Changes In Tax And Customs Legislation: Novelties In The Appeals Procedure And Certain Administrative Matters

From 1 January 2017 numerous changes to the tax and customs legislation of the Republic of Kazakhstan has become effective. The majority of these changes were introduced by the Law of the Republic of Kazakhstan dated 30 November 2016 No 26-VI "On amendments and additions to some legislative acts of Kazakhstan on tax and customs administration issues" (the 2016 Law on Amendments). At the same time, certain provisions of the earlier laws on amendments became effective, while some provisions of such earlier laws were suspended or changed.

Apart from the Tax Code1, the 2016 Law on Amendments introduced changes into 25 legal acts of the Republic of Kazakhstan, including the Customs Code2, the Code on Administrative Offences3, as well as a number of laws. Changes have been made in about 140 articles of the Tax Code, in the following areas: definitions, administrative and registration issues, procedures for appealing the results of tax audits, taxation of non-residents, subsoil users, financial institutions, large taxpayers subject to monitoring, etc.

Among various changes to the Tax Code and Customs Code, of the greatest interest are the novelties in the field of tax and customs administration and procedures for appealing the results of audits, to which our brief overview below is dedicated.

1. Appealing tax audit results

   1.1. Introduction of a preliminary tax audit report

   Since 1 July 2017 the procedure for appealing tax audit results will be changed. The Tax Code will be supplemented with the term "preliminary tax audit report", which means the document containing the preliminary findings on the results of the tax audit that should be provided to the taxpayer prior to the final tax audit report. In addition the Tax Code will be supplemented with a new Article 636-1 "Preliminary tax audit report".

   Taxpayers will be granted the right to provide written objections to the preliminary tax audit report (Article 13.1(9-1) of the Tax Code), which the tax authority will be obliged to consider (Article 20.1(26-2) of the Tax Code).

   It should be noted that the categories of taxpayers, to which the preliminary tax audit reports will be provided, as well as the relevant procedures, will be determined by the authorized body.

   1.2. Changing the out-of-court appealing procedure in respect of tax audit results

   The description of the procedure for appealing a notification on the tax audit results was clarified. According to the amended Tax Code, an appeal against the results of the tax audit should be filed with the "authorized body" instead of the "higher tax authority". It appears that the wording of the Tax Code was aligned with the existing practice of conducting tax audits by the state revenues departments, in relation to which the higher tax authority is the State Revenue Committee of the RK Ministry of Finance - the authorized body.

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