On July 18, 2025, the President of Kazakhstan enacted Law No. 215-VIII, which introduces substantial amendments to the transfer pricing (TP) regime. These changes—which will come into effect on January 1, 2026—seek to strengthen tax control, prioritizing substance over form in transactions with related parties, redefining reporting thresholds, adjusting compliance deadlines, and establishing stricter rules for financial and intangible transactions.
For multinational companies with operations in Kazakhstan or linked to local entities, these changes imply a thorough review of contracts, transfer pricing methodologies, documentation, and internal governance.
Main changes introduced
“Substance over form” principle for transactions involving intangibles
The “substance over form” principle is explicitly incorporated: in controlled transactions involving intangible assets, the authorities must assess the actual conduct of the parties, the functions actually performed, and the risks assumed, rather than relying solely on the legal form of the contract. This implies that contracts that, even if valid in form, could be questioned if the actual substance does not correspond.
This change reinforces the need to perform a detailed functional analysis, documenting the actual operational substance, and maintaining evidence that the agreed consideration corresponds to the actual economic contribution (value of intangibles, services, licenses, etc.).
New definition of “intangible asset” and new rules for financial transactions
The law explicitly adds the definition of “intangible asset” as an identifiable non-monetary asset that constitutes intellectual property in accordance with the regulatory acts of Kazakhstan.
Likewise, for financial transactions—for example, intercompany loans—the concept of “risk-free interest rate” is introduced for various currencies (tenge, euro, dollar, etc.), suggesting that the authorities will rigorously review whether the rates applied comply with regulatory requirements considering risks, premiums, and market consistency.
These changes mean that companies must review:
- Their intangible asset transfer/license agreements to ensure that they reflect actual substance;
- Their intra-group financing agreements, justifying the rate applied and documenting the risk assumed;
- The underlying economic structure, not just the legal form.
Country-by-country (CbC) reporting threshold and threshold conversion
The threshold for the country-by-country (CbC) reporting obligation, set at €750 million, will now be converted using the official exchange rate published by the Central Bank of Kazakhstan, rather than the market average. This seeks to improve legal certainty and consistency in currency conversion.
This adjustment may alter the population of companies subject to CbC reporting, so multinational groups will need to recalculate their regulatory exposure and assess whether they should prepare and maintain the report for 2026.
Reduction in the deadline for submitting documentation upon request
The deadline for taxpayers to respond to requests for information or documentation justifying the transaction price is reduced from 90 to 30 days.
This measure increases the pressure on companies’ tax/finance departments, as it requires them to have their documentation organized, updated, and ready for submission in a much shorter time frame.
Practical implications for multinational companies
The changes introduced require companies to conduct a preventive review of their transfer pricing structure and strengthen their internal practices:
- Review intangible and intragroup financing contracts, ensuring that they reflect real substance: functions, risks, economic activity, effective use of the asset, and value contributions.
- Perform or update functional analyses, highlighting the real contribution of each entity: operational functions, risks assumed, use of assets, and economic substance.
- Document robustly all relevant transactions—services, intangibles, financing—with technical, economic, and accounting support, ready to be delivered within 30 days if requested.
- Review CbC reporting obligations and other transfer pricing reports under the new conversion thresholds to avoid non-compliance.
- Evaluate and adjust intragroup prices, margins, and conditions to ensure they comply with the actual market and withstand a substance-based audit.
- Strengthen your internal tax governance and compliance processes, especially in groups with diversified international structures.
Conclusion
The 2025 reform of Kazakhstan’s transfer pricing regime marks a shift toward an approach based on economic substance, beyond mere contractual formality. For multinational groups, this represents a window of opportunity to review and improve their intragroup policies, contracts, documentation, and operating structures so that they are aligned with the new regulations—and prepared to comply with stricter requirements from January 1, 2026.
For many companies, the key will be to anticipate: review intangibles and financing, document appropriately, and adapt internal prices in line with economic reality. Those who make this effort will be able to reduce the risk of adjustments, penalties, or conflicts with the Kazakh tax authority.
Strengthen your transfer pricing compliance
At TPC Group, we help you manage risks, optimize your documentation, and ensure that your intra-group operations comply with international standards. Our specialized team provides comprehensive advice and solutions tailored to your business. Contact us and enhance your organization’s fiscal strength.
Source: RegFollower