Kazakhstan: Legislation Alert - June 2016

Last Updated: 27 July 2016
Article by Grant Thornton

Main amendments to the legislation

1. Ratification of the Convention for the avoidance of double taxation between the Republic of Kazakhstan (further – the "RoK") and Saudi Arabia

On June 16, 2016 Senate of the Parliament of the RoK at the plenary session approved the Law "On the Ratification of the Convention between the Government of the RoK and the Government of the Kingdom of Saudi Arabia for the Avoidance of Double Taxation and Prevention of Fiscal Evasion and the Protocol to the Convention" (further – the "Convention").

As it was mentioned in previous tax alerts, the Convention and Protocol to Convention was signed in Astana on June 7, 2011.

The Convention provides, among others, the reduced withholding taxes on interest, dividends, royalty.

2. Deduction of export customs duty

On March 28, 2016 the Revenue Committee of the Ministry of Finance published letter № NK-24/2470-I, with an outline of frequent tax violations made by oil and gas companies (further – the "Letter").

In paragraph 4 and 5 of the Letter the Revenue Committee discusses the deduction of export customs duty amount (further – the "ECD") charged during the inspection and export of crude oil when the temporary customs declaring procedure was applied.

In Letter №525-04/16, dated April 29, 2016, the Association of Taxpayers of RoK (further – the "ATK") requested from the Revenue Committee a clarification in respect of paragraph 4 and 5 of the Letter.

The Revenue Committee responded to the above letter as follows:

  • paragraph 4 of the Letter refers to a case where ECD was not paid (for any reasons), and, consequently, was not reflected in the customs declaration, but later was charged as a result of a customs inspection (audit).

    In this case, the ECD is deductible in the period when goods have been transferred rather than in the period when the results of the customs inspection (audit) were approved.
  • paragraph 5 of the Letter refers to the case where the taxpayer paid applicable ECD and reported the ECD amount on the customs declarations.

    In this case, the ECD is deductible in the period when the customs declaration was arranged. Further, the Revenue Committee asserts that the ECD amount does not form part of the cost of sales, so it is deductible as a period expense in accordance with the accruals principle of accounting.

3. Draft rules for an indirect calculation of taxable income of individuals

The Ministry of the Finance of the RoK approved a draft of Rules for an indirect calculation of taxable income of individuals (further – the "Draft Rules").

The Draft Rules were developed in accordance with paragraph 6 of article 643-1 of the Tax Code of the RoK.

The methods described in the Draft Rules are as follows:

  • Capital gain method would be used if the acquisition cost of property is known and transaction with that property is subject to registration.
  • Cost accounting method would be used if an individual has expenses other than those mentioned in the previous method.

    This method is applied by comparing these expenses of an individual (for example, an expensive vacation, repayment of credits) with the individual's income reported on income tax return.
  • Movement of cash on bank accounts would be analyzed if cash is transferred into/from these accounts.

The revenue authorities of the RoK can apply these methods in combination.

The Draft Rules become effective from January 1, 2017 and is subject to official publication.

4. Barrelization ratio to calculate rent tax

In its letter №708-06/16, dated June 19, 2016, ATK asked the Ministry of Finance to clarify which of the quality certificates can be considered as a document confirming the barrelization ratio to calculate the rent tax on exports.

Revenue Committee in its letter № SRC-09-YLE-133 SRC-15481 explains that in accordance with paragraph 2 of Article 302 of the Tax Code, the basis for the calculation of the rent tax on exports is the cost of oil. The cost of oil is calculated on the basis of the actual volume of exported oil and the world price determined in accordance with paragraph 3 of article 334 of the Tax Code.

Further, under paragraph 3 of article 334 of the Tax Code, the conversion from barrels to tones should be made in accordance with the national standard.

Thus, in order to calculate the rent tax on exported oil, taxpayers must refer to oil quality passport used to determine the gross exported volume of oil indicated in line 35 of the customs declaration.

It is worth noting that the Tax Code in the version effective until 2016 does not provide a procedure for the application of the weighted average barrelization ratio.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions