DT11057 | Double Taxation Relief Manual : Kazakhstan: royalties

Royalties arising in Kazakhstan and paid to a resident of the United Kingdom who is the beneficial owner of the royalty are taxable in Kazakhstan at a rate not exceeding 10 per cent (Article 12(2)).

However, where the royalty is effectively connected (see INTM153110) with a permanent establishment or fixed base which the UK resident recipient has in Kazakhstan, it is not taxable under Article 12. Instead, the provisions of the Business Profits Article (Article 7) or the Independent Personal Services Article (Article 14) will apply (Article 12(5)).

In addition, where a United Kingdom resident is the beneficial owner of royalties in respect of leasing that arise in Kazakhstan, he may, by election to the competent authority in Kazakhstan, be taxed in Kazakhstan as if the right or property in respect of which such royalties are paid is effectively connected with a permanent establishment or fixed base which the United Kingdom resident recipient has in Kazakhstan (Article 12(3)). Where such an election is made the royalties are deemed to arise in Kazakhstan and are taxed under the Business Profits Article (Article 7) or the Independent Personal Services Article (Article 14) and not Article 12.