Print TAX CODE OF THE REPUBLIC OF KAZAKHSTAN (June 12, 2001, effective January 1, 2002) (unofficial translation, excerpt)
PART I. GENERAL
SECTION 1. GENERAL PROVISIONS
CHAPTER 1. General Provisions
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Article 10. Definitions
1. Definitions are applied in this Code for the purposes of taxation:
1) charity – assets provided free of charge to individuals for providing them social support and to non-profit organisations for supporting their charter activity; (…)
4) grant – assets, provided free of charge by States, Governments of states, international and state organisations, foreign non-governmental public organisations and funds performing charitable operations at an international level in compliance with the Constitution of the Republic of Kazakhstan, listed by the Government of the Republic of Kazakhstan upon resolution of state agencies to the Republic of Kazakhstan, Government of the Republic of Kazakhstan, legal entities, as well as to individuals; by foreign individuals and stateless persons – to the Republic of Kazakhstan and the Government of the Republic of Kazakhstan for achieving the set goals (objectives);
5) humanitarian aid – assets provided free of charge to the Government of the Republic of Kazakhstan in form of food, consumer goods, equipment, outfit, medications, other goods delivered by other countries and international organisations for improving living conditions of population as well as for prevention and elimination of emergency of military, ecological, manmade and environmental nature, distributed by the Government of the Republic of Kazakhstan through authorised bodies. (…)
15) entity – an individual and a legal entity; an individual – citizen of the Republic of Kazakhstan, citizen of a foreign state, entity without citizenship; legal entity – an organisation formed in accordance with the legislation of the Republic of Kazakhstan or a foreign state (a foreign legal entity). A company, organisation or other corporate body created in accordance with the legislation of foreign states shall be recognised for purposes of this Code as an independent legal entity irrespective whether they have or not the status of a legal entity in the foreign state where they are formed; (…)
Article 12. Taxpayers’ obligations
1. Taxpayers must:
1) fulfil tax obligations in full and on due dates under this Code;
2) fulfil legitimate requirements of tax body on elimination of identified tax violations, as well as not impede lawful activity of tax bodies when performing their functional duties;
3) on the basis of an order of tax authorities allow tax officials to examine the property that is the object of taxation and the object related to taxation;
4) submit tax reports and other documents under the procedure envisaged by this Code;
5) make payments with customers in the process of carrying out trade transactions or rendering services, by way of ready money, bank payment cards, checks, with the use of cash machines with fiscal memory, and give a control check to the customer in accordance with the Code.
2. Taxpayers shall fulfil other obligations envisaged by this Code.
Article 13. Rights and Obligations of Tax Agent
1. A tax agent shall have the same rights and bear the same responsibilities as a taxpayer, unless otherwise is stipulated by the Code.
2. A tax agent must:
1) compute in a correct and timely manner taxes withheld at source of payment in accordance with the Special Part of this Code;
2) withhold appropriate taxes from taxpayer and transfer them to the revenue under the procedure and on due dates stipulated by this Code;
3) keep records of income paid to taxpayers, as well as amounts of taxes withheld and transferred to the revenue, including those related to each taxpayer personally;
4) submit to the tax authority of the place of registration tax reports under the procedure established by the Special Part of this Code.
Article 16. Rights of Tax Bodies
1. Tax bodies shall have the right to:
1) develop and approve normative legislative acts stipulated by this Code;
2) within its competence clarify and make comments on arising, fulfilment and termination of tax obligations;
3) conduct tax monitoring under the procedure set by this Code;
4) check financial documents of a taxpayer, accounting books, reports, estimates, money on hand, securities, calculations, tax returns and other documents related to fulfilment of tax obligations in compliance with the requirements established by legislative acts of the Republic of Kazakhstan;
5) demand from a taxpayer submission of documents on computation and payment (withholding and remittance) of taxes and other mandatory payments to the revenue prepared in the forms established by the authorized state body, instructions on their completion, and also documents confirming the correct computation and timely payment (withholding and remittance) of taxes and other mandatory payments to the revenue, mandatory pension contributions to pension funds;
6) during tax audit performed according to the procedure set by the legislative acts of the Republic of Kazakhstan seize taxpayer’s documents that evidence tax violations;
7) examine any of objects of taxation used for deriving income and objects related to taxation, irrespective of the place of their location, conduct property inventory of a taxpayer (except for dwelling facilities);
8) obtain from a taxpayer under the list approved by the Government of the Republic of Kazakhstan, the information in an electronic form under the procedure established by the authorized state body;
9) as for matters related to the taxation of a taxpayer – legal entity or an individual entrepreneur under audit obtain from banks and organizations conducting certain types of banking transactions, information on existence and numbers of his (its) bank accounts, on balance and cash flow on these accounts in compliance with the requirements established by legislative acts of the Republic of Kazakhstan on disclosure of information of commercial, banking and other secrecy protected by law;
10) determine with application of indirect method the tax obligations of a taxpayer in cases stipulated by the Special Part of this Code;
11) bring actions to courts in accordance with the legislation of the Republic of Kazakhstan.
2. Bodies of tax service shall also have other rights stipulated by legislative acts of the Republic of Kazakhstan.
Article 17. Obligations of Tax Bodies
1. Tax bodies must:
1) respect taxpayer’s rights;
2) protect the interests of the state;
3) perform tax monitoring of fulfilment of tax obligations by a taxpayer and of timely withholding and remittance of mandatory pension contributions to accrual pension funds;
4) keep in the established procedure records of taxpayers, objects of taxation and objects related to taxation, records of assessed and paid taxes and other mandatory payments to the revenue;
5) explain the procedure for completing forms of the established tax reports;
6) conduct tax audits strictly under orders;
7) keep tax secrecy in accordance with the provisions of this Code;
8) deliver to a taxpayer a notice on fulfilment of tax obligation on due dates and in cases, envisaged by this Code;
9) deliver at a taxpayer’s request within 3 days a statement from his personal account on the status of settlements with the revenue related to fulfilment of tax obligations;
10) assure 5 years safety of copies of tax invoices given to a taxpayer to confirm payment of taxes and other mandatory payments to the revenue;
11) perform control over compliance with the procedure for taking inventory, storage, assessment and disposal of property confiscated by the government and also over complete and timely remittance to the revenue of the proceeds from disposal of property.
12) take measures to provide fulfilment of tax obligations and enforce recovery of tax debts from a taxpayer in compliance with the present Code.
13) impose administrative fines on taxpayers in compliance with the Administrative Code of the Republic of Kazakhstan.
2. When tax bodies identify during tax audit facts of premeditated evasion of taxes and other mandatory payment to the revenue, as well as facts of premeditated and false bankruptcy, indicating a violation, they shall send to the relevant law enforcement bodies materials within their competence, for making a procedural decision in accordance with the legislative acts of the Republic of Kazakhstan.
3. Tax bodies shall also fulfil other obligations stipulated by the Code.
PART II. SPECIAL
SECTION 4. CORPORATE INCOME TAX
CHAPTER 15. Taxable Income
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§ 1. Aggregate annual income
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Article 91. Adjustment of Aggregate Annual Income
1. The items not included in aggregate annual income are:
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5) value of the property received as humanitarian aid provided under circumstances of emergency of environmental and technogenic nature and where such aid has been utilised for intended purposes.
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CHAPTER 16. Separate Provisions on Taxation of Certain Categories of Taxpayers
§ 2. Taxation of Other Categories of Taxpayers
Article 120. Taxation of Non-commercial Organisations
1. For purposes of the Code, any organisation which is the non-commercial organisation under civil law of the Republic of Kazakhstan shall be taken to be a non-commercial organisation, except for any such joint stock companies, establishments and consumer co-operatives as do not meet the following requirements---
1) the purpose of making profit as such is not pursued;
2) the received net income or the property is not distributed among the participants;
2. Providing the requirements under item 1 are met, income of non-commercial organisations in the form of remuneration, grants, signup or membership fees, or as charitable contributions or donated property or allocations and offerings provided free of charge shall not be subject to tax.
3. In case the requirements under item 1 are not met, the income of non-commercial organisations shall be subject to tax under the general procedure.
4. Any income which is not specified in item 2 of this Article, is subject to tax under the generally established procedure.
In this regard, non-commercial organisations are required to maintain separate records for tax-free income under this Article and for income subject to tax under the general procedure.
Article 121. Taxation of Organisations Engaging in Social Sphere Activities
1. Organisations carrying out activity in the social sphere consist of organisations that conduct exclusively the following types of activity---
(…)
2) provision under appropriate licenses services in the area of pre-school upbringing and training; primary, basic, secondary and supplementary general education; primary, secondary, higher and post-graduate vocational education; as well as professional retraining and advance training;
3) scientific research, sport (except for sports shows at a fee), culture (except for show business), services on conservation of items of historical and cultural heritage, historical values, as well as any activities relating to social protection and social security of adolescents, senior citizens and the disabled; (…)
2. Organisations engaging in social sphere activities also consist of organisations that meet the following requirements:
Provisions set in this article are not applied to organisations deriving income from production and sales of excisable goods and excisable types of activity.
3. The income received by the organisations indicated in items 1, 2 of this Article, and also funds received in the form of grants, or as charitable contributions or donated property or allocations and offerings provided free of charge shall not be taxed where they are allocated to performing of specified kinds of activity.
4. In case the requirements under this Article are not met, the income derived shall be subject to tax under the procedure established by the Code.
CHAPTER 17. Adjustment of Taxable Income
Article 122. Adjustment of Taxable Income
1. Deduction in the amount of 2 percent of the taxable income is allowed with respect to:
1) expenses actually borne by the taxpayer for maintaining social sphere objects;
2) property transferred in the form of a gift to non-commercial organisations;
3) targeted social support provided to individuals, in accordance with the legislation of the Republic of Kazakhstan .
2. Taxpayers employing disabled persons are entitled to a deduction in the amount of 2 times the payroll of the disabled plus 50 percent of the social tax liability for the wages and other payments to the disabled. (…)
SECTION 6. PERSONAL INCOME TAX
CHAPTER 23. General Provisions
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Article 144. Income not subject to taxation
1. The following is not recognised as an object of personal income tax:
(1) Targeted social assistance, benefits and compensations except those related to labour remuneration paid from the state budget in amounts set by the legislation of the Republic of Kazakhstan; (…)
(9) Payments from grants (except payments in the form of wages); (…)
(31) Value of the property received as a humanitarian, charitable aid; (…)
SECTION 8. VALUE ADDED TAX
CHAPTER 37. Exempt Turnovers and Imports
Article 225. Turnovers Exempted from VAT
Turnovers VAT-free shall be turnovers on disposal of the following goods (work, services):
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13) any turnovers referred to in Articles 226-233 of the Code.
Article 229. Services of Non-Profit Organisations.
1. A turnover on the services of non-profit organisations which are mentioned in item 1 of Article 120 of the Code shall be the exempt from VAT if it is connected with ---
1) the services in respect of the protection and social security of children, senior citizens, war-and labour veterans and the disabled;
2) the rites and ceremonies of religious organisations or with the sale of articles belonging to the field of faith;
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Article 231. Services, Works Supplied in the Field of Culture, Science and Education
1. Supplies of work and services in the field of culture, science and education are exempt from VAT where belong to one of the following areas ---
1) production of theatrical performances other than light entertainment shows
2) education in the sphere of pre-school upbringing and training; primary, basic, secondary, additional general education; primary, secondary, higher and postgraduate vocational education; as well as professional retraining and advance training by holders of the relevant licenses on the right to carry out such types of activities; (…)
5) preservation of historical and cultural heritage, archive valuables.
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Article 234. Exempt Imports
The import of the following goods shall be exempt from VAT ---
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3) the import of goods with the exception of excisable goods, supplied as humanitarian aid under the procedures established by the Government of the Republic of Kazakhstan;
4) the import of goods with the exception of excisable goods, supplied in the form of charitable contributions, including the technical assistance supplies, that are made at the level of states, governments or international organisations; (…)
CHAPTER 41. Accounting for VAT to Revenue
Article 251. Relation with the Revenue in cases of excess of the tax amount credited over the tax amount assessed for a tax period
6. In addition to the cases mentioned in the paragraphs 2 and 3 of the present article, VAT shall be subject to refund in the following cases:
1) VAT paid to suppliers of goods (works, services) purchased from grant funds under the procedure set in the Article 253 of the Code; (…)
Article 253. Refund of VAT Paid on Goods (Works or Services) Purchased for the Moneys of Grants
1. The refund of VAT paid to supplies of goods, works or services that are purchased for moneys of grants is made within 30 days by tax authorities if ---
1) the grant is provided on the level of states, governments, or international organisations;
2) the goods (works, services) are purchased solely to the purposes for which the grant is provided; and
3) the supply of goods, execution of works or rendering of services is made under an agreement (contract) between the supplier and the beneficiary or his agent that has been appointed by the beneficiary for purposes of carrying out the aims of the grant.
2. The refund of VAT under this Article shall be done by a beneficiary according the procedures under items 2 and 3 of Article 252 of the Code, based on the documents certifying VAT payment from the grant funds.
The list of documents certifying the fact of VAT payment from the grant funds shall be established by the Responsible State Agency.
SECTION 11. SOCIAL TAX
CHAPTER 50. General Provisions
Article 315. Payers
1. Payers of social tax shall be (further referred to as Taxpayers) :
1) resident legal entities of the Republic of Kazakhstan as well as non-residents conducting business in the Republic of Kazakhstan through permanent establishment; (…)
2. By the decision of the legal entity its structural subdivisions may be considered as payers of social tax.
Article 316. Object of taxation
1. Object of taxation for payers indicated in sub-point 1) of point 1 and 2 in Article 315 shall be expenses of employer paid to employees in the form of income, determined in accordance with point 2 of Article 149 of this Code, except for (…):
(1) payments, made from grants provided on the level of states, governments of states and international organisations; (…)
SECTION 12. LAND TAX
CHAPTER 53. General Provisions
Article 324. Payers
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3. The following are exempt from land tax:
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7) religious communities
4. Taxpayers specified in sub-points 2), 4)-7) of point 3 in this Article shall not be exempt from payment of land tax payable on land plots that are transferred for rent or use.
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CHAPTER 54. Tax Rates
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§ 6. Adjustment of Base Tax Rates
Article 338. Amendments to Base Tax Rates
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2. The following payers shall apply coefficient 0.1 to the relevant rates by computation of the tax:
(…)
2) legal entities specified in Article 120 of this Code, except for religious communities;
3) legal entities specified in Article 121 of this Code (…)
3. When land tax payers, listed in point 2 of this Article, transfer a land plot or a part of it (with or without buildings, constructions and structures located on it) to a lease, use on other grounds or for use in business purposes, they shall assess the amount of tax in general order without applying the 0.1 coefficient.
SECTION 14. TAX ON PROPERTY
CHAPTER 61. Property tax for legal entities and individual entrepreneurs
Article 351. Taxpayers
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4. Payers of property tax are not: (…)
6) religious communities
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Article 355. Tax rates
1. Legal entities (except those listed in point 2 of this Article) and individual entrepreneurs compute property tax at the rate of 1% of average annual value of objects of taxation.
2. Legal entities listed below compute property tax at the rate of 0.1% of the average annual value of objects of taxation:
1) legal entities determined in Article 120 of this Code, except religious communities;
2) legal entities determined in Article 121 of this Code; (…)
3. Legal entities listed in point 2 of this Article on taxable objects, transferred for use or lease, compute and pay property tax at the tax rate set in point 1 of this Article.
SECTION 16. OTHER MANDATORY PAYMENTS
CHAPTER 68. Fee For State Registration Of Legal Entities
Article 398. General provisions
1. Fee for state registration of legal entities (further – fee) is collected for state (accounting) registration of establishment, and termination of activity of legal entities, their affiliates and representative offices, their re-registration, and also receipt of a duplicate state registration (accounting) (further – registration) certificate by them.
2. Registration is made by an authorised body (further – registration body) in the order and in cases provided for by the legislative act of the Republic of Kazakhstan.
Article 399. Fee payers
Fee payers are legal entities and also their affiliates and representative bodies subjects to registration on accordance with the legislative act of the Republic of Kazakhstan.
Article 400. Procedure of computation, payment of fee and reimbursement of the amounts paid
1. The fee is calculated at the rates established by the Government of the Republic of Kazakhstan and paid prior to submission of relevant documents to the registration body.
2. The amount of the fee is paid to the budget at the place of state registration of the fee payer as a taxpayer.
3. The amount of the paid fee is not subject to reimbursement except for cases of refusal of persons who paid the fee to perform registration prior to submission of the relevant documents to the registration body.
In this case reimbursement is made after submission by a taxpayer of a document issued by the appropriate registration body, confirming non-submission by the indicated person of documents for fulfilling registration actions.
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CHAPTER 94. Tax Audit
Article 533. Concept and Types of Tax Audit
1. Tax audit is checking exercised by tax service bodies of conforming to tax legislation of the Republic of Kazakhstan. Participants of tax audit are officials of tax service bodies, designated in order, and a taxpayer.
2. Tax audits are carried out exclusively by tax service bodies.
3. Tax audit is subdivided into the following types:
1) document audit;
2) unannounced audit;
3) time-study.
4. Document audits are subdivided into the following types:
1) a complex audit—audit of the fulfilment of tax obligations on all types of taxes and other mandatory payments to the budget;
2) a subject audit— audit of the fulfilment of tax obligations on certain types of taxes and other mandatory payments to the budget;
3) a counter audit—audit carried out in relation of the third parties in case when conducting tax audits a tax body needs additional information about the right way of reflecting in tax accounts of a taxpayer’s operations related the indicated parties.
5. Unannounced audit is conducted by tax bodies in relation to separate taxpayers on issues of their conforming to certain requirements of the legislation of the Republic of Kazakhstan, namely:
1) registration of taxpayers in tax bodies;
2) correct use of cash registers with fiscal memory;
3) presence of and other permissive documents;
4) observing the rules of production, storage and sale of excisable goods.
6. Time-studies are made by tax bodies in order to determine the size of actual income of a taxpayer and actual costs associated with getting income. Time-studies are made according to the order set by an authorized state body.
7. A tax audit must not suspend operations of a taxpayer, except for cases stipulated for by legislative acts of the Republic of Kazakhstan.
8. A tax bodies has the right to audit structural subdivisions of a legal entity irrespective of the fact of auditing the legal entity.
Article 534. Periodicity of Tax Audits
1. Tax audits are conducted with the following periodicity:
1) complex - no more than once a year;
2) subject - no more than once half a year on one and the same type of tax and other mandatory payment to the budget;
2. Restrictions stipulated for in point 1 of this Article are not applicable to the following cases:
1) when carrying out document audits undertaken in relation to reorganization or liquidation of a legal entity and cessation of an activity by an individual entrepreneur and also in case of value added tax de-registration on the basis of a taxpayer’s application. In this respect the audit is to be carried out not later than within 30 calendar days after receiving a taxpayer’s application.
2) when carrying out document audits undertaken in relation to the expiration of a mineral use contract;
3) any of the cross-check audits;
4) any project audit that is undertaken on the basis of a VAT taxable person’s claim for verification of the amount claimed for refund;
5) any audit exercise that is performed by a higher rank tax body in its supervisory capacity to control the quality of prior audits done by line bodies, or any additional audit that is conducted under the decision of the tax appeal body.
6) extraordinary document audits that are carried out under the order of the head of the authorized state body in respect of a specific taxpayer or can otherwise be conducted under the provisions of the criminal procedure law of the Republic of Kazakhstan.
Article 535. Terms of carrying out Tax Audits
1. Term of conducting tax audits indicated in provided orders is not to be more than 30 working days from the moment of order delivery, if otherwise is not provided in this Article;
2. When conducting a tax audit of a legal entity with structural subdivision, the term of conducting a tax audit can be extended by a tax body up to 60 working days.
3. When auditing complicated issues the term of conducting a tax audit can be extended by a higher rank tax service body up to 50 working days for a legal entity without structural subdivision, and up to 80 working days for a legal entity with structural division. Particularly complicated issues are confirmed by a grounded written resolution of a higher rank tax service body issued to a taxpayer.
4. Term of conducting a tax audit is suspended for time periods between moments of giving a taxpayer requirements of a tax body for submitting documents and submission by a taxpayer required documents at conducting a tax audit, and also at the moment of receiving data and documents by a tax body demand.
5. Terms of conducting time-studies are set in accordance with the order of conducting time-studies approved by an authorized state body.
CHAPTER 95. Tax Audit Procedure
Article 536. Grounds for carrying out Tax Audits
1. Grounds for carrying out a tax audit is an order containing the following requisites:
1) date and registration number of the order;
2) name of a tax body that issued the order;
3) full name of a taxpayer;
4) taxpayer’s registration number;
5) type of an audit;
6) positions, surnames, names and patronymic names of auditors;
7) term of carrying out an audit;
8) tax period being audited in case of documentary audits.
2. When assigning unannounced audits the order should contain the area being audited, issues subject to examination in the process of an audit and also data stipulated for in point 1, except sub-points 3), 4) and 7) of this Article.
3. When assigning subject, counter audits the order indicates type of a tax being audited and other mandatory payment to the budget.
4. The order must be signed by the head of a tax service body, its deputy, certified by stamp seal and registered in a special log in accordance with the order set by an authorized state body.
5. In case of extending terms of an audit stipulated for in Article 535 of this Code an additional order is issued where number and date of registration of a subsequent order are indicated.
6. Only one tax audit can be carried out on the basis of one order.
Article 538. Access of officials of a tax service body on the territory or to premises for carrying out a tax audit
1. A taxpayer must provide access to officials of a tax service body conducting a tax audit on the territory or to premises (except premises of residence) used for profit making or to the taxations and objects related to taxation for investigation.
2. In case of denying access to officials of a tax service body conducting a tax audit on the indicated territory or to premises (except premises of residence) a protocol is issued.
3. A protocol is signed by officials of a tax service body conducting a tax audit and a taxpayer (tax agent). In case of refusal to sign the indicated protocol a taxpayer (tax agent) is obliged to submit written grounds of the reason of refusal.
4. Officials of a tax service body must have special permits if they are necessary for access to the territory or to premises of a taxpayer according to the legislative acts of the Republic of Kazakhstan.
5. Taxpayer has the right to deny access of officials of a tax service body on the territory or to premises for conducting a tax audit in cases if:
an order is not given out or issued in the set procedure;
terms of an audit indicated in the order are premature or expired;
data of a person are not indicated in the order;
documents are requested with no relation to the tax period being audited.
Article 539. Withdrawal of Documents
Withdrawal of documents is made in accordance with the legislative acts of the Republic of Kazakhstan.
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Chapter 97. Monitoring
Article 544. Concept of Taxpayer Monitoring
1. Taxpayer monitoring is carried out by applying a system of observations of financial economic activity of taxpayers in order to determine their actual taxable base and conducting the analysis of the soundness of forming cost price of goods (works, services), complying with financial, currency legislation of the republic of Kazakhstan and used market prices.
2. Electronic monitoring is a type of monitoring set in point 1 of this Article with the submission of information in the electronic document form certified by an electronic signature.
3. Monitoring of taxpayers is carried out at the republican and regional levels.
Article 545. Taxpayers Subject to Monitoring
1. The list of taxpayers that are subject to monitoring at the republican level is established by the Government of the Republic of Kazakhstan.
2. The list of taxpayers that are subject to monitoring at the regional level is established by the Responsible State Body.
3. Taxpayers subject to monitoring submit tax accounts in the order set by an authorized state body.