Kazakhstani employer vs employee - citizen of Russian Federation.
Пост обновлен 23 дек. 2019 г.
The article might be useful to Kazakhstani employers which attract to work citizens of Russian Federation.
1) Work activity of a citizen of the Russian Federation on the Republic of Kazakhstan;
2) Tax liabilities of a citizen of the Russian Federation and his employer in the Kazakhstan.
According to the agreement on the Eurasian Economic Union of January 1, 2015 year, the Republic of Kazakhstan and the Russian Federation are parties of the EAEU. In connection with the above, there is a visa-free regime between these countries. Thus, company do not need to get a Work Permit for employee to carry out work activities on the Republic of Kazakhstan. In this case, it will be enough to conclude labor agreement with employee and make appropriate registration at migration body.
In accordance with the Labor legislation of the Republic of Kazakhstan, the following documents are required to conclude labor agreement:
1) Document on education (diploma, certificates, etc.);
2) Proof of employment or record of service;
3) Medical Examination Certificate;
4) Original passport.
Please also pay attention that there is no need to legalize educational documents (diploma, certificates) issued by educational institution of the Russian Federation. According to the EAEU agreement, employee has the right to stay on the territory of the Republic of Kazakhstan without registration 30 days. If the employee stays in the RoK more than 30 days from the date of entry, the company within 3 work days must submit a notification to the Migration body about the arrival of a foreign employee for the duration of labor agreement and provide the following documents:
1) Copy of labor agreement;
2) Original of migration card;
3) Original of the passport.
After providing the necessary documents, the officer of the Migration body, within one working day return to the foreign employee the original passport, migration card, and special permit to carry out work activities in the Republic of Kazakhstan.
Please note that the company must notify the Migration body by official letter about enters of employee to the Republic of Kazakhstan each time, within three working days from the day of arrival.
2) Tax liabilities of a citizen of the Russian Federation and his employer in Kazakhstan.
Taxation of non-residents guide by Section 19 of Tax Code of Republic of Kazakhstan. In this case Personal Income Tax which holds from employer for the foreign citizen – 20% for servise contract; 10% based on employement agreement.
Before company could pay taxes for the foreign employee, the employee must obtain IIN (tax ID number) in Committee of state taxes of the Republic of Kazakhstan. Thus, only after the employee can start to work officially. Usually, the process of obtaining of IIN take at least 3 wotk days.
If employee has a residence permit of the Republic of Kazakhstan, then company must pay the same taxes as for a citizen of the Republic of Kazakhstan. Namely, Personal Income Tax, Social Security Rate, Pension Contributions, Medical Insurance.
Social Security Rate is paid depending on the taxation regime. That is, if the LLP work according to the generally established taxation regime (20% CIT) and simplified taxation system (3% CIT/PIT), then the employer pays Social Security Rate at a rate of 9.5%, which is determined by Article 485 of Tax Code RoK.
Contributions for Medical Insurance, in accordance with paragraph 1 of Article 27, paragraph 3 of Article 29 of the Law of the Republic of Kazakhstan dated November 16, 2015 No. 405-V “On Compulsory Social Medical Insurance” for 2019 year - is 1.5%.
In 2020-year, Medical Insurance will be - 2%.
If employee does not have a residence permit, employer pays the same taxes as for the citizen of the Republic of Kazakhstan, except of Pension Contributions, and such employee not eligible for Personal Income Tax benefits.