Planned changes to tax legislation in Kazakhstan - Introduction of a fee for transfers to offshores, disclosure of information related to the «Google tax», desktop audit based on analysis of e-invoices, etc.



Disclosure of information related to the "Google tax"

It is planned that second-tier banks, as well as organizations engaged in certain types of banking operations, will provide information to the authorized body on payments / transfers made by individuals to foreign companies providing e-services (in order to monitor the completeness and timeliness of VAT payments by such companies).

Please note that the "Google tax" will be introduced starting January 1, 2022.

Fee for transfers to offshores

In the framework of implementation of the comprehensive plan on reducing transactions with offshore jurisdictions, it is planned to introduce a fee for transfers made to such jurisdictions. The fee will equal 15% of the amount of payment / transfer.

Exclusion of WHT reporting obligation

In accordance with a large number of questions from taxpayers, it is planned to introduce a clarifying norm in the Tax Code (retrospectively, from January 1, 2018), whereby, in the absence of objects of taxation, tax returns are not submitted for corporate income tax withheld at source from the income of a non-resident entity.

New format of the desktop audit

Amendments to the Tax Code envisage the introduction of a new format of the desktop audit, based on the analysis of electronic tax invoices. Thus, the tax authorities will be able to perform a check even before taxpayers submit tax returns. If discrepancies are found, the taxpayer will be able to correct violations within five working days by withdrawing the e-invoice, introducing amendments and additions to the e-invoice, or by submitting written explanations to the tax authorities attaching applicable supporting documentation.

Limitation on issuance of e-invoices

It is planned to introduce in the legislation a method of ensuring the performance of an obligation not fulfilled on time by restricting the issuance of e-invoices. Currently, this method is applied under a pilot project and is not envisaged in the law.

Exclusion of the list of non-confidential risk criteria

Currently, the Tax Code discloses a number of non-confidential criteria affecting the risk rating of a taxpayer (such as multiple introduction of changes to the tax returns, violations based on the results of the desktop audit, recognition of losses, etc.).

The draft law on amendments to the Tax Code plans to exclude these criteria. Thus, all the criteria affecting the risk rating of the taxpayer will become confidential.

Identification code

Considering the launch of digital marking from October 1, 2020, excise stamps will be replaced by identification codes. Corresponding changes are planned to be introduced to the Tax Code. 

Traceability of goods turnover

It is planned to introduce a new form of tax control: traceability of the turnover of goods, imported to the customs territory of the Eurasian Economic Union. Such a control envisages organization of accounting of goods subject to traceability and operations related to the turnover of such goods using an information system of electronic tax invoices.

Simplified VAT refund procedure in case of converting foreign currency revenue

It is planned to provide the right for a simplified excess VAT refund procedure for large taxpayers that have converted at least 50% of foreign currency earnings received from exports for the tax period.

Disclosure of business income of individuals

It is planned to include in the Tax Code a liability of second-tier banks and organizations engaged in certain types of banking operations to provide information on individuals who are not registered as an individual entrepreneur or a self-employed individual, where transactions have been detected that show signs of income from entrepreneurial activities.

Passport of a taxpayer

According to the draft law, a taxpayer passport will act as an information card for a business entity, which will be contained in a bar code (QR-code) created by the state revenue authority.

The passport of a taxpayer is posted at the location of cash register machines by taxpayers engaged in public catering and trade.

The passport of a taxpayer will contain, inter alia, information on the presence / absence of a license for storage and retail sale of alcoholic beverages.

Taxable capacity and tax gap

In accordance with international practice, it is planned to introduce and apply such indicators as "taxable capacity" and "tax gap" in Kazakhstan.

Taxable capacity is the amount of taxes that taxpayers must pay to the budget, taking into account the current legislation of the Republic of Kazakhstan.

Tax gap is the difference between the taxes paid and the taxable capacity.

The introduction of these indicators will be aimed at more effective organization of the work of the tax authorities in order to reduce the tax gap.

Exclusion of VAT control accounts

According to the results of analytical studies and a pilot application on a voluntary basis of the model of separate payments on the basis of VAT control accounts and the application of blockchain technology, this model has shown itself to be ineffective. Consequently, it is planned to delete Article 433 "Specifics of excess VAT refund for VAT payers applying VAT control accounts".

1. These changes are included in the draft law under consideration by the Interdepartmental Commission of the Ministry of Justice of the Republic of Kazakhstan (Draft Law of the Republic of Kazakhstan "On Amendments and Additions to the Code of the Republic of Kazakhstan "On Taxes and other obligatory payments to the budget" (Tax Code) and the Law of the Republic of Kazakhstan " On the Introduction into force in the Code of the Republic of Kazakhstan" On Taxes and other obligatory payments to the budget "(Tax Code)")

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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