The Double Taxation Relief (Taxes on Income) (Kazakhstan) Order 1998

Explanatory Note

(This note is not part of the Order)

The Protocol scheduled to this Order makes certain alterations to the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Kazakhstan) Order 1994.

The Protocol introduces into Article 11 of the Convention an exemption from tax in the source State where the interest is paid by the Government of that State, a local authority thereof, or any agency or instrumentality of that Government or local authority to a resident of the other State (Article I).

The Protocol amends the provisions of Article 25 of the Convention to provide that an additional tax at a rate not exceeding five per cent. may be imposed on the profits (where those exceed £70,000 in the tax year after deducting all taxes chargeable in the State imposing the additional tax) of a permanent establishment which a company resident in one State has in the other State. If Kazakhstan, under a Double Taxation Convention with a State, other than the United Kingdom, that is a member of the Organisation for Economic Co-operation and Development, may not charge the additional tax on permanent establishments in Kazakhstan of companies resident in that State, then the additional tax may not be charged on permanent establishments in Kazakhstan of companies resident in the United Kingdom (Article II).

The Protocol will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures. It will then have effect in the United Kingdom on or after 1st April in respect of corporation tax and on or after 6th April for income tax and capital gains tax in the calendar year next following that in which it enters into force (Article III). The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.