Kazakhstan, the world's largest landlocked country, has a vibrant used car market where Chinese cars are increasingly becoming popular. In response to changes in the automotive industry, Kazakhstan's regulatory system is adjusting to control the inflow of second-hand vehicles thereby ensuring a balance between market demands and policy objectives. This paper examines the regulatory framework in Kazakhstan for importing used cars from China and focuses on importation policies, taxes as well as documentation.

Overview of the Automotive Market in Kazakhstan

The automotive industry in Kazakhstan has experienced a steady growth characterized by an increasing demand for second-hand cars from China. In 2023, GDP of the country reached 261.34 billion USD with GDP per capita at 12,256 USD. The auto market witnessed a sale of 200,000 vehicles, marking a 60.3% year-on-year rise that points to strong demand for cars.

Import Policies for Used Cars from China

The purpose of Kazakhstan’s importation policy is to ensure that there is a high standard of cars in the country:

•       No right-hand drive vehicles are allowed.

•       Cars with engines bigger than 3 liters are prohibited.

•       Since becoming a member of WTO, the nation has gradually decreased import taxes for cars.

Taxation Policy for Used Car Imports

The taxation policy on incoming second-hand vehicles is an elaborate system aimed at striking a balance between revenue generations for the country and fostering a healthy car industry. Here are some specifics:

Customs Duty:

Depending on the car’s age and engine capacity, customs duty levied differs. The following examples will elucidate this:

•       Cars over seven years old with a displacement between 1500ml and 3000ml are subject to a 15% customs duty.

•       For cars with a displacement exceeding 3000ml, the customs duty rate is determined between 15% and 18%.

•       For used cars over seven years old, the import duty is calculated at a rate of 0.5 euros per cubic centimeter of engine displacement. However, the total customs duty must not be less than 15% of the vehicle's total cost.

•       There is a minimum threshold for customs duty payments. For example, for cars with a displacement between 1500ml and 3000ml, the customs duty must not be less than 0.6 euros per cubic centimeter.

VAT:

All imported second-hand cars are subjected to one VAT that is uniform across the board at 12% regardless of any specs.

Scrapping Tax:

Basically, this is an additional fee based on a vehicle’s age and engine capacity that is meant to discourage imports of older less environmentally friendly cars.

Electric Vehicle Incentives:

To promote sustainable transport, from May 2023, citizens of Kazakhstan are exempted from import duties while purchasing electric automobiles for personal usage. The new policy aimed at stimulating domestic market growth for electric cars.

Documents Required For Importation Of Second-Hand Vehicles

Here, is a list of documents needed for smooth customs clearance of imported autos:

•       Technical passport copy or certificate of ownership

•       Original vehicle registration certificate

•       Commercial/purchase invoice

•       Bill of Lading (BOL)

•       Customs declaration form

•       Invoice with detailed vehicle information (VIN, engine number, production year, model, color, and reasonable customs value)

•       Letter of commitment (for temporary imports up to 12 months)    

Market Dynamics and Future Outlook

China and Kazakhstan have strong bilateral trade ties with the former being a key trading partner to the latter. Moreover, there is a growing preference among Kazakh buyers for Chinese cars as shown by Chery, JAC and ChangAn brands penetration into local market. The market for Chinese used cars is expected to be more stimulated by a fresh policy that waives import duties on electric cars.

Summary: The importation of used cars from China is an important element of Kazakhstan's auto industry strategy. With a well-defined importation policy and taxation standards, this country tries to create a market that is consumer oriented. In future, as the market keeps changing, such regulations will determine the nature of Kazakhstan’s automotive industry.

Please note that used car import tax rates and policies may change over time or be adjusted according to the latest regulations from the government. Therefore, it is advisable to confirm the most current tax information with relevant tax and customs authorities before importing.