From 1 January 2020, amendments to the Code of the Republic of Kazakhstan #120-VI ZRK dated 25 December 2017 “On Taxes and Other Obligatory Payments to the Budget ”(Tax Code) became effective in respect of an in-house supervision.
As it is known, Article 96 of the Tax Code, which regulates in-house supervision issues, contained a provision giving the state revenue authorities the right, in the event that a notice is recognized as not fulfilled, to make a written decision and send it to a taxpayer.
At the same time, the Tax code did not contain the corresponding norms that would allow the taxpayer to appeal the decision of the state body on recognition of the notice as unfulfilled. In practice, uncertainty of the situation created inconvenience for taxpayers and, consequently, a lot of controversy.
The specified gap in the tax legislation was eliminated by the norms that came into effect on January 1, 2020.
So, according to the Law #241-VІ ZRK dated 2 April 2019 “On Amendments and Additions to Some Legislative Acts of the Republic of Kazakhstan on the Development of Business Environment and Regulation of Trading Activities”, Article 96 of the Tax Code was supplemented by paragraph 4-1, according to which an appeal by a taxpayer (tax agent) against a decision to recognize a notice as unfulfilled shall be filed within five business days from the date of its delivery (receipt) with a higher-level tax authority and (or) an authorized body or court.
In that case a copy appeal must be filed by the taxpayer (tax agent) to the tax service authority that sent the decision.
As evident from the content of the specified norm, the appeal period (five working days) is extremely short, which is largely not typical for the tax legislation.
In order to avoid the risk of violation of taxpayers’ rights, the legislator stipulated that, if the deadline was missed for a good reason, this deadline, by request of the taxpayer (tax agent) filing the appeal, shall be reset by the tax authority and (or) the authorized body that is considering the appeal.
With regard to a petition for resetting the missed deadline, the Tax Code provides for the following procedural features:
- a good reason shall mean a temporary disability of the individual to whom the decision was sent, as well as the director and (or) chief accountant (if any) of the taxpayer (tax agent);
- the petition must be accompanied by documents confirming the period of temporary disability, and a document establishing the organizational structure of such a taxpayer (tax agent);
- the petition shall be satisfied by the tax authority and (or) the authorized body considering the appeal, provided that the taxpayer (tax agent) has filed the appeal and petition no later than ten business days from the day the temporary disability period ends.
Also, there are legal consequences of filing an appeal against the decision to recognize the notice as unfulfilled.
In particular, according to the enacted paragraph 4-3 of Article 96 of the Tax Code, expenditure operations on bank accounts of a taxpayer (tax agent) shall not be suspended when he files an appeal against the decision:
1) from the day the appeal is received by the higher tax authority and (or) the authorized body – until a written decision is made by the higher tax authority and (or) the authorized body;
2) from the day the court accepts the appeal (application) for the proceedings – until the entry into force of the court ruling.