This CLIENT UPDATE includes amendments and additions to the legislation of the Republic of Kazakhstan (”RK”) from 1 October through 31 October 2014.
The legislation outlined in this Client Update concerns both public and private sectors. Some of them may be of interest to you as it may affect your business in Kazakhstan in certain way.
This month we would like to draw your attention to the following legal acts:
EURASIAN ECONOMICAL UNION
1) On 15 October 2014, the President of RK signed the Law “On ratification Agreement on Eurasian Economical Union” (“Agreement”).
The Agreement is the basic document setting forth agreements of Russia, Belarus and Kazakhstan on creation of the Eurasian Economic Union on removal of barriers to the free movement of goods, services, capital and labor, and carry out coordinated and uniform policy in key industries of economy. The Agreement is transition to further integration stage following the Customs Union and the Single Economic Space.
The Agreement will come into force on 1 January 2015.
LAW ON TAXATION
1) On 27 October 2014, the President of RK signed the Law “On changes and amendments into certain legal acts of RK on taxation” (“Law”).
The Law provides tax amnesty for penalty interest and fine by way of writing-off the sums of penalty interest accrued on taxpayers’ accounts as of 1 January 2014 and which have been outstanding as of 1 October 2014.
Pursuant to the Law tax amnesty does not apply to:
i. large tax payers;
ii. subsoil users;
iii. producers of excise products;
iv. gambling industry.
Also the Law introduces changes in relation to the agro-industrial complex, in particular, it provides exemption from individual income tax on the income of personal subsidiary farms and peasant farms enterprises received from product sales to processing companies and procuring centers, and envisages subsidizing a value added tax (“VAT“) for service and procuring centers when purchasing agricultural products from VAT-non-payers, i.e. personal subsidiary and peasant farms.
The Law increases rates of a uniform land tax for peasant farms by 1,5 times and for agricultural producers by 5 times, respectively. At the same time peasant farms will be exempted from payments for environmental emissions.
The Law will come into force on 6 November 2014.
LAW ON INTELLECTUAL PROPERTY MATTERS
1) On 15 October 2014, the Mazhilis of Parliament of RK in the first reading adopted the Draft Law “On changes and amendments into certain legal acts of RK on legal framework of intellectual property” (“Draft Law”).
For the purpose of harmonization of the patent legislation of Kazakhstan and the countries of Organization for Economic Cooperation and Development the Draft Law proposes removing the concept of “innovative patent” from the legislation and retaining the notion of “patent”.
The Draft Law proposes to register a trademark, which is similar to the extent of confusion to the earlier registered trademark subject to the consent of that registered trademark holder.
Also the Draft Law proposes mandatory government registration of the franchise contract that would become effective only from the moment of registration.
The Draft Law further proposes introducing mandatory pre-judicial settlement of disputes in relation to decisions of the authorized body (conclusion of the expert organization) on refusal of registration of the trademark.
In addition, the Draft Law proposes notifying owners of intellectual property on registration of trademark by issuing an extract from the Register, as opposed to a registration certificate.
Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek a lawyer for a specific advice. Please note that Kazakhstan is an emerging economy and its legislation and legal system are in constant development. Should you have any questions or would like to discuss matters addressed in this Client Update, please contact us.