Subsoil user taxation is one of the most urgent problems for investors in the territory of Kazakhstan. Having concluded oil contracts when Kazakhstan was just becoming independent and having obtained a guarantee of stability in tax legislation, foreign investors have been actively developing Kazakhstan's largest oil deposits, never suspecting the possibility of problems occurring in the future. One such problem has arisen, however, in the form of calculation and payment of an excess profit tax. What is the reason for this additional assessment made by the Tax Authorities? Is an oversight on the part of oil contract developers or their consultants responsible, or have the Tax Authorities undertaken a major directional revision?

Since the second half of 2005, the Tax Authorities of Kazakhstan (under the supervision of the Tax Committee of the Ministry of Finance) have conducted a number of audits in relation to subsoil users in the Atyrau and Kyzylorda regions. For the first time in the history of independent Kazakhstan the audits were conducted specifically with regard to excess profit tax. Subsoil users have been bewildered by the enormous amounts charged as tax, fines and penalties.