In accordance with paragraph 3 of paragraph 1 of Article 1 of the Tax Code, social payments are mandatory pension contributions, mandatory professional pension contributions, mandatory employer pension contributions, social contributions paid in accordance with the Social Code of the Republic of Kazakhstan, deductions and contributions for mandatory social health insurance paid in accordance with the Law of the Republic of Kazakhstan “On Compulsory Social Health Insurance” (hereinafter referred to as Social Payments).

Payers of Social Payments are legal entities, individual entrepreneurs, including heads of peasant or farm enterprises, as well as their members who have reached the age of eighteen, persons engaged in private practice, and individuals receiving income under civil contracts. Social contributions calculated for participants in the compulsory social insurance system and in their own favor, compulsory pension contributions, compulsory pension contributions by the employer, compulsory professional pension contributions to the unified accumulative pension fund, contributions from employers, contributions for employees, and in their favor to the health insurance fund are calculated at rates determined by the Social Code and the Law of the Republic of Kazakhstan “On Compulsory Social Health Insurance” from monthly income. The calculated amounts of social payments from the object of calculation are subject to payment by payers monthly no later than the 25th day of the month following the reporting month, indicating the month for which social contributions are paid.

Payers, within the period established by the Code of the Republic of Kazakhstan “On taxes and other obligatory payments to the budget” (hereinafter referred to as the Tax Code), submit a declaration on individual income tax and social tax, which reflects information on the calculated and withheld amounts of social payments. Control over the complete and timely payment of social payments is carried out by state revenue authorities.

       Unpaid amounts of social payments on time or in full are collected by state revenue authorities or are subject to transfer by the payer with an accrued penalty in the amount of 1.25 times the base rate of the National Bank of the Republic of Kazakhstan for each day of delay (including the day of payment to the Fund).

The state revenue authority, no later than 5 working days from the date of formation of debt on social payments classified in accordance with the risk management system provided by the Tax Code as a high or medium level of risk, sends a notification to the payer or agent about the amount of debt.

         In case of non-payment of debt on social payments, the tax authority suspends expenditure transactions on bank accounts and the cash desk of the payer or agent. Banks and organizations carrying out certain types of banking operations are required to suspend debit transactions on the bank accounts of payers or agents and follow instructions regarding the transfer of social payments.

       Orders of the tax authority to suspend debit transactions on bank accounts and the cash register of the payer or agent are canceled by the state revenue authority that issued such orders no later than 1 business day following the day of repayment of the debt on social payments.

  In case of failure to repay the debt, payers or the social payment agent are obliged to submit to the tax authority that sent the notification of debt repayment, lists of participants in whose favor the social payment debt is collected. No later than 5 working days, the tax authority issues collection orders to the debtor’s bank accounts with the attachment of lists submitted by the payer or agent.

If there is no or insufficient money in bank accounts to satisfy all the requirements imposed on the client, the bank withdraws the client’s money in the order of priority established by the Civil Code of the Republic of Kazakhstan.

       In accordance with paragraph 8 of Art. 256 of the Social Code, tax authorities annually publish in the media lists of payers and agents who are in arrears on social payments, not repaid within more than six months from the date of its occurrence, indicating the identification number of the payer or agent, last name, first name, patronymic, manager and amount of debt for social payments.

In addition, payers and agents who made untimely or incomplete payment (transfer) of amounts of social payments are brought to administrative responsibility in accordance with parts 91,92, 92-1 of the Code of the Republic of Kazakhstan “On Administrative Offences”.