Thursday, September 15, 2016

Kazakhstan Taxation - some questions and some reflections

Since I am not an expert on Kazakh law or Kazakh taxation law, this post should in no way be construed as legal opinion or advice. These are solely my reflections after discussing with some of the tax accountants in Astana and Almaty and I am only summarising what they told me in our informal chat. I am not sure if they were/are right and therefore, request anyone who knows anything on the matter to share his/her views.

The origin of the talk:

I along with some of my friends, citizens from different countries and not from Kazakhstan, wondered one fine day if we could start some business in Astana, Kazakhstan. We had questions in mind about the legal and tax implications of doing business on a "freelance" basis, or through formal partnership.

Since we are not the high net worth individuals and have thin pockets, we were thinking of opening something small. A small enterprise which mostly works on teaching, tutoring, selling of travel and tour packages and visa and documentations like notary, and legalisation and so on. The business which mainly focusses on the service aspect.

Then, we wondered what would be our tax liability as an individual, and the tax liability of our small firm (Partnership Firm or Limited Liability Partnership - LLP).

We did bit of internet research. We downloaded "Doing business in Kazakhstan" document prepared by almost all of the Big4s. Some of our doubts were answered and some remained unanswered. The target of the Big4s (if you do not know who they are, they are the world famous big accounting and consulting firms namely EY (Ernst & Young), KPMG, Deloitte, and PwC) was obviously the deep pocketed multinationals and their heavily paid "expatriates". For poor "migrants" like us, they offered too little and in any case, we could not afford their services.

Hence, we started using our local contacts - wonderful Kazakh people - who are working in different companies and firms. They were kind and listened to our problems and offered their gratuitous advice and knowledge over a cup of coffee. Based on our conversations with few of those accountants, we have prepared this small "note". The focus of this "note" is mainly the freelancers - both local and immigrants and should be read in that context.

So, the main takeaways are:

1. The good news is that Kazakhstan's tax rate in general is flat 10%. I would say that the rate is pretty low and favourable for entrepreneurs.

2. For freelancers and for service providers, you have the option of selecting "simplified tax regime". That gives you even better deal where you have to pay tax at 3% rate. The downside of this scheme is that you can not deduct any expenses from your total income while computing taxable income. That means whatever you have earned/collected, you must pay tax on that entire amount. The rent amount , the salaries of the employees to name a few are nondeductible.

3. In both the above schemes of 1 & 2, if you have employees and if you pay salary to them (of course!, you will have to pay), then, you have to deduct income tax on their salary at 10% rate and deposit to tax office. This is a worldwide concept known as TDS (tax deduction at source).

4. In both the schemes of 1 & 2 above, in addition to TDS of 10% (that you deduct from the salary to be paid to employees), you should also pay pension contributions at 10% rate and the social contributions at 5% rate. The computations can be pretty tedious to explain on this post.

5. In Scheme 1 explained above and in the scenario of TDS on the employee's' salary, there is an exemption on minimum monthly wages. That is no tax has to be paid on Minimum Wage Amount which is 22,859 KZT for 2016. To make it simple, If you pay salary of 60,000 KZT per month to your employee, you have to deduct income tax amount of 3,115 KZT from his salary and deposit it to tax office. This amount of 3,115 KZT is calculated as follows:

TDS = (Total salary - Minimum Wages stipulated by government - Pension Contributions at 10%)* 10%

= (60,000-22,859-6,000)*10% =3,115 KZT

6. The most scariest part of Kazakh Tax system is that if you earn (as a freelancer) more than 22,859 KZT per month (i.e.  more than 68 USD per month, or 807 USD per year), you have to pay tax at 10% with permissible business deductions or at 3% without any deductions in your total earnings. IS NOT THAT SCARY?

Let me give little perspectives from India as I come from there. In India, you have to pay your income tax only if you earn more than 3,732 USD. Therefore, I feel that paltry exemption of 274,308 KZT is in effect an incentive for many not to complete the tax laws. I think Kazakh government should look into it on the light of inflation and currency devaluation of last year.

For a rough calculation of how Income tax is computed in India, you can follow this link:
https://cleartax.in/guide/income-tax-slabs

7. Now, who can resort to "simplified tax regime" of 3%? I understand that only the Kazakh Citizens and the foreigners having Kazakh residence permit can open such venture opting for 3% tax regime.
One of my accountant friends has to say this:

"According to Article 6 of the Law of the Republic of Kazakhstan "On legal status of foreigners temporarily staying in the Republic of Kazakhstan", foreigners are not entitled to carry out entrepreneurial activity as subjects of small and medium entrepreneurship without forming a legal entity. Individual entrepreneurs can only be the subjects of small or average business, and can not be in accordance with paragraph 8 of Article 6 of the Law "On private entrepreneurship entities of a large enterprise. Therefore, the registration as the individual businessman of an alien not having a residence permit belonging to any state, is impossible.

I have copied the response without making any grammatical or other changes and I am not very sure of everything but I understood that foreigners can not opt for 3% tax regime unless they have permanent residence from Ministry of Internal Affairs after approval from National Security Council (NSC).

8. With respect to minimum Wages, I understand that it is 22,859 KZT per month for 2016. This is based on the information received from my accountant friend but I am not sure about the source of the information. I think the Kazakh government announces minimum salary/wage level every year by notification.

By the way, I found KPMG Tax Alert "Doing Business in Kazakhstan" and it confirms the above view. You can access the document from here:

https://www.kpmg.com/KZ/ru/IssuesAndInsights/ArticlesAndPublications/Documents/Doing-business-in-Kazakhstan.pdf

9. The link below gives the tax code of Kazakhstan, 2015 in English. It is a bulky document and needs special skill to go through it. In case you are interested to learn more:

http://kgd.gov.kz/sites/default/files/npa/Kodeks/the_tax_code_of_the_rk_2015.pdf

10. And Finally, the entrepreneurs who opt for simplified tax regime of 3% need to declare the transactions only twice in a year and need to pay tax twice for respective six months' period.

So, it is as follows:

1. For the business income of January-June: Declare the income and amount of taxes by 15 August, and Pay the tax by August 25
2. For the business income of July-December: Declare  the income and amount of taxes by 15 February, and Pay the tax by February 25

EDITED ON 10/01/2017: The Minimum Wages stipulated by the Government for the year 2017 is: 24,457 KZT. I read it somewhere on the internet but I am not able to verify it independently.

At the cost of being repetitive, Since I am not an expert on Kazakh law or Kazakh taxation law, this post should in no way be construed as legal opinion or advice. These are solely my reflections after discussing with some of the tax accountants in Astana and Almaty and I am only summarising what they told me in our informal chat. I am not sure if they were/are right and therefore, request anyone who knows anything on the matter to share his/her views.

Sunday, August 28, 2016

IELTS Academic Test - Questions from the past - conducted by InterPress, Astana

My another student Assem appeared for Academic IELTS yesterday (on 27.08.2016). She had registered for IELTS via InterPress, Astana, Kazakhstan and it was conducted in Miras International School in Astana. Her Speaking Test was conducted few days ago. When I asked her if the examiner in Speaking test was a native english speaker. Her answer was very interesting. She said, "No, there was a Russian woman with blond hair." Well, that is not important.

We generally talked about her test and she could remember only the few questions from reading paragraphs.

The questions were:

1. The first passage about "Movement of Honey bees, and their effect on pollination"
2.  Corporates and their marketing strategies and consumer behaviour
3. She could not remember the third question/reading passage. :)

Let me know your exam experiences and the questions if you remember.

Regards,
-Your Astana English Teacher: Raj


IELTS Academic Test - Questions from the past - conducted by British Council in Astana, Kazakhstan

These are the questions sent by my student-Nargis. She appeared for Academic IELTS Test conducted in Astana, Kazakhstan. Her IELTS Academic Test in Astana, Kazakhstan was conducted sometimes ago- most probably a month ago but due to lack of time, I could not update my post earlier. Here are the questions for Speaking from The IELTS Academic Test.

Part I

1. Do you work or study? Where do you work? What work do you do?
2. Why do you like your work?
3. Do you like advertisements on TV?
4. Is there any type of advertisement that you especially like? or that attracts you, or influence you to buy something?
5. Do you like Sunny weather? and why?
6. Where can we see advertisements?
7. Do we really need advertisements?
8. Why do people put/publish advertisements on Internet?

Part II

(To be prepared in a minute and to be spoken for 1-2 minutes)

1. Tell us a situation when you felt angry.
- When you felt it.
-What kind of situation that made you feel angry.
- Overall, how you felt and why you felt so.

The image of the Questions can be seen here:

IELTS Academic Test - Questions from the past - conducted by British Council in Astana, Kazakhstan

These are the questions sent by my student-Nargis. She appeared for Academic IELTS Test conducted in Astana, Kazakhstan. Her IELTS Academic Test in Astana, Kazakhstan was conducted sometimes ago- most probably a month ago but due to lack of time, I could not update my post earlier. Here are the questions for Speaking from The IELTS Academic Test.

Part I

1. Do you work or study? Where do you work? What work do you do?
2. Why do you like your work?
3. Do you like advertisements on TV?
4. Is there any type of advertisement that you especially like? or that attracts you, or influence you to buy something?
5. Do you like Sunny weather? and why?
6. Where can we see advertisements?
7. Do we really need advertisements?
8. Why do people put/publish advertisements on Internet?

Part II

(To be prepared in a minute and to be spoken for 1-2 minutes)

1. Tell us a situation when you felt angry.
- When you felt it.
-What kind of situation that made you feel angry.
- Overall, how you felt and why you felt so.

The image of the Questions can be seen here:

Saturday, August 27, 2016

How to get 7 in IELTS Examinations - Some tips from Astana

I have written a facebook post and you can access it from here: https://www.facebook.com/astanaenglish?hc_ref=NEWSFEED&fref=nf

For those who are preparing for IELTS exam in Astana, Kazakhstan.
I often get questions from students in Astana if I have proven and tested tricks and tips to get IELTS score anything more than 7. Quite Often, they are happy to know that I have multiple tricks and tips but the most important one is "the hard work". Not many appreciate my answer but I repeat many times that there is no shortcut to success.
My only advice to everyone (who has a dream to have a wonderful english language skill) is they should constantly read, read and read and practice, practice and practice. 3-4 hours classes alone will not take you that far when your foundation of english is not that great.
1. Please read the modern english literature (books and magazines) and not the books from 19th Century with "Shakespearean" English.
2. While preparing for IELTS, please focus on your general english as well. Many students struggle even to produce simple sentences with proper "Subject verb agreement" and the correct use of passive sentences is a rare phenomenon. Therefore, while reading texts, read slowly and understand how the writers have formed the sentences.
3. Don't be obsessed with "difficult" words from early stage of your learning. Let the progression be natural. If you are trying to use not so ordinary words, understand their collocation. Don't just throw off words randomly.
4. Avoid talking nonsense. I often hear the sentences: "Yesterday, I went somewhere to do something." "Before coming to class, I had to do something, or I had some deal to do."
5. Please give up the habits of using Ving/Continuous tense.
6. The final tip for the day, Listen (No need to watch) to natural native accent on youtube. If you have difficulty to catch properly pronounced words, start from elementary podcasts/dialogues/lectures.

Friday, August 26, 2016

IELTS Academic Speaking- Speaking Part Cue Card - Part II / Part - 2

This was one of the questions asked in IELTS ACADEMIC SPEAKING Part-2 question to my student in Astana, Kazakhstan. She had taken the test sometimes in June, 2016 in an IELTS TEST conducted by Inter press, Kazakhstan. The test was conducted in Miras International School, in Astana, Kazakhstan.

She was asked to prepare for a minute and she needed to speak for 1-2 minutes. The question was:

Tell about your most favourite dress.
When did you buy it?
When did you wear this cloth the last time?
Why was it so special to you?

My student said that she described about her dress which she wore in her brother's marriage. As per her, she described that the dress was a costly one and she especially bought it for the wedding party. The dress was especially designed by city's famous designer and looked very modern and classy. She wore it on the wedding night while welcoming guests and thereafter, she has not worn it. She thinks that the dress has become old now and has gone out of fashion but she does not want to sell it or dispose it off in anyway. It is lying in her wardrobe.

More or less, that was her response. What do you think? How did she do it? How would you have done it differently? Think about it and let me know in the comment section.

#IELTS #IELTSAstana #IELTSKazakhstan #IELTSAcademic #IELTSEnglishTest #IELTSTEST
Do visit our blog regularly. We will bring you more test questions and answer very soon.

Goodbye!

Подготовка к IELTS в Алматы, Астане, Актау, Атырау
сдавать экзамены IELTS. Сдача теста IELTS играет немаловажную роль в жизни человека, если он принял решение пройти обучение за границей

Полностью провалить экзамен IELTS невозможно. Минимальную оценку «0» тестируемый получает лишь не прибыв на сдачу экзамена. В остальных ситуациях сертификат выдается с полученными баллами от одного до девяти (1-9) – данные показатели и будут являться Вашей оценкой.

В основном, для иммиграции достаточно набрать 5-6 баллов, а для того, чтобы поступить в зарубежное учебное заведение уже необходимо получить 7-7,5 баллов.

Срок действительности сертификата IELTS составляет всего 2 года. По окончанию этого срока придется заново идти на подтверждение своих языковых знаний.

В ходе экзамена IELTS оценке подвергаются все языковые умения и навыки тестируемых. Так как в ходе тестирования оцениваются и чтение, и письмо, и разговорная речь, и аудирование, то каждая из этих оценок вносят равный вклад в конечный результат экзамена.


Существует два вида экзаменов IELTS:

Academic module – рассчитан на поступление в учебное заведение;

General module – рассчитан на уезжающих за рубеж на работу или постоянное место жительства.

 Статистика показывает, что большинство людей, которые сдали General module отправляются потом в Канаду, Новую Зеландию, Австралию.

А те, кто получил сертификат IELTS Academic module, выбирают пунктом назначения страны Европы.

Для того чтобы Вы могли успешно сдать экзамены по IELTS мы предлагаем Вам пройти специальные курсы «Подготовка к IELTS».

Курсы IELTS проводят квалифицированные специалисты. Подготовкой руководят как местные преподаватели, так и носители языка (иностранные преподаватели).

 Длительность курса составляет 45 академических часов (5 недель).

Занятия проходят как в группах, так и индивидуально.

 Программа курсов подготовки к IELTS включает в себя все направления тестов:

- ielts writing;

- ielts speaking;

- ielts listening;

- ielts reading.

С нами Вам всегда доступна подготовка к IELTS в Астане!    

Thursday, August 25, 2016

Academic IELTS Writing Task -1/Writing Task -1 Academic IELTS


IELTS Academic Task -1/ Writing Task -1 Academic IELTS

1.      You should spend about 20 minutes on this task.
The figure gives information about smoking habits of the UK population by age.
Summarize the information by selecting and reporting the main features, and make comparisons where relevant.
Write at least 150 words.



The bar chart compares the data about the patterns of smoking habits of the UK residents and the comparisons have been done by age group. Overall, the majority of people who have never smoked belong to the age group of 16-24 and the least number of people from the age group of 65-74 are people those have never smoked.

As can be seen from the pie chart, almost two-thirds of young people below 24 years of age have never smoked in their life. However, as people grow, the numbers of people who have never smoked start getting reduced. Therefore, in the age category of 65-74 years, the number of people who have never smoked is the least.

Another glaring feature the pie chart presents is that there are more numbers of people who start quitting smoking as they grow older especially after they attain the age group of 45-54. Therefore, the ex-smokers, the people who have stopped smoking, keep on rising significantly in each age group after they are older than 54. For example, when people are in the age bracket of 45-54, there are only 10% ex-smokers. The figures get more than doubled (almost 25%) when people are within the age group of 55-64. This trend continues and the maximum number of people who have given up smoking are older than 65. In this group of 65-74, almost 40% people can be seen as those who used to smoke earlier but do not smoke any more.

The number of heavy smoker has risen in each age category and has reached the high of almost 15% when people are in the age bracket of 45-54 but thereafter, it has fallen gradually. The similar trend can be observed even in case of light smokers after they reach the age of 45 and thereafter. (Total 302 Words)

(My Note: In actual IELTS exam, you cannot write answer with 302 words because you do not have time to write this long and there is no point to write a long answer. Try to make your answer within the word limits i.e. little more than 150 words. The above Task has been rated as answer falling around the IELTS band of 7.0)

IELTS Task 2-Academic IELTS Writing Task -2


IELTS Academic Task -2/ Writing Task -2 in IELTS
 

1. You should spend about 40 minutes on this task.
Sending criminals to the prison is not the best method of dealing with them. Education and job training more are better ways to help them. To what extent do you agree or disagree with this opinion? Use specific reasons and examples to support your answer. You should give reasons for your answer using your own ideas and experience.

From the time immemorial, it has been a matter of debate how a criminal be punished. Of course, there are people who advocate one way or the other but in my view, we need to find a middle path to make sure that the punishment on the one hand, deters the potential criminal and on the other, it helps to reform the people involved in illegal activities.

First of all, we need to differentiate between the crimes which shock our conscience and the minor ones. I strongly believe that punishment and in some cases, severe punishment is the only way out to deter the people committing crimes which are against life, liberty and humanity. What I mean by this is that we should adequately punish the wrongdoers when they are involved in heinous crimes such as gory killing, cold blooded murder, rape, arsons out of vengeance etc.

In contrast to such views, I hold a slightly different opinion when the crimes are petty and born out of compulsion or some grave circumstances. That’s why I believe that the minor crimes like pick pocketing, thefts where the motive of commission of such crimes is to sustain one’s family should be treated differently. An opportunity to reform should be given to such person committing such minor offences. We cannot change our society by crowding our prison cells. Imparting education and providing quality jobs are prerequisites of reforming such people.

Therefore, in my conclusion, I would like to summarise my viewpoint that education alone can help to move people away from the criminal world. The punitive measures should be adopted only in case of serious offences. (Total 273 words)

(My Note: The above Task has been rated as answer falling around the IELTS band of 7.0)

IELTS Writing Task -2: Academic IELTS Essay Writing Task 2



IELTS Writing Task 2/ IELTS Essay:

1.      You should spend about 40 minutes on this task.
Too much emphasis is placed on testing these days. The need to prepare for tests and examinations is a restriction on teachers and also exerts unnecessary pressure on young learners. 

To what extend do you agree or disagree?
Give reasons for your answer and include relevant example from your own knowledge or experience.

It is no doubt that students need to be tested before awarding any degree or certificate. Every institution must conduct its own examination to assess students so that they can declare if the students have sufficiently gained required knowledge on the given subject. Therefore, in my view exams are as important as other segments of education and I disagree with such views which may think tests and examinations are unnecessary.

First of all, examinations provide an opportunity for students to display their ability. They can provide the proof of successful completion of their education in the future when they enter the job market by submitting the grades and marks received by them. In the absence of exams, neither the students get motivated to excel academically nor can prove in the future the amount of knowledge he has acquired.

Secondly, it is difficult to imagine any alternative mechanism by which progress of a student can be measured. If we do not have any benchmark, for example, grades, then, it will be extremely problematic for a prospective employer to award the job contract to the best and the deserving candidate. For example, if a pharmaceutical company need a graduate with outstanding credentials in the field, it may certainly be very challenging to them to select the best one in absence of grades as grades can be awarded only after formal examinations.

Therefore, in my conclusion, I would like to summarise my argument that exams and tests are indispensable in the sphere of education. This is why every student should be encouraged to take academic tests seriously in his life. It is beyond our imagination to have any alternative to formal testing. (Total 279 Words)

(My Note: The above Task has been rated as answer falling around the IELTS band of 6.0)

IELTS ACADEMIC WRITING TASK - 2 (IELTS in ASTANA, KAZAKHSTAN) IELTS Академическое письмо ЗАДАЧА - 2 (IELTS в Астане, Казахстан)


IELTS ACADEMIC WRITING TASK - 2 (IELTS in ASTANA, KAZAKHSTAN) IELTS Академическое письмо ЗАДАЧА - 2 (IELTS в Астане, Казахстан)
IELTS ACADEMIC WRITING TASK - 2 (IELTS in ASTANA, KAZAKHSTAN) IELTS Академическое письмо ЗАДАЧА - 2 (IELTS в Астане, Казахстан)IELTS ACADEMIC WRITING TASK - 2 (IELTS in ASTANA, KAZAKHSTAN)   IELTS Академическое письмо ЗАДАЧА - 2 (IELTS в Астане, Казахстан) 

 

IELTS Writing Task - 2

 You should spend about 40 minutes on this task.
A number of different medical traditions are now widely known and used: Western medicine (using drugs and surgery), herbal medicine, acupuncture (using needles at certain points of the body), homeopathy (using minute doses of poisons), and so on. How important is the patient’s mental attitude towards his/her treatment in determining the effectiveness of the treatment?
Give reasons for your answer.

When a person suffers from a medical problem, it is natural for him to seek an appropriate treatment. What treatment would be the good choice depends on his or her own’s beliefs and faiths. Irrespective of the kinds of treatment chosen, I believe that a great deal of effectiveness of medicine is a direct outcome of patients’ mental attitude and condition.

First of all, patient should shed the fear of deaths or negative thoughts. A positive thought in mind will always bolster to make wonder in patient’s life and recovery from the diseases. Also, patient should consult a good medical practitioner and should trust the judgement received from him or her. If a sick person has complete trust and faith on the doctor and the drugs prescribed, there will be fewer chances of missing the schedule of consumption of medicine.

Secondly, when a person who is ill is in anxiety, additional complications can be seen in such person and it is likely that this will exacerbate the existing pitiable condition. Anxiety can, therefore, lead to additional unwanted symptoms and problems in patient. Additionally, the man suffering from such fateful diseases loses sleep and hunger. Hence, the consequences of lack of trust and faith can be fatal and disastrous.

One more point that I would like to make is that different people show different reactions to a medicine. A drug, a medical treatment and related medical procedures work smoothly only when other health parameters are stable. Therefore, in my conclusion, I would like to state that we should seek medical service by keeping a faith in the system and should realise early that our own psychological reactions can determine the course of our health. (Total 283 words)

(My Note: The above Task has been rated as answer falling around the IELTS band of 6.0)