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.
