Tax and Customs Laws Update
This Client Update covers the key amendments to the tax laws of the Republic of Kazakhstan (RK).
NOVELTIES IN LEGISLATION
The laws covered by the present Client Update are related to both public and private sectors. Some of these may be of interest to you as they may affect your business in Kazakhstan.
We would like to draw your attention to the following legislative acts, which have come into legal force from 1 July 2017.
On 30 November 2016, the President of the RK signed Law No. 26-VI ‘On Amending Certain Legislative Acts of the RK on Taxation and Customs Administration’.
Pursuant to the Law, the Kazakhstan Tax Code was amended as follows:
1) Introduction of the concept of ‘preliminary audit report’.
- Preliminary audit report refers to a document on the preliminary results of a tax audit, executed by the inspector.
- Prior to the tax audit report, the tax official hands to the tax payer a preliminary tax audit report.
- In the case of expiry of the statute of limitations for a tax obligation, and the claim during a tax payer’s (tax agent’s) objection to the preliminary tax audit report, as well as during the tax authority’s consideration thereof, the statute of limitations in part of accrual/review of the accrued taxes and other obligatory payments to the budget is suspended for the period of the tax payer’s (tax agent’s) objection to the preliminary tax audit report, as well as for the period of consideration thereof, pursuant to the Kazakhstan laws (Article 46, paragraph 7-1 of the Kazakhstan Tax Code).
2) Changing the order for appeal of notification of the audit results (Article 667-675 of the Tax Code).
- The tax payer now files the appeal not to the superior body, but to the competent body.
- The appeal must be accompanied by copies of the report and the appealed notification.
- In order to consider the appeal, the competent body creates an Appeal Commission.
- The business processes of the Commission are stipulated by the Regulation on the Appeal Commission for consideration of appeals of notification of the audit results and/or elimination of violations dated 19 May 2017.
- The tax authorities provide the data on the tax payer (tax agent), which are tax secret to the Appeal Commission in consideration of the tax payer’s (tax agent’s) appeal, as stipulated by the competent authority, without the tax payer’s (tax agent’s) written consent (Article 557, paragraph 3, subparagraph 19 of the Tax Code).
3) Amendments to the tax payer’s rights.
- The tax payer now has the right to:
- File a written objection to the preliminary tax audit report, pursuant to the Tax laws;
- Make a statutorily appeal regarding only the notification of the audit results and actions /failure to act of the tax officials, whereas previously the tax payer was also entitled to appeal the decision of the superior tax body, made for the appeal of notification (Article 20, paragraph 1 subparagraph 26, of the Tax Code).
- Tax authorities must consider the tax payer’s (tax agent’s, operator’s) written objection to the preliminary tax audit report (Article 20, paragraph 1, subparagraph 26-2 of the Tax Code).
On 16 November 2016, the President of the RK signed the Law No. 406-V ‘On Amending Certain Legislative Acts of the RK on Compulsory Social Health Insurance’.
Pursuant to the Law, the Kazakhstan Tax Code was amended as follows:
1) Changing the tax payer’s rights due to the introduction of the compulsory social health insurance.
– The tax payer has the right:
- Within two business days from the tax authority’s receipt of tax filing, to obtain an account statement on the settlement of tax obligation with the budget, as well as obligations for the calculation, retention and transfer of obligatory pension contributions, obligatory professional pension contributions, calculation and payment of social contributions, deductions and/or contributions to compulsory social health insurance (Article 13, paragraph 1, subparagraph 7 of the Tax Code).
- Upon request, to obtain information on the absence/presence of tax debts, arrears of compulsory pension contributions, compulsory professional pension contributions and social deductions, and deductions and/or contributions to compulsory social health insurance, as set by this Code.
– The tax authorities have the right to demand from the taxpayer (tax agent, operator) the submission of documents confirming the calculation and the timeliness of payment (withholding and transfer) of taxes and other mandatory payments to the budget, and the completeness and timeliness of the calculation and payment of deductions and/or contributions to compulsory social health insurance (Article 19, paragraph 1, subparagraph 5 of the Tax Code).
2) Contributions to the social insurance fund.
– The taxpayer’s contributions to the social health insurance fund are subject to deduction in accordance with the Kazakhstan laws on compulsory social health insurance (Article 100, paragraph 14-2 of the Tax Code):
- In the reporting tax period – within the limits of contributions, accrued and/or calculated for the reporting tax period and/or preceding tax periods;
- In the tax periods preceding the reporting tax period – within the limits of contributions, accrued and/or calculated for the reporting tax period.
3) Medical assistance in the system of compulsory social health insurance.
– The provision of medical assistance in the system of compulsory social health insurance is not considered as income of a physical person in accordance with the Kazakhstan laws on compulsory social health insurance (Article 155, paragraph 1, subparagraph 31-2 of the Tax Code).
On 21 February 2017, the State Revenue Committee of the RK in letter No. КГД-07-3-ЮЛ-С-394-КГД-4450 conveyed the following:
- The PIT and social tax declaration for citizens has been changed into the declaration on PIT and social tax.
- The declaration was supplemented by an annex reporting the calculation of taxes and other mandatory payments to the budget from the incomes of foreigners and stateless persons.
Hence, the forms 200.00 and 210.00 have merged into a uniform PIT and social tax declaration (TRF 200.00), which comes into force from 1 July 2017 (Order of the Minister of Finance of the RK No. 579 ‘On Amending the Order of the Minister of Finance of the RK No. 587 dated 25 December 2014 ‘On Approval of Tax Reporting Form and Rules for Execution Thereof’ dated 31 October 2016).
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