Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES

v3.26.1
INCOME TAXES
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Group is subject to taxation in Kazakhstan, Kyrgyzstan, Cyprus, Uzbekistan, Germany, Tajikistan, Türkiye, the United Arab Emirates, the United Kingdom and the United States of America.
The tax rates used for deferred tax assets and liabilities for the years ended March 31, 2026 and March 31, 2025, were 21% for the United States, 20% for Kazakhstan (with a higher rate of 25% for banking activities), 20% Azerbaijan, 18% for Tajikistan, 10% for Kyrgyzstan, 15% for Germany, 15% for Cyprus, 25% for Türkiye, 25% for United Kingdom, 9% United Arab Emirates, 18% for Armenia and 15% for Uzbekistan.
As of March 31, 2026 and March 31, 2025, deferred tax assets and liabilities of the Company were comprised of the following:
Year ended March 31, 2026
 Year ended March 31, 2025
Deferred tax assets:
Provisions for contingent liabilities $ 2,100  $ — 
Tax losses carryforward 21,479  4,871 
Deferred acquisition costs and insurance reserves 27,204  6,669 
Provision for impairment losses 19,510  12,181 
Valuation allowance on unrecognized deferred tax assets (27,575) — 
Deferred tax assets $ 42,718  $ 23,721 
Deferred tax liabilities:
Revaluation on trading securities $ 5,107  $ 874 
Fixed and Intangible Assets 7,980  4,425 
Other liabilities —  1,038 
Deferred tax liabilities $ 13,087  $ 6,337 
Net deferred tax assets $ 36,183  $ 17,446 
Net deferred tax liabilities $ 6,552  $ 62 
The Company is subject to the U.S. federal income taxes at a rate of 21%. The reconciliation of the amount computed by multiplying income before provision for income taxes at the 21% income tax rate compared to the Company's income tax expense as reported is as follows:
  Year ended March 31, 2026 Year ended March 31, 2025 Year ended March 31, 2024
 
Income before income tax at 21% $ 47,453  $ 23,719  $ 91,428 
Effect of cross-border tax laws
Global Intangible Low Taxed Income 103,741  65,308  60,323 
Subpart F Income 4,164  4,750  6,887 
Foreign tax effects
Kazakhstan
Nontaxable gains and interest (31,787) (16,154) (108,025)
Commission income (28,639) (27,592) (20,980)
Foreign tax rate differential (1,394) 165  (3,460)
Additional 10% tax 20,901  —  — 
Cyprus
Foreign tax rate differential (21,952) (19,239) (14,492)
Nontaxable gains and interest (1,326) (42) (108)
Top-up tax 10,226  3,743  — 
Other foreign jurisdictions
Foreign tax rate differential 681  129  287 
Nontaxable or nondeductible items
Stock based compensation 13,445  10,597  4,601 
Other permanent differences 24,282  4,159  58,873 
Valuation Allowance (27,575) —  — 
Tax Credits
Foreign tax credit (39,583) (21,118) (14,915)
Income tax expense $ 72,637  $ 28,425  $ 60,419 
As of March 31, 2026 and 2023, income tax expense was comprised of the following:
  Year ended March 31, 2026 Year ended March 31, 2025 Year ended March 31, 2024
Current income tax charge
Federal 922  4,054  34,623 
Foreign 84,093  44,341  24,573 
85,015  48,395  59,196 
Deferred income tax charge
Federal (17,268) (12,715) 3,695 
Foreign 4,890  (7,255) (2,472)
(12,378) (19,970) 1,223 
Income tax expense $ 72,637  $ 28,425  $ 60,419 
During the years ended March 31, 2026, March 31, 2025 and March 31, 2024, the Company realized net income before income tax $225,965, $104,583 and $438,938, respectively. During the same periods, the Company's effective tax rate was
equal to 32.1%, 27.2% and 13.8%, respectively. Tax years ended from March 31, 2026 to March 31, 2022 are remains subject to examination by major tax jurisdictions.
Income before income taxes includes the following components:
  Year ended March 31, 2026 Year ended March 31, 2025 Year ended March 31, 2024
United States $ (134,094) $ (61,060) $ (66,053)
Foreign 360,059  165,643  504,991 
Net income before income tax $ 225,965  $ 104,583  $ 438,938 
As of March 31, 2026, the Company had undistributed earnings of certain foreign subsidiaries of $857,837. The Company intends to reinvest its foreign earnings indefinitely in the non-U.S. operations and therefore has not provided for any non-U.S. withholding tax that would be assessed on dividend distributions. The determination of the U.S. state income taxes upon a potential foreign earnings distribution is impractical. In the event the earnings were distributed to the U.S., the Company would adjust its income tax provision for the period and would determine the amount of foreign tax credit that would be available.
Income taxes paid disaggregated by federal and foreign for the years ended March 31, 2026, March 31, 2025 and March 31, 2024 were as follows:
  Year ended March 31, 2026 Year ended March 31, 2025 Year ended March 31, 2024
US Federal $ 2,110  $ 24,996  $ 15,022 
Foreign 79,190  28,926  15,297 
Income taxes paid: $ 81,300  $ 53,922  $ 30,319 
Income taxes paid disaggregated by individual jurisdiction for the years ended March 31, 2026, March 31, 2025 and March 31, 2024, were as follows:
  Year ended March 31, 2026 Year ended March 31, 2025 Year ended March 31, 2024
United states $ 2,110  $ 24,996  $ 15,022 
Kazakhstan 29,560  2,937  — 
Cyprus 37,414  24,785  15,297 
Armenia 12,216  1,204  — 
Income taxes paid: $ 81,300  $ 53,922  $ 30,319 
Tax loss carryforwards as of March 31, 2026 and March 31, 2025, was $107,792 and $27,280, respectively, in Cyprus and Kazakhstan.
On July 15 and 18, 2025, the President of the Republic of Kazakhstan signed the Law on Amendments to the current Tax Code of the Republic of Kazakhstan, as well as the new Tax Code of the Republic of Kazakhstan, which came into effect starting from January 1, 2026.

The amendments related to the current tax code of Kazakhstan, is effective for the period starting from January 1, 2025 until December 31, 2025, and concerns the procedures and deadlines for filing individual tax returns. There will also be, for 2025 only, an additional 10% applied to the corporate income tax rate on certain types of income, including net income from debt securities issued by Ministry of Finance of Kazakhstan, income from short-term deposits with the National Bank of Kazakhstan (the "NBK"), net income from swaps with maturities of up to one year, and net interest income from direct
and reverse REPO transactions. As a result of this change, the Company's Kazakhstani subsidiaries have incurred additional income tax expense in the amount of $20,901 for the year ended March 31, 2026. The details are presented in the table below:

Tax effect at Kazakhstani subsidiaries
 20,901 
Foreign tax credit used for GILTI and Subpart F Income taxes
 (4,690)
Foreign tax credit used for Pillar II
 (12,649)
Income tax expense effect, net of foreign tax credits
 3,562 
Income before income tax expenses for the year ended March 31, 2026 225,965 
Effect on the consolidated effective tax rate
 1.58  %
The new Tax Code of Kazakhstan, effective from January 1, 2026, is mainly aimed at reducing the volume of tax exemptions and transitioning to differentiated tax rates across various sectors of the economy. The new Tax Code provides for an increase in the corporate income tax rate for the banking sector to 25%, except for income from business lending, the elimination of VAT exemptions on certain financial operations, and an increase in the VAT rate to 16%. Income from government securities will be partially tax exempted from taxable income with a limit up to 50% from total income from government securities.
On July 4, 2025, US President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective from April 1, 2026 and others implemented through 2027.