Nowadays, at the time when tax legislation is subject to frequent and continues changes, it is quite hard to attend to all changes of the Kazakhstani tax legislation. Certain wordings of the tax legislation are differently comprehended and interpreted by the tax authorities and taxpayers. This fact is undoubtedly considerable risk for any company doing business in Kazakhstan. Tax consulting – this is a reliable way of secure of your personal rights and business interests.Today GRATA Law Firm has wealth of experience in the area of tax planning of dealings, analysis and minimization of tax risks, as well as participation in and successful solution of tax disputes. However we are untiringly proceeding towards an active mastering of new areas of taxation and tax administration. Our main priority is to be always in training in order to help over existing and obviate potential problems of your company. Seeking legal advice to GRATA Law Firm in the area of taxation you may rest assured that your problem will be correctly sought out and you will bear away from any tax disputes. We are guards of your interests!


Brochure: Tax Law

Tax Litigation and Assistance During Tax Audits:

  • protection of interests of a subsoil user in a tax dispute that resulted in cancellation of additional taxes, penalties and fines amounting to over 100 million USD;

  • participation in a court dispute over accuracy of calculations of excess profit tax;

  • successful cancellation of additionally imposed CIT and withholding tax for a non-resident at the source of payment, VAT, royalties and other taxes;

  • elimination of illegal actions of financial police in their attempt to conduct financial audits of a large international trading company;

  • positive resolution of a dispute with tax authorities regarding a wrongly assessed share in the Production Share Agreement and the attempt to apply enforcement collection of tax owed; 

  • successful representation of a mining company in court contesting results of a tax audit of a commercial discovery bonus;

  • representation of interests of a major telecommunications company in tax authorities in connection with results of a tax audit that assessed additional CIT and VAT in the amount of 80 million Tenge;

  • cancellation of an administrative charge of 40 million Tenge imposed on an oil company in connection with tax discrepancies;

  • successful representation of interests of a subsoil user in courts concerning the appeal of notification of tax authority about an additional charge of a share of the Republic of Kazakhstan to the section of production for about 2 million US Dollars;

  • successful representation of interests of a large brewing company before Tax committee of the Ministry of Finance of the Republic of Kazakhstan concerning the appeal of notification of tax authority by results of tax inspections in the sum of more than 900 million Tenge;

  • representation of interests of subsoil users in courts concerning the appeal of results of tax inspection for the sum more than 27 million Tenge;

  • successful representation of a representative office of Austrian Air Company in the administrative court, which was contesting an imposed administrative charge applied by the tax authority for an additional CIT. 

VAT Refund from the State Budget:

  • successful representation of interests of subsoil users in courts concerning the appeal of a refusal to refund excess VAT amounting to more than 8,8 million US Dollars by tax authorities;

  • representation of interests of subsoil users in courts concerning the appeal of a refusal by tax authorities to refund excess VAT amounting to 3,3 million Tenge;

  • successful representation of interests of a company engaged in uranium extraction. After consideration of results the court confirmed a VAT refund of 300 million Tenge;

  • protecting interests of a subsoil user who was refused VAT refund for more than 100 million Tenge;

  • valuation concerning the validity of refusal to refund excess VAT to an ore mining company after tax inspections.

Taxation of Subsoil Users:

  • consulting an oil company to assess excess profit tax, especially in relation to issues of separating contract and non-contract activity to make changes and additions in a subsoil use contract;

  • development of a calculating excess model for profit with contract’s peculiarities for subsoil use for an oil company;

  • analysis of tax regime under subsoil use contract, providing advice on calculation and payment of taxes and special payments of subsurface users for past tax periods;

  • prepare terms on VAT issues related to exploration operations for a major foreign subsurface users;

  • consulting subsoil users operating under Production Sharing Agreements in relation to revaluation of their fixed assets in accounting and taxation records;

  • consult on optimisation of repayment of loans on the basis of specifics of tax regime;

  • analysis and calculation of excess profit tax, commercial discovery bonus, and subscription bonus, with recommendations for optimization of tax liabilities;

  • consultation of a national subsoil company concerning deduction from total annual income of expenses suffered on payment of the export customs duty;

  • consultation of a large foreign subsoil user company concerning tax and customs obligations, and also assessment of tax risks during transactions with raw materials processing and export of processed products outside of the Customs Union territory;

  • identifying potential risks associated with the use of repealed tax legislation in connection with the current tax practice.

International Taxation:

  • advice on taxation of income earned by non-residents from management, consulting services, services to personnel, and application of conventions on avoidance of double taxation. Analysis of risks linked to creation of a permanent establishment in Kazakhstan and obligations to pay VAT for a non-resident;

  • advising the world's largest food producer on taxation of royalties paid to non-residents;

  • advice to a Kazakh airline company on tax consequences of an aircraft lease agreement;

  • advice to International Financial Corporation on tax aspects of a loan agreement;

  • consultations to a leading European bank on tax issues for Eurobonds, as well as possible tax risks;

  • advice to an uranium company regarding tax treatment of interest and other payments under a loan agreement, potential tax risks associated with ‘gross-up’ clause;

  • advice to the European Bank for Reconstruction and Development on tax treatment of interest and other payments under a loan agreement;

  • advice to International Financial Corporation on tax treatment of remuneration payment under a loan agreement;

  • advice to the leading European aerospace company on tax issues related to services rendered to the Kazakhstan National Company for the design, installation and testing of aerospace equipment;

  • advice to major telecommunications companies on legal consequences of debt restructuring.

Withholding Tax Refund:

  • successful representation before tax authorities of interests of a Russian company working in a services sector of subsoil use regarding return of corporate income tax for the sum about 300 000 US Dollars;

  • successful representation before tax authorities of interests of an American company providing consulting services in subsurface use sphere regarding return of corporate income tax from the budget amounting to about 500 000 US Dollars.

Corporate Taxation:

  • assisting a service company operating in the oil and gas sphere, concerning tax optimization related to equipment supplies to Kazakhstan, equipment rent, and also payment of dividends to a non-resident of Kazakhstan;

  • preparation of a comparative analysis for foreign investors concerning business activities in Kazakhstan: Joint Stock Company, LLP or Branch office, from taxation point of view. Recommendation of the most optimum form of business taking into account kind of activity and jurisdiction of the investor;

  • assisting an international industrial concern on taxation (fiscal loading) on a thermal power plant project and its further activity;

  • assisting a Chinese construction company concerning taxation and implementation of schemes of conveyance of real estate through conclusion of a contract of purchase and sale, by reorganization or as a contribution to authorized capital or compensation;

  • assisting a Kazakhstan branch of an international investment concern regarding obligation on VAT payment within a contract on provision of technical services to a legal entity, non-resident of RK;

  • assisting a Chinese construction company with taxation issues when granting an interest-free loan to a legal entity, resident of RK;

  • assisting the largest mining company in Kazakhstan on legal grounds of correction of sums of offset VAT;

  • assisting a large construction company concerning legitimacy of additional charge taxes according to transactions with false-enterprises, and also possible legal consequences.

Personal Taxation:

  • assisting the largest South Korean holding on taxation of the non-resident physical entities who are carrying out activity in Kazakhstan under employment agreements and civil-law transactions with legal resident persons of Kazakhstan;

  • assisting individuals with taxation of income received in offshore jurisdictions;

  • assisting an international mining company, and also the largest European bank, concerning a program of awarding employees with securities and options;

  • assisting a Belgian IT-company on taxation of employees carrying out activity in Kazakhstan;

  • consulting and representation of interests of employees of an international organization in tax authorities concerning taxation of employment income in Kazakhstan;

  • consultation concerning taxation of income of foreign personnel provided under secondment agreement.

Tax Planning and Optimisation in M&A Transactions:

  • consultation on tax optimization of transaction on disposal of an international oil and gas company;

  • advising ore mining companies on tax aspects of secondary distribution of shares on stock exchange;

  • consultation concerning taxation of physical entity's income received upon transfer of shares in subsoil users. Recommendations for optimization of taxation of the planned transaction;

  • consultation of the largest South Korean holding concerning taxation on purchase of stocks of the Kazakh oil company;

  • consultation concerning taxation on purchase of share in a large Kazakh appliances and electronics company;

  • consultation concerning taxation of a large Kazakh investment holding company while restructuring its assets, including assets of a subsoil user of Kazakhstan;

  • consultation of the largest Kazakh gold mining company concerning taxation of return absorption and tax risks connected with realization of particular transaction.

Tax Due Diligence:

  • executing legal inspection of tax accounting of a company which is involved in out plant construction, about accuracy and relevancy of calculation of taxes and other obligatory payments to the budget for the last tax periods;

  • carrying out legal inspection of tax accounting of two companies working in the sphere of chemical production about rightness of calculation and relevance of payment of taxes and other obligatory payments to the budget for the last tax periods, also on existence of other tax risks and the recommendation about their decrease;

  • legal assessment of the Kazakh branch of the international oil and gas company;

  • review of an oil company about correctness of execution of tax obligations on extracted minerals taxation.

Tax Administration:

  • representation of interests of the large oil company by administrative production in tax authority concerning an incontinence of individual income tax from income payment to individuals for the previous tax periods;

  • representation of interests of an oil and gas company before tax authorities concerning modification of registration data the INIS information system;

  • statement on the account on the VAT, obtaining certificates of the IE;

  • numerous representations of interests of a large telecommunication company in tax authorities in view of arrest of bank accounts and application of different ways of execution of tax obligations.

Tax Accounting Policy and Special Forms of Tax Registers:

  • development of tax accounting policies for the taxpayers working in such branches as production of uranium, production of steel products, implementation of oil operations on investigation and oil and gas production, service and maintenance of sea vessels and ships;

  • development of tax accounting policies for companies who are carrying out oil operations on investigation and oil production on the basis of agreement on the section of production, and also for the companies being the Party in agreements on production section;

  • the analysis of existing tax accounting policies about compliance to the legislation, modification connected with correction of existing tax practice.

Transfer Pricing:

  • drafting amendment agreements to crude oil sale-and-purchase contracts to make them compliant with the new Law of the Republic of Kazakhstan "On Transfer Pricing";

  • drafting oil and gas transport contracts for sellers and buyers;

  • pre-control audit and drafting opinions for Kazakhstani companies performing:

- exportation of oil, oil products and gas condensate, lead, zinc, gold, silver, grain, coal, lead concentrate;

- importation of equipment for oil and gas and metallurgical sectors with regard to compliance of the companies with transfer pricing law. The pre-control audit was performed using the same methods as are used by tax agencies;

  • drafting opinions on effects of transfer pricing:

- for Kazakhstani-Russian gas enterprise engaged in export of dry gas and gas products;
- for Kazakhstani-China, Kazakhstani-Russian enterprises engaged in export of oil and oil products;
- for mining and metallurgical enterprises engaged in export of oil and oil products, lead, zinc, gold, silver, coal, lead concentrate;
- for agricultural enterprises engaged in export of corn, wheat, barley and cotton;

  • risk assessment for an enterprise with regard to operations in a country with preferential taxation (offshore);

  • comparative analysis of prices existing during the period between 2004 and 2009 for main exported goods;

  • representation of interests and protection of rights of foreign oil companies and Kazakhstani oil companies regarding transfer pricing disputes including successful appeal of audit results (penalties of over 5 bln Tenge were cancelled);

  • representation of interests and protection of rights of mining companies in disputes on transfer pricing including successful appeal of audit results (penalties of over 12 mln Tenge were cancelled);

  • monitoring of transfer pricing transactions of companies engaged in export of cooper, steel, lead, zinc, gold, silver, aluminum oxide, chrome ore in order to submit results of such monitoring to the Tax Committee of the Republic of Kazakhstan;

  • drafting of Agreements for Transfer Pricing Application that will be concluded between fiscal agencies and tax payers.

Name Position Contacts
Assel Ilyasova Partner, Head of Tax Law Department Inquire
Eldar Ziatdinov Director of Tax Law Department, GRATA International (Moscow) Inquire
Nurbol Kissembayev Partner, Branch Director Inquire
Nodir Yuldashev Partner, Construction, Telecommunications, Transport, Tax and Litigation Inquire
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08.02.2013

Problems with Obtaining Refunds from the Budget of Excess VAT Accumulated During Mineral Exploration

Lately, obtaining a refund of value added tax (VAT) incurred in connection with the export of goods[1] has been a pressing issue.

08.02.2013

Review of the Amendments made to the Tax Code and Administrative Code in 2013

On 26 December 2012 the President of the Republic of Kazakhstan signed the Law On Amendments to Some Legislative Acts of the Republic of Kazakhstan on Taxation.


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Key contacts

Assel Ilyasova

Partner, Head of Tax Law Department

Almaty

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