respond

Start with the perimeter, not the group chart. Because control attaches to international business operations rather than to associations, the first exercise is to map every cross-border transaction and every domestic transaction interconnected with one, then test the four domestic triggers. Groups that scoped Kazakhstan on a related-party basis have almost certainly under-identified.

Second, treat the pricing file as a commodities file. Where a Government methodology applies — crude oil and gas condensate above all, but also cold-rolled, hot-rolled and galvanised steel under HS codes 7208, 7209, 7210 and 7225, cotton, natural gas, titanium and magnesium — it displaces the statutory methods entirely, and the contested ground shifts to the quotation basis, the quotation period and the differential. Check the codes: steel outside those four headings is priced under the ordinary Article 12 methods. Build the differential from the recognised sources, document each component (freight, insurance, transshipment, quality discounts, customs), and keep the source consistent across the range as Article 17-1(2) requires. Where no listed source exists, a database study is still the answer, but present it knowing it ranks last under Article 18.

Third, run the calendar. The 1 September participation statement, the 15 May monitoring report, the 31 December local file and a 30-day fuse on any master file or document demand do not forgive slippage, and the fines are size-scaled and repeat-escalating.

Fourth, use Article 10(11) deliberately. Diagnose exposure annually, quantify it against the range, and self-adjust before an audit opens; documentation alone buys nothing. Where an assessment lands, the 30-working-day appeal window and the suspension of enforcement on filing are the immediate levers, and MAP is the only realistic route to the other side of a one-way adjustment.

Finally, refresh the 2024 and 2025 amendment work into existing files. Article 10-2 changes the analysis for intangibles, intra-group financing and any structure where legal ownership and functional substance diverge — and it applies from 1 January 2026 without transitional relief.