Kazakhstan and Luxembourg: Protocol Ratification

Kazakhstan and Luxembourg have agreed to avoid double taxation.

Majilis approved the Draft Law "On Ratification of the Protocol between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg on Avoidance of Double Taxation and Prevention of Tax Evasion with respect to Taxes on Income and Capital."

"Amendment to the current Convention is caused by the need to protect the interests of the country's budget by exempting paid dividends from taxation if they are linked to state ownership. We have specified the actual owners of the dividends. They are the Government, Central or local authority, National Bank or any other institution in Kazakhstan that is fully owned by the Government," Finance Minister Yerulan Zhamaubayev said at the Plenary Session of the Majilis.

Thus, the purpose of this Protocol is to exempt from paying tax on dividends paid to the Government of Kazakhstan when holding shares in companies registered in Luxembourg. Zhamaubayev noted the important role of the document as a legal framework for taxation between the two states. Implementation of the Protocol will not require financial expenditures from the state budget.

Today, there are 27 legal entities, branches and representative offices with Luxembourg participation in Kazakhstan. They paid KZT 37 bln. of taxes for 2019.