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Tax and Legal Alert October 2013 Tax and Legal Alert Issue No. 10 • General • International Taxation • Pension Provision • Customs Union • Trends • Excise Goods • Agriculture • Some Letters from the Tax Authorities General the assessed amount of corporate income tax to the budget for the If you would like to receive further information, Statute of limitation 1 please contact PwC consultants working as a part three calendar years.” of the group servicing your company or any of the persons listed below. At the plenary session on 23 The proposed amendment implies October 2013 the Majilis of the that any changes made, for instance, Contacts: Parliament of Republic of in 2014 to the CIT return for 2009 Peter Burnie Kazakhstan (“RK”) approved the with regard to change in losses Partner, Tax and Legal Services second and final reading of the draft extents the statute of limitations for E-mail: [email protected] law “On Amendments and the year 2009 to 2016. Additions to Some Legislative Acts Elena Kaeva Partner, Tax and Legal Services of the Republic of Kazakhstan on Moreover, amendments include a E-mail: [email protected] taxation issues”. higher tax rate on lands which are not cultivated within a certain Timur Zhursunov One of the important amendments Partner, Tax and Legal Services period after they were provided. E-mail: [email protected] of the draft law is to extend the statute of limitations in case of filing The amendments also include Richard Bregonje an additional CIT tax return. Thus, higher tax rates on “luxury” goods: Partner, Tax and Legal Services E-mail: [email protected] p. 5 of the Article 46 of the Tax transport and property as well as Code is complemented by a second excise taxes on tobacco and Walter Daniel paragraph: alcohol.2 Director, Tax and Legal Services E-mail: [email protected] “In case a taxpayer (a tax agent) Primary supporting PricewaterhouseCoopers Kazakhstan submits an additional tax return documents 34 Al-Farabi Ave. with changes and additions related Building A, 4th floor to carry-forward of the losses for the The Order of the Minister of 050059 Almaty, Kazakhstan Finance of RK No. 402 dated 19 period for which the statute of Tel.: +7 (727) 330-3200 limitations, established by p. 1 of August 2013 “On Changes and Fax: +7 (727) 244-6868 this Article shall expire in less than Additions to the Order of the one calendar year, such statute of Minister of Finance of RK No. 562 limitations is extended with regard dated 20 December 2012 “On to assessment and (or) revision of October 2013 Tax and Legal Alert Issue No. 10 (continued) In addition the Head of the Ministry of Finance noted, the draft law introduces some other Establishment of Forms of Primary Supporting provisions which would ensure a competitive Documents” was published on 26 October 2013. environment. 5 The Order approved forms of act of acceptance. SEZ The Order shall become effective after ten days from the day of its official publication. Changes have been introduced to the Decree of (“Kazakhstanskaya Pravda” No. 302 (27576) the Government of RK “On Establishment of a dated 26 October 2013).3 List of Goods (Works, Services) of Own Production According to the Types of Activities Realization of a taxpayer’s property Corresponding with the Purpose of a Set-Up of limited in disposition Special Economic Zones”. The list of goods (works, services) of own production according to According to the Decree of the Government of the types of activities corresponding with the RK, JSC “Company for Rehabilitation and Asset purpose of a set-up of special economic zones Management” is the authorized body “Pavlodar”, “Saryarka” and “Khorhos-Eastern responsible for realization of a taxpayer’s Gates” has been supplemented. property limited in disposition in respect of taxes payable and customs payments and taxes, and The Decree is effective starting from 1 January (or) goods detained by customs authorities. 2013 and is subject to official publication.6 The Decree is effective after ten days from the Amendments to the Criminal and day of its official publication. (“Kazakhstanskaya Criminal Procedural Codes Pravda” No. № 295 (27569) dated 17 October 2013). 4 A new revision of Criminal Code and Criminal Procedural Code has been introduced in Astana. State procurement According to the deputy of the General Prosecutor Johann Merkel, criminal liability for According to Mr. B. Zhamishev, a new law on fake entrepreneurship and tax evasion will state procurement may be adopted next year. diminish. Imprisonment will not be enforced for economic crimes if the guilty person voluntarily According to the Minister, measures will be reimburses the damages. taken to prevent disruption of tenders and purchase from a single source. New revision will be affective from 1 January 2015.7 “A single organizer will conduct tenders, and all documentations will be prepared by the International Taxation administrators of the budget programs,” said Zhamishev. Tenders are often disrupted if a Ratification of Convention between the tender participant did not submit some Government of RK and Government of documents, and such participant is excluded the Grand Duchy of Luxembourg from the tender. To prevent such disruptions, a draft law includes a provision allowing to submit On 10 October 2013 at the plenary session the documents at a later date”. Senate of RK has adopted a law “Concerning the Ratification of Convention between the Moreover, the draft law provides that Government of RK and Government of the administrators of the budget programs will be able to choose the best technical specification, so that all participants with the chosen specification can offer their prices. October 2013 Tax and Legal Alert Issue No. 10 (continued) The purpose of the Standard is to define the characteristics of the accounting and reporting Grand Duchy of Luxembourg for the Avoidance of pension assets to be disclosed in the financial of Double Taxation and Prevention of Fiscal statements of the Fund. Evasion with respect to Income and Capital Taxes and Protocol on introducing amendments Issues not covered by the Standard are governed to Convention”. by the Law of RK “On Accounting and Financial Reporting “ and IFRS. The Protocol provides for wider cooperation between two tax bodies with the help of IFRS should be used for accounting and information exchange on the taxation issues to preparation of financial statements for the prevent tax evasions and avoidance of double Fund’s own assets. taxation of legal entities and individuals, who are residents of Kazakhstan or Luxembourg. 8 The Standard comes into force after ten calendar days from the date of its first official Pension provision publication.10 The Rules for pension payments The Rules for remittance of mandatory pension contributions from income of The rules for making pension payments from a former employees unitary pension fund generated from the mandatory pension contributions, mandatory The regulations was approved for mandatory professional pension contributions as well as pension contribution withheld but not remitted procedure for calculation of amounts of pension by tax agents with respect of income of former payments have been established. 9 employees, whose location is unknown, due to lack of Social Individual Code and (or) The rules are developed in accordance with p. 5 agreement on pensions security with pension of the Article 6 of the Law of RK “On Pension funds as of 1 January 2005. Provision in the Republic of Kazakhstan”. Rules are developed in accordance with p. 9 of The Rules are effective ten calendar days after Article 24 of the Law “On Pension Provision in their first official publication. the Republic of Kazakhstan”. Accounting and disclosure of The taxpayer (the tax agent) having tax liability transactions with pension assets of pension contributions in respect of former employees fills out and submits a form according The Standard of financial reporting “Accounting to Attachment 1 of the Rules to the tax and Disclosure of Transactions with Pension authorities at its location (residence) no later Assets” has been approved. The Standard was than 24 December 2013 indicating total liability developed in accordance with the Law of the RK with a breakdown of principal payments and fine dated 30 March 1995 “On the National Bank of for late transfer of amounts of pension the Republic of Kazakhstan”, the Law of RK contributions accrued before 1 January 2005 , dated 28 February 2007 “On Accounting and and the total amount of liability of the former Financial Reporting”, the Law of RK dated 21 employees. June 2013 “On Pension Provision in the Republic of Kazakhstan”, and is intended for The tax authority, who received information accounting of pension assets and preparation of from the tax agent, within three working days financial statements with respect to pension completes and sends an electronic register of assets of a unitary pension fund and voluntary agents who have a tax liability with respect to pension funds (hereinafter - the Fund). pension contributions of former employees, October 2013 Tax and Legal Alert Issue No. 10 (continued) indicating the name and BIN of agents, as well measure is a necessary condition for the as the name and BIN of tax authority to the Tax development of the economy of the state of the Committee of the Ministry of Finance of RK. Party. A lower rate may be applied in the event of During the same period, the tax authority shall an acute shortage of goods in the domestic make relevant records in the pension market, which is largely dependent on contributions tax account of the agent and open traditional import from third countries and a tax account with the budget classification code cannot be satisfied by the manufacture of this or 206108 “Other non-tax revenue to the state similar good in the Customs Union.
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