Kazakh freelancers will no longer need to pay mandatory pension contributions

ASTANA – Freelancers who combine work and have employment contracts will soon be exempted from the obligation to pay pension contributions.

Photo credit: kazpravda.kz.

According to the Ministry of Labour and Social Protection, the Law of Kazakhstan on Amendments and Additions to Certain Legislative on Employment dated Dec. 27, 2018 was amended to simplify the procedure for paying mandatory pension contributions.

The changes are expected to be implemented in the first quarter of 2019. Once implemented, citizens combining labour activity as an employee (that is, within individual labour contracts) and performing work or services under civil law contracts nature, will be exempted from the obligation to pay mandatory pension contributions from their income.

But the ministry also reported that individuals who perform work or provide services under contract agreements concluded with individuals are entitled to participate in the accumulative pension system. They can independently disburse mandatory pension contributions in their favour.

Legal entities or individual entrepreneurs will pay for individuals performing work or services and having contracts with the legal entities or individual entrepreneurs. In this case legal entities or individual entrepreneurs act as tax agents who calculate and pay individual income tax for freelancers.

The ministry’s press service also reported that the ministry considered the opinion of many representatives of this category of working citizens, government officials and legal entities in making the changes.