Dear visitors, you are kindly invited to view comments prepared by MinTax Group Tax Department on certain amendments and additions introduced to the Tax Code by the RoK Laws No 269-V and 271-V dated 29 December 2014.
Article 12. The Fundamental Definitions Used in This Code
To determine the charitable assistance to individuals, the Tax code was amended by adding a concept of “social support of individuals” limited in size (55-times the minimum wage (MW) at the beginning of the year = KZT 1.175.020 in 2015) and the list of individuals who are entitled to the social support (to be determined by the Order of RoK Ministry of Healthcare and Social Protection by agreement with the Committee of State Revenue of RoK Ministry of Finance.
Effective since 1 January 2015.
Article 13. The Rights of the Taxpayer
In connection with the inclusion to the Tax Code of additional procedure for the fulfilment of tax obligations by the taxpayer upon termination of operations (based on the results of the audit report on taxes – Article 37-2 of the Tax Code), some additional rights of the taxpayer were introduced:
– to conclude a contract for the performance of a tax audit according to RoK law on auditing business (sub-paragraph 2-1) of paragraph 1);
– to select one of the procedures for the fulfillment of the tax liability upon termination of operations, as provided for by Articles 37 and 37-2 of the Tax code (sub-paragraph 15) of paragraph 1).
Effective since 1 January 2015. However, this norm is not actually working.
Article 14. Obligations of the Taxpayer
To correspond with the provisions of the new Article 37-2 of the Tax Code and the foregoing amendments to Article 13 of the Tax Code, an obligation was introduced for taxpayers to submit to the tax authorities, at the request of the tax authorities, the contract for the performance of a tax audit and the auditor’s report on taxes, in accordance with the Tax code (Article 37-2), if such contract was concluded. Effective since 1 January 2015.
Article 37-2. Specific issues related to the fulfillment of tax obligations of liquidated resident legal entities and individual entrepreneurs (IE), discontinuing their operations as a result of the auditor’s report on taxes
The new Article sets a special procedure for liquidation of resident legal entities (LE) and IE, discontinuing their operations based on the results of the auditor’s report on taxes. By analogy with the provisions of Article 37-1 of the Tax Code, the specific feature consists in the fact that a documentary tax audit compulsory in case of liquidation is replaced by an in-house control, not later than 10 working days from receiving the tax application and other specified documents. The documentary tax audit is carried out only in case when arrears are discovered as a result of an in-house control, which are challenged by the liquidated taxpayer.
This is applied to resident legal entities and IE whose aggregate annual income (AAI) comprises, subject to adjustment, not more than 60,000 times the minimum reference index (MRI) – KZT 118,920,000 in 2015, having the auditors’ report on taxes.
Effective since 1 January 2015. However, this norm is not actually working.
Chapter 6 “Alteration of Timing for the Fulfillment of Tax Liability on Payment of Taxes, Other Obligatory Payments to the Budget and (or) Fines”. Grounds for Termination of the Tax Liability“
A number of amendments was made in Articles 47, 48, 51-1 of the Tax code. The new Articles 47-1 and 51-3 were added to the Tax code.
The main modification is associated with the introduction of provisions on the conditions and procedure for alteration of deadlines for payment of indirect taxes (IT) for the importation of goods declared to customs authorities – Article 51-3 of the Tax Code. Thus, from 1 January 2015 till 1 January 2017 two Articles are effective that establish the alteration of payment deadlines of VAT on imported goods; after January 1, 2017 only Article 51-3 of the Tax Code will be valid, the effect of which is stipulated in by-laws in respect of 300 major taxpayers.
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Article 51-3 of |
Article 249 of RoK Code on Taxes No 209-II |
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Type of goods |
Goods imported to RoK from the states that are not members of the Customs Union (CU) |
Goods imported to RoK from CU states and non-CU states, intended for industrial processing, as well as imported water, gas, electric power |
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Conditions of application |
IT payment deadlines on imported goods are changed if the following conditions are met: 1) documents provided for by the customs legislation of CU and (or) RoK have been fully submitted to the customs authority, for the customs clearance of such goods; 2) persons who as a result of applying a risk management system set by the authorized body have not been included into a category which has no right to change the IT payment deadline.
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The procedure for referring imported goods to the goods intended for industrial processing is determined according to the customs legislation of CU and (or) RoK. The list of goods imported into the RoK from the member states of the CU intended for industrial processing, the list of finished products obtained from industrial processing, as well as the list of RoK taxpayers importing such goods shall be approved by the Government of the RoK. |
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Assessment of penalties and extension period for IT payment |
Without charging penalty and before the 20-th day of the month, following the month in which the imported goods were released for domestic use |
Without charging penalty and for a period not more than 3 months from the customs authority’s acceptance of the goods customs declaration |
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Grounds for application |
Declaration for goods placed under the customs procedure of release for domestic consumption |
1) Application according to the form established by RoK Government; 2) Copy of the agreement (contract) for supply of the goods; 3) Conclusion of the customs authority certifying that imported goods were classified as goods intended for industrial processing, in accordance with the customs legislation; 4) Conclusion of the tax authority at the location of a VAT payer that he has production facilities and premises. |
Amendments to Article 47 “General Provisions” of the Tax Code limited the previously effective version by listing the methods for changing the timing for the fulfillment of tax liabilities, in particular, in connection with the introduction to the Chapter of Articles 47-1 and 51-3 of the Tax Code.
Article 47-1 of the Tax Code contains provisions of paragraphs 1, 2 and 4 of the old version of Article 47 of Tax Code, with an indication of the maximum period for extension of fulfillment of the tax liability (12 calendar months).
Amendments to Article 48 of the Tax Code, in particular, exclusion of paragraph 3, are associated with the fact that provisions of this paragraph 3 of Article 48 of Tax Code were included to Article 51-1 of the Tax Code
Effective since 1 January 2015.
Article 271. Timing for Payment of VAT
Paragraph 2 of this Article, regarding the timing of payment of VAT on imported goods, was supplemented by a clause which specifies that rescheduling the payment deadline of VAT on imported goods placed under the customs procedure of release for domestic use is made in accordance with Article 51-3 of the Tax Code.
Effective since 1 January 2015.
Article 280. Excise Duty Rates
Excise rates on petrol (except for aviation petrol), diesel fuel are excluded due to the fact that these rates must be approved by the RoK Government.
Effective since 1 January 2015.
Article 457. Exemption from Payment of the Levy
The Article was supplemented by sub-paragraph 1-1) regarding the exemption from payment of registration fees upon the state registration and registration of discontinuing operations of legal entities that are small and medium business entities.
Effective since 1 January 2015.
Article 557. Tax Secrecy
Sub-paragraph 9) containing information concerning the plan of the tax audit was eliminated from paragraph 1 of the Article.
Effective since 1 January 2015.
Article 581. Duties of Banks and Organizations Carrying Out Separate Types of Banking Transactions
Sub-item 12) was supplemented by the seventh paragraph stating that banks and other organizations, within 10 working days from receipt of the request of the tax authority, must submit information on the availability and numbers of bank accounts, balances and cash flows on these accounts of LE, LE structural units, individuals registered as individual entrepreneurs having outstanding tax arrears of more than 10,000-fold MRI as of 1 January of the respective year during 4 months from the date of emergence of those arrears. The form of data submission on such persons does not require an approval of the RoK National Bank.
It is stipulated that information requested by the tax authorities may be submitted via information and communication networks and only when it is not possible due to technical problems – submitted on paper.
Effective since 1 January 2015.
Article 609. The Methods of Securing the Implementation of Tax Obligations That Were Not Implemented in Time
Sub-paragraph 4) of paragraph 1 provides for restricted disposal of imported goods of the taxpayer, in case he fails to fulfill a tax liability to pay indirect taxes on imported goods placed under the customs procedure of release for domestic consumption (when the timing of VAT payment is changed pursuant to Article 51-3 of the Tax Code).
Effective since 1 January 2015.
Article 613. Restraint of Property Disposal of the Taxpayer (Tax Agent)
In connection with Tax code being supplemented by Article 51-3 and amendments made in Article 609 of Tax code, paragraphs 1 – 3, 6 were specified in respect of limiting the property disposal if there is a tax debt on IT on imported goods.
Effective since 1 January 2015.
Article 614. Methods of Enforced Collection of Tax Arrears
Paragraph 3 was supplemented by the clause stating that the methods of enforcement collection at the expense of funds on the taxpayer’s bank accounts, from debtors’ accounts and forced issue of shares shall not apply in respect of the tax debt on indirect taxes (IT) on imported goods placed under the customs procedure of release for domestic use.
Effective since 1 January 2015.
Article 627. Definition, Types and Forms of Tax Audits
The term “selective audits” instead of “scheduled” were added to sub-paragraph 1) of paragraph 9, due to cancelling the publication of a schedule for carrying out tax audits: “1) selective – tax audits scheduled by the tax authorities in respect of a taxpayer (tax agent) on the basis of an analysis of tax reports, information of competent state authorities, and also other documents and information concerning activities of the taxpayer (tax agent);”
Entered into effect from 1 January 2015.
