Roman Bykov, Senior Consultant of MinTax LLP, informs about changes in the procedure for issuing consignment notes for goods.

Dear Taxpayers,
On 31 March 2020, SRC MF RoK[1] published a Press-release informing that due to the taxpayers’ requests concerning the need to extend a transition period for introducing CNs[2], and also taking into account the need to have a time reserve for reconfiguring the relationship between taxpayers and their counterparties, carriers, suppliers from the EAEU[3] as well as inside the RoK[4], MF RoK has drafted the Order on introducing changes to the List of goods which are subject to an obligation to issue the CNs.

This draft Order of MF RoK sets the date from which the obligation to issue CNs (except for biological fuel) becomes effective – 1 July 2020.

On the basis of presented approvals, the draft Order of the MF RoK was sent for being reviewed by the RoK Ministry of Justice.

In the meantime, taxpayers need to intensify preparatory measures for the implementation of CNs. The issue of particular importance is the technical adaptation of taxpayers’ accounting systems to issuing CNs.

In order to provide taxpayers with advice and training in respect of business processes related to CNs, SRC MF RoK has prepared a test environment that every taxpayer can use for free by clicking the link indicated on the SRC MF RoK website, “Electronic Invoices” section.

The same section contains a Developer Kit for improving the taxpayers’ accounting systems, a Technical Description of the CN structure, and the E-Invoice IS[5] User Guide which, in turn, contains a step-by-step instruction how to fill in the CN form.

As it is known, from 1 January 2020 Article 176 of the Tax Code[6] came into effect, which regulates control over the procedure for issuing CNs.

According to paragraph 2 of Article 176 of the Tax Code:

An obligation to issue a CN shall arise within the following deadlines:
1) when goods are moved, sold and (or) shipped within the RoK territory – no later than the commencement date of movement, sale and (or) shipment of the goods;
2) when the goods are imported onto the RoK territory:
–  from the territory of non-member states of the EAEU – no later than the day following the day of goods release for free circulation;
– from the territory of member states of the EAEU – no later than the day preceding the day of crossing the State border of the RoK;

3) when goods are exported from RoK territory to the states that are non-members of the EAEU and the member states of the EAEU – no later than the commencement date of the movement, sale and (or) shipment of the goods.

The list of goods which are subject to an obligation to issue CNs, as well as the procedure for their preparation and circulation were approved by Order of the First Deputy Prime Minister of the RoK – Minister of Finance of the RoK No. 1424 dated 26 December 2019 “On approval of the List of goods subject to an obligation to issue a CN, as well as the Rules for their preparation and circulation”.

The goods subject to an obligation to issue CNs are listed below:

No.	Product name	Starting date of CN issuing
1.	Biofuel, the manufacture and turnover of which are regulated by the RoK Law dated 15 November 2010 “On State Regulation of the Manufacture and Turnover of  Biofuels”	1 January 2020
2.	Ethyl alcohol and (or) alcoholic products, the manufacture and turnover of which is regulated by the RoK Law dated 16 July 1999 “On State Regulation of the Manufacture and Turnover of Ethyl Alcohol and Alcoholic Products”	1 July 2020
3.	Certain types of petroleum products, the manufacture and turnover of which are regulated by the RoK Law dated 20 July 2011 “On State Regulation of the Manufacture and Turnover of  Certain Types of Petroleum Products”	1 July 2020
4.	Tobacco items, the manufacture and turnover of which are regulated by the RoK Law dated 12 June 2003 “On State Regulation of the Manufacture and Turnover of  Tobacco Items”	1 July 2020
5.	Goods, the name and EAEU CN FEA[7] code of which are included in the List of Exceptions[8]	1 July 2020
6.	Goods imported onto the RoK territory from the member states of the EAEU	1 July 2020
7.	Goods exported from the RoK territory to the member states of the EAEU	1 July 2020
8.	Goods subject to marking in accordance with international treaties and the RoK legislation	1 July 2020

The issuing of CNs will affect virtually every taxpayer, since the obligation to issue this document arises from any movement (sale, purchase, relocation, etc.) of such widespread categories of goods as items specified in the List of Exceptions and goods imported from the EAEU.

[1] State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan.

[2] Consignment Note.

[3] Eurasian Economic Union.

[4] Republic of Kazakhstan.

[5] “E-Invoice” Information System.

[6] Code of the Republic of Kazakhstan #120-VI dated 25 December 2017 “On Taxes and Other Obligatory Payments to the  Budget”.

[7] Commodity nomenclature of foreign economic activity of the Eurasian Economic Union

[8] The list of goods for which the RoK, according to the obligations assumed as a condition of joining the World Trade Organization, applies the rates of import customs duties lower than the EAEU Unified Customs Tariff rates, approved in accordance with the international treaty to which RoK is a party