The 27th meeting of the Project Office for the Implementation of the Tax Code, chaired by Deputy Prime Minister – Minister of National Economy Serik Zhumangarin, reviewed the taxation of quasi-public sector bond operations during off-exchange trading following their acquisition on Kazakhstani stock exchanges.

As part of expanding the list of Kazakhstani securities accessible through the international central securities depositories Euroclear and Clearstream, options are being explored to widen foreign investors' access to quasi-public sector bonds. Non-residents are expected to become the main holders of such securities through Euroclear/Clearstream.

However, current tax legislation does not fully regulate the taxation of capital gains income from securities when they are subsequently sold outside the Kazakhstan Stock Exchange.

As Deputy Governor of the National Bank Aliya Moldabekova noted, when a non-resident sells quasi-public sector bonds on the Kazakhstan Stock Exchange, the income from capital gains is exempt from taxation. However, current legislation does not provide for a similar approach if those same securities are subsequently sold outside Kazakhstani stock exchanges.

This issue is becoming particularly relevant given the expansion of transactions via international depository infrastructure. Trades between non-residents within Euroclear/Clearstream systems do not go through Kazakhstani trading and settlement infrastructure. Meanwhile, when off-the-counter (OTC) transactions take place between non-residents and Kazakhstani market participants, the tax exemption provided for operations on the organized market through Kazakhstani stock exchanges does not apply.

The outstanding volume of tenge-denominated bonds issued by quasi-public sector entities currently stands at approximately 17.6 trillion tenge. Based on the average share of non-residents in total government securities over the last eight months of 2026 (8.1%), the potential volume of their investments in quasi-public sector bonds could reach around 1.4 trillion tenge.

Thus, differences in the tax regime for exchange and off-exchange transactions could create an additional barrier for foreign investors and limit the potential for quasi-public sector bond circulation through international depository infrastructure.

Following the discussion, participants of the Project Office generally supported an approach to exempt capital gains income from taxation for relevant transactions conducted outside Kazakhstani stock exchanges.

The Ministry of National Economy, together with the Ministry of Finance, will draft the necessary amendments to tax legislation and inform market participants of the results of this work.

#Finance #Serik Zhumangarin #Tax Policy

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