25 December 2023
The Kazakhstan Association of Blockchain Technologies and Data Centres collaborates with the government to amend tax legislation, fostering the growth of digital mining and asset exchanges.
Kazakhstan has taken a significant step towards fostering the development of its digital asset industry by revising specific tax regulations. The Kazakhstan Association of Blockchain Technologies and Data Centres has worked closely with key government bodies and the Parliament to review taxes and payments that previously hindered the growth of digital mining and digital asset exchanges. This collaborative effort has resulted in President Kassym-Jomart Tokayev signing a law on amendments and additions to tax legislation. These changes aim to create a more favorable environment for the digital asset industry in Kazakhstan.
Lower Payments for Digital Mining
One of the key revisions in the tax legislation is the reduction in payments for digital mining. Previously, the rate of payment for consuming 1 kilowatt/hour of electricity varied depending on the cost of electricity and amounted to 26 tenge. However, starting from January 1, 2024, the payment for consumption of 1 kilowatt/hour of electricity by digital mining will be fixed at 2 tenge. Additionally, the payment rate for digital mining when using its own generating facilities, previously set at 10 tenge, will be revised to 1 tenge. These adjustments aim to incentivize digital mining activities in Kazakhstan by reducing the financial burden on miners.
VAT Exemption for Digital Asset Exchanges
In a move to enhance the competitiveness of Kazakhstan’s digital asset exchanges in the global market, the revised tax legislation exempts registered exchanges from paying value-added tax (VAT) on digital asset transactions. The previous obligation to pay VAT put Kazakhstani exchanges at a disadvantage compared to their international counterparts. The exemption from VAT is seen as a timely and justified measure to level the playing field and encourage the growth of digital asset exchanges in the country.
Eliminating Duplication and Ensuring Transparency
Another important change in the tax legislation is the exclusion of Article 264 of the Tax Code, which was deemed redundant due to the duplication of existing regulations. This streamlining of the tax code ensures greater clarity and transparency in the regulatory framework governing the digital asset industry in Kazakhstan. The Kazakhstan Association of Blockchain Technologies and Data Centres remains committed to monitoring and revising any regulations that impede the regular development of the digital asset industry, with the goal of creating a transparent and thriving ecosystem.
Conclusion:
The recent revisions to Kazakhstan’s tax legislation mark a significant milestone in the country’s efforts to foster the growth of its digital asset industry. By reducing payments for digital mining and exempting digital asset exchanges from VAT, Kazakhstan aims to create a more favorable environment for businesses operating in the digital asset space. These changes not only level the playing field for Kazakhstani exchanges but also incentivize digital mining activities. As the Kazakhstan Association of Blockchain Technologies and Data Centres continues to work towards creating a transparent industry, these revisions pave the way for the regular development of the digital asset ecosystem in Kazakhstan.
