Abolition of taxation on pension income in Kazakhstan announced
Tax Changes Affecting Pension Withdrawals in Kazakhstan
Starting from January 1, 2026, a significant change is on the horizon for Kazakhstani citizens receiving pension payments from the Unified Accumulative Pension Fund (UAPF). According to reports by Liter.kz, citing Krisha.kz, all pension payments, including lump-sum withdrawals, will be exempt from personal income tax (PIT) for residents.
This means that from next year, no PIT will be withheld on any pension withdrawals, allowing citizens to receive the full amount without the 10% tax deduction previously applied. Additionally, previously accrued PIT obligations for deferred taxes on lump-sum withdrawals used before retirement, such as for housing or medical purposes, will be cancelled. However, it's important to note that taxes already paid will not be refunded.
Another change concerns tax deductions for voluntary pension contributions made personally. From January 1, 2026, these deductions will be eliminated, removing the ability to reduce taxable income via such deductions. However, voluntary contributions made by employers on behalf of employees will not be considered taxable income for the employee and will remain deductible expenses for the employer, maintaining tax advantages for both parties.
These tax changes are part of broader reforms in Kazakhstan’s tax code effective January 1, 2026, aiming to simplify taxation and eliminate double taxation on pension savings. It's worth noting that non-residents will still be subject to taxation on pension payments.
As for early retirement, details about the criteria for eligibility have not been provided at this time. Regarding tax changes for businesses in general, no information has been announced yet.
[1] Source: Liter.kz, citing Krisha.kz [3] Source: Government of the Republic of Kazakhstan [4] Source: Ministry of National Economy of the Republic of Kazakhstan
- The tax changes in Kazakhstan, effective from January 1, 2026, will exempt all pension payments, including lump-sum withdrawals, from personal income tax (PIT), thus affecting the finance sector.
- Moreover, the elimination of tax deductions for voluntary pension contributions made personally from January 1, 2026, will impact the business sector as it removes the ability to reduce taxable income via such deductions.
