Products

An analysis of the export and import contracts, in order to determine whether there are any risks associated with the transfer price

We offer a preliminary analysis of contracts, i.e. we study and identify possible instances of the use of transfer pricing, provided that prepared with comments and recommendations regarding the use of these contracts, settling with customers, business correspondence, and others.

The conclusion of the agreement made with the Ministry of Finance, in relation to transfer pricing

We can assist in the conclusion of the Agreement with the Tax Committee of the Ministry of Finance of the Republic of Kazakhstan.

This agreement will allow you to operate for 3 years without any checks on transfer pricing, i.e., if you enter initiate an agreement in 2009, the next verification period will be in 2012.

Implementation of this request will consist of the following:

1. The study documents for the preparation of the Agreement;

2. Drafting of the Agreement;

3. Participation in negotiations with the Tax Committee of the Ministry of Finance of the  Republic of Kazakhstan during the consideration of the draft agreement;

4. Providing legal consultation during completion.

Preparation of the monitoring transactions for transfer pricing to submit to the tax authorities

Every taxpayer has entered into the list of transactions to be monitored and consequently, it is necessary to maintain records of all export and import transactions throughout the year.

The monitoring of transactions is carried out by observing the competent authorities of the price applied by the participants of transactions and the collection of taxpayers.
The monitoring of transactions will only apply to those taxpayers who will be determined in accordance with the Code of the Republic of Kazakhstan "On Taxes and Other Obligatory Payments to the Budget" (hereinafter - the Tax Code).

The monitoring of transactions is provided in the Tax Committee the period of 15 April of the year following the reporting period (calendar year) in Excel with a confirmation in writing, i.e., how much dispatched, for example, yesterday, 10 cars, 15 cars today and tomorrow planning 20 and etc.

More importantly, the Tax Committee will also need to provide a complete package of documents on the transactions, whilst in addition, will need to attach documents to introduce the business strategy, outlook pricing strategy of doing business, and reports on international accounting standards ( financial accountability)etc.

Nevertheless, we should not forget that the differential of (discount) is taken into account when determining the market price in the event in due time to provide information for monitoring transactions, i.e., in the case of whether or not to fully document the monitoring of transactions, facts will not be taken into account, even if you provide them during the tax audit.

The previously verified audit

As a result of recent tax audits, thanks to previously prepared documents and arguments, exporters of natural resources can avoid unnecessary taxes, penalties and fines.

Having regard to the remaining urgency of the issue, we propose to take preventive measures before the start of a new tax audit.

Why it is important to assign tax audits on transfer pricing:

1. Since 2004, the have been virtually no conducted tax audits on transfer pricing, that is 4 years, with the statute of limitation being 5 years.

2. There was a strong increase in prices on world markets for all major product lines. For example, in comparison to 2004. Since 2008, the price of oil has increased by 240%, i.e. until mid-2008 oil prices were high.

3. The Novel  "About Transfer Pricing" was introduced with effect from 1 January 2009, i.e. verification under the new law will be appointed since from2010, in this regard, 2009 will be the year of inspections under the old law.

Our activity will consist of several phases:

1. Analysis of documents relating to export transactions. At the present phase, our specialists will be examine and check the documents for compliance with the legislation of the Republic of Kazakhstan. The result of the work will be written comments and recommendations regarding the use of contracts, mutual settlements with customers, business correspondence, and others.
2. Obtaining additional information from official sources. If the information contained in your documents is not sufficient for the calculation, we will obtain it for you from other sources. As you may know, the tax authorities will take into account the official sources of information. GRATA LAW Firm has established a friendly working relationship with companies that provide this information.
3. Preparation of a package of documents for the upcoming tax audit. We will systemize all coherent statements and all documents into one file, so that they can be substantiated. This allows you, during the tax audit, to avoid the inconvenience of finding documents and information,-and will also provide you with a real opportunity to avoid undue additional accruals during the audit.

The specialists at GRATA from the previously verified audit will conduct an audit on the same methodology as that fixed by the Tax Committee of the Ministry of Finance. In addition, we will take into consideration the practice of tax audits, as well as the jurisprudence of the consideration of tax disputes on transfer pricing for the last 3-5 years.

Tax audits on transfers: support and appeals

In general, the results of tax audits on transfer pricing may be appealed to the tax authorities or the courts.

In this regard, GRATA Law Firm can represent your interests in these bodies by skillfully preparing an appeal.

The appeal will be prepared by the statements, which will be supported by reasonable and documented information.

As required, we will also collect any additional documents that are necessary to strengthen your arguments.

GRATA Law Firm has extensive experience in the appealing of audit results on transfer pricing.

All given information is presented in systematized form (calculations and documents) and this would avoid inconveniences in searching for information and documents as well as submitting them to tax bodies.

1) New Legislation on Transfer Pricing. Its Downsides and Advantages in Comparison with the Current Legislation

2) Business Proposal for Transfer Pricing Reporting

3) Comments on the Amendments to the Law of the Republic of Kazakhstan “On Transfer Pricing”