On Cryptocurrency Mining Taxation in Kazakhstan

At the end of June this year, the Head of State signed the Law "On Amendments to the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget." According to it, miners will be taxed at the rate of 1 tenge per 1 kWh of consumed electricity.

The calculation was made taking into account the interests and potential risks for investors, which made it possible, without losing the investment attractiveness of our country, to provide for additional funds from the crypto industry to the state budget.

The passed law also helped identify miners who tend to hide their activities. Now, everyone engaged in digital mining activities in the legal field and outside it will make mandatory payments for electricity consumption.

As you know, in 2020, due to the amendments to the legislative acts regulating digital technologies, digital mining activities in Kazakhstan became legal. The digital asset obtained as a result of this activity was recognized as an object of civil law. The law also determined the procedure for informing about mining activity. Informing was not mandatory, and the norm was more of a declarative nature. It means it did not provide for liability for nonfulfillment.

Today, there are specific mechanisms aimed at legalizing mining activity.

Digital mining activities and the crypto industry, in general, are relatively new for Kazakhstan and the whole world. That makes it extremely sensitive to any unreasonable reforms.

Therefore, we observe gradual and balanced legislative regulation without excessive burdens for investors. This is why, the investment climate in Kazakhstan is rapidly becoming more favourable for investors in digital mining and the latest technologies in general, compared to the neighbouring countries that are tightening their legislation.

Karashev Dauren 

Director of the Legal Department

of Kazakhstan Association of Blockchain Technologies